- By Shamila N. ChaudharyShamila N. Chaudhary is Senior Advisor at the Johns Hopkins University School of Advanced International Studies and Senior South Asia Fellow at New America. She served as Director of Afghanistan and Pakistan at the White House National Security Council from 2010 – 2011.
Pakistani Finance Minister Hafeez Shaikh resigned last week – a curious move since the government will soon dissolve in the coming weeks after it announces a date for national elections. It has been speculated that he left because of economic policy disagreements with the government, but Shaikh himself told several sources that he left because he is under consideration for the post of caretaker prime minister. If so, he joins a well-respected group of professionals considered for the post; Supreme Court Bar Association President Asma Jehangir, Pakistan People’s Party (PPP) politician Raza Rabbani and former Supreme Court justice Nasir Aslam Zahid are among the names that have already floated.
The caretaker prime minister will assume charge of an interim government as soon as the PPP coalition announces an election date, at which point the caretakers have up to ninety days to govern before elections.
Much ado has been made about the candidates and the process to set up a caretaker government, perhaps even more than the elections date itself. There are two reasons why such emphasis is warranted: because of its importance to the future of procedural democracy in Pakistan and because of the possible impact on the country’s short-term economic stability.
First, the current procedure to establish a caretaker government requires agreement between the sitting government and the opposition, as mandated by the historic 20th amendment passed in 2012. Given the acrimonious past the PPP and Pakistan Muslim League-Nawaz (PML-N) share, this is no small feat. So far the two sides seem to be committed to cooperation, if not full reconciliation.
In the event the participants cannot reach agreement on a candidate – still a very real possibility – the 20th amendment has delineated specific steps to resolve the gridlock. The process would involve each side forwarding two names to a parliamentary committee that includes equal representation from the government and opposition. The committee can then take up to three days to settle on a name. If the committee is also unable to reach agreement, the Election Commission, as the final arbiter, must decide on a candidate within two days.
Unique to this process is the required engagement and opposition approval throughout, as well as the finite amount of time allotted for decision-making. The 20th amendment is a truly historic piece of electoral reform legislation that, if implemented correctly, can help begin to course-correct a democracy that has been off the rails since the country’s inception.
Second, the caretaker government could be leading the charge to reinvigorate discussions with the International Monetary Fund (IMF) on a new program to help Pakistan manage some of its macroeconomic challenges. Depleting foreign reserves combined with almost $2 billion in loan repayments due to the IMF by May foreshadow tough times ahead. Staying afloat remains too dependent upon uncontrollable factors such as lower oil prices, remittances from overseas Pakistanis staying at record high levels, and external aid like the U.S. Coalition Support Funds program, which periodically helps to offset low revenue generation elsewhere.
The Pakistani government has plenty of credible and internationally recognized economists who foresaw the current situation as unsustainable, and acknowledged the eventual likelihood of a new IMF program. But the political leadership would not commit to anything before elections. It now appears to believe discussion of such a program can begin through the caretaker leadership, which will likely be comprised of technocrats familiar to the IMF. Moeen Qureshi, a former Vice President of the World Bank who also worked at the International Finance Corporation and IMF, led the 1993 caretaker government that assumed charge between the tenures of Nawaz Sharif and Benazir Bhutto. Former Finance Minister Shaikh, if nominated, would fit into the same category given his World Bank credentials.
If, and it is a big "if," the government can get all political parties to agree to the terms of a possible program, the IMF has indicated it would be amendable to some kind of arrangement. This makes the question of who leads the interim setup even more important to Pakistan’s short-term economic stability. It must be someone who has the support and backing of all political actors and, to an extent, institutions with vested interests, such as the military, Supreme Court, and business community. Under these circumstances, a caretaker Prime Minister could potentially be a credible go-between for the IMF and a government in transition.
There is one obvious challenge – the caretaker government will not be in a position to follow up on or enforce any commitments made by political parties once its tenure is over. Beyond this specific obstacle, there is broader political uncertainty surrounding the potential caretakers. For several months now, political analysts in Pakistan have been warning of indirect military support for the extension of the caretaker government beyond the legally mandated 90-day term, postponing elections indefinitely. While such a scenario is unlikely, the persistent rumors swirling around a possible "soft coup" show the pervasiveness of the military’s influence in Pakistani politics. Clearly, no amount of engagement with the opposition, electoral reform or credible technocrats has been able to fully challenge that narrative just yet.
Shamila N. Chaudhary is a South Asia analyst at the Eurasia Group and a senior fellow at the New America Foundation. She served as director for Pakistan and Afghanistan at the White House National Security Council from 2010-2011.