Sharif Tells Pakistan's Prime Minister to Rein in Prices Or Face Challenge

Pakistan’s main opposition leader, former prime minister Nawaz Sharif, gave the government three days to accept demands for a crackdown on corruption and steps to lower prices or face a campaign for its removal.

Prime Minister Yousuf Raza Gilani must sack officials accused of graft, withdraw a Jan. 1 increase in gasoline prices and cut government expenditure by 30 percent, Sharif said. He gave Gilani’s administration 72 hours to adopt the opposition program and 45 days to show progress in its implementation.

The prime minister and his Pakistan Peoples Party “has three days to tell us whether he agrees with our agenda, otherwise our first step will be to finish our alliance with them in the Punjab government,” Sharif told reporters at a press conference in Islamabad. If Gilani fails to respond, opposition parties may have to follow a “path that would take us to form a stable, stronger government.”

As Sharif spoke news broke that the governor of Punjab province, Salman Taseer, a member of Gilani’s party, had been killed by his security guard in the capital.

The ruling PPP of Gilani and President Asif Ali Zardari lost its majority Jan. 2 when its largest ally in the National Assembly, the Muttahida Qaumi Movement, quit the government coalition over Gilani’s effort to cut gasoline subsidies by increasing prices.

Opposition Talks

Gilani yesterday met Shahbaz Sharif, the chief minister of Punjab province and president of Sharif’s Pakistan Muslim League (Nawaz), the largest opposition party in the country’s parliament. The prime minister also met Chaudhry Shujaat Hussain, leader of the Pakistan Muslim League (Quaid), the second-largest opposition party.

“Nothing will derail the nation’s democratic process,” Gilani told reporters after meeting Hussain. “I have asked both the parties to support democracy and strengthen institutions by supporting the government.”

While the main opposition parties say they will not try to oust Gilani with a parliamentary no-confidence vote, political science professor Rasul Bakhsh Rais and other analysts said the government’s unpopularity -- amid 15 percent inflation, electricity shortages and insurgencies -- will hamper its efforts to pull new allies into the coalition.

Pakistan’s low tax revenues have left the government to rely on borrowing and foreign aid to finance its war against Taliban insurgents and its effort to recover from monsoon floods in August that submerged nearly a fifth of the country and that helped push annual inflation above 15 percent.

Pakistan gets only about half its government funds from taxes, according to 2009 data published by a Washington think tank, the Heritage Foundation.

The International Monetary Fund last year withheld more than 10 percent of an $11.3 billion loan to pressure Pakistan to broaden its tax base.

U.S. Secretary of State Hillary Clinton told Congress last year that Pakistan’s elite “do not pay their fair share” in taxes.

To contact the reporters on this story: Khurrum Anis in Karachi News at kkhan14@bloomberg.net; James Rupert in New Delhi at jrupert3@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net

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