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After Reports from Forbes and World Bank, Asia’s top financial paper Nikkei Asian Review shedding light on PML-N Govt Performance and prediction for Elections 2018 …
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Top marks in 1st term see Sharif eyeing 2018 Re-Election
January 13, 2017 8:20 pm JST
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Widespread praise from business and media puts PM in driving seat**
GO YAMADA, Nikkei senior staff writer
Pakistan’s Prime Minister Nawaz Sharif, right, talks with Qamar Javed Bajwa, the newly designated Army Chief in Islamabad, Nov. 26, 2016. © Reuters
**KARACHI **-- Having delivered on governance, economic reform and, crucially, security, Pakistan’s Prime Minister Nawaz Sharif now turns his attention to winning a second term.
Having earned no uncertain praise in business circles and the media, some are already predicting another win for Sharif in the 2018 general election. Pakistan has recently seen significant improvements in its infrastructure and energy sectors, helped in part by the downward trend in oil prices.
In August, the country completed the International Monetary Fund’s Extended Fund Facility program, which provided $6.4 billion in financial aid over three years on condition the country undertakes certain reforms, including fiscal austerity and privatization measures. Macroeconomic indexes are up across the board, and relations with the U.S. and the wider international community have improved.
Public order, which has long plagued the entire country, is normalizing thanks to the military’s anti-terrorism campaign.
Although it can only be described as reaching the halfway point in its efforts to promote exports and manufacturing, reform the tax code and privatize state-run companies, Pakistan’s recovery is undoubtedly gathering pace.
**Gross domestic product growth fell short of the country’s 5% target for fiscal 2016 – which ended in June – due mainly to a poor harvest of the primary agricultural product, cotton. But for fiscal 2017, the country is confidently projecting growth above 5%. The consumer price index, which for a time saw double-digit annual growth, fell to 2.9% on average in fiscal 2016. The government’s annual deficit has fallen from 8.2% in fiscal 2013 to 4.6% of GDP.
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Under Sharif, the ruling Pakistan Muslim League (Nawaz) party, or PML-N has focused on building infrastructure and public transportation systems. It has also made certain progress, mainly in its stronghold of Punjab, developing agricultural areas and addressing unemployment.
The centerpiece of its political campaign is the China Pakistan Economic Corridor project, a comprehensive infrastructure program relying on financial help from China. Investment in CPEC projects totals $51 billion, mainly for the building of power plants, but also encompassing roads, ports, railroads and airports, and offers hope of spurring industry nationwide.
“There’s a significant improvement both on the economic and security sides. Democracy is also taking root,” said Arif Habib, CEO of leading conglomerate Arif Habib group, when asked about the performance of the Sharif administration. “The media is free, and the judiciary system is also improving.”
A large-sized shopping mall in Karachi, commercial capital of Pakistan crowded with families and youngsters (Photo by Go Yamada)
Abdul Aleem, secretary-general of the Overseas Investors Chamber of Commerce and Industry, comprising 195 foreign companies and other organizations, said “The government is very strong,” although “commodity prices, especially oil, are the biggest risk.” As for the sustainability of the anti-terrorism strategy, he said, “I don’t think the Army’s policy will change. And the relationship with the civilian government will be better.”
“The current government is spending a lot of money on infrastructure and energy, which is deeply requisite for business growth and development,” commented Shahrukh Hasan, group managing director of leading media company Jang group, which owns news channel Geo TV and the English-language paper The News.
Foreign policy decisions in Pakistan are often intertwined with the priorities of the military, especially with regard to the U.S. and India. Asked about new Army Chief Gen. Qamar Javed Bajwa, Hasan sees positive signals in his attitude toward relations with India.
Another positive for Hasan is the appointment of a former Karachi Corps Commander, “a good person with an open mind and liberal views,” as director general of the military’s powerful Inter-Services Intelligence agency.
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Strong foundations**
In June 2013, Pakistan underwent its first-ever peaceful regime change from one elected civilian party to another. In the National Assembly the ruling PML-N holds 189 seats, 55% of the total 342, while the opposition Pakistan Peoples Party, co-led by Bilawal Bhutto Zardari, son of former Prime Minister Benazir Bhutto, holds 47 seats. The Pakistan Tehreek-e-Insaf (PTI), or Pakistan Movement for Justice, holds 33 and is led by Imran Khan, the former cricketer who famously captained his country to world cup glory.
The PPP won the 2008 general election after leader Benazir Bhutto was gunned down during the campaign, but lost steam due to political failures. The party is working to regain power under the leadership of Bilawal and Bhutto’s husband Asif Ali Zardari, but that will require increased support in its own stronghold in the southern province of Shindh, as well as making inroads in Punjab, the PML-N heartland that is home to more than half the country’s population.
The PTI made major strides in the last general election, but public opinion is turning. As one Pakistani businessman put it, “They lost people’s support due to the agitation politics, including monthslong sit-in at the parliament.”
Recently, a scandal over real-estate takeovers and offshore transactions involving Sharif’s son and daughter that emerged from the Panama Papers was widely talked about, but has not developed to the point of threatening the administration.
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The Jang group’s Hasan is already predicting a ruling party victory in 2018. “Unless something major happens, [Sharif will get a] bigger majority in next election.”
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There are challenges, of course. Economic interests have been demanding reform of the rigid and burdensome tax system, particularly for manufacturers and large corporations, the backward export-promotion policy and poor communication between federal and state governments. Efforts to privatize Pakistan International Airlines and the essentially bankrupt Pakistan Steel Mills are also deadlocked.
In the second half of 2017, as Pakistan moves into the election campaign season, it will be difficult to cut spending, not only on infrastructure but on development in rural areas, health care and education. The deficit may start expanding again. One senior foreign diplomat in Pakistan said, “It can only keep on running on this force until the 2018 general election.”
For Sharif and the ruling PML-N, 2017 will be a crucial year. Following through on economic reform and delivering tangible results for business and people in general will be essential.