Pakistan Reaches Democracy Milestone Amid Economy-Security Woes

Pakistan’s government became the first democratically elected administration in the nation’s 65 years of independence to serve a full five-year term, a landmark marred by a struggling economy and rising sectarian violence.

In a televised speech to the nation late on March 16, Prime Minister Raja Pervez Ashraf said the Pakistan Peoples Party-led government had overcome all threats, drawing a line under a past punctured by military coups. Ashraf remains in office until a caretaker premier is appointed to govern in the runup to a general election scheduled for May.

“It is true that we have not been able to turn Pakistan into a land of all honey and milk in the past five years,” Ashraf said. “But we have lessened the inherited problems and strengthened democracy so much that no one will be able to derail it in future.”

The weekend milestone for Pakistani democracy may not help the Peoples Party, which is headed by President Asif Ali Zardari. The party got less than half the support of its main challenger, the Pakistan Muslim League-Nawaz, in an opinion poll released March 4. Its popularity has shrunk amid the nation’s worst energy crisis, inflation above 7 percent, a Taliban insurgency in the northwest and growing insecurity.

While Zardari and his government worked to entrench democracy and appease opponents with decisions in 2010 to give greater autonomy to the country’s provinces and strip the presidency of the power to dissolve parliament, prices rose and factories were shuttered by rolling electricity cuts.

Afghan Role

“Zardari found the instinct of survival,” said Rashid Ahmed Khan, a professor of politics and international relations at the University of Sargodha in central Pakistan. The ruling party managed its coalition well and improved ties with rival India, “but failed to address the economic challenges faced by the people,” Khan said.

After being carved out of British-run India in 1947, Pakistan has been ruled for half its history by the army, with civilian governments ousted by generals following allegations of corruption and misrule.

Whichever party wins in May will have to boost the $210 billion economy which has grown at an average 3 percent since 2007, less than half the annual pace of the previous five years and too slow to reduce poverty in the world’s sixth-most populous country. The U.S. is seeking help from Pakistan’s civilian and military leaders to stabilize Afghanistan as American combat troops withdraw from an 11-year war with Taliban guerrillas by the end of 2014.

Caretaker Talks

The Peoples Party was preferred by 16 percent of respondents, according to the March analysis by Gallup Pakistan of two national polls carried out in November and February. Former Prime Minister Nawaz Sharif’s PML stood at 37 percent, with ex-cricket star Imran Khan’s Pakistan Tehreek-e-Insaf on 16 percent. The February survey of 9,660 voters had a margin of error of 2 percent to 3 percent.

Talks between the parties of Zardari and Sharif on the make-up of the interim administration are set to continue, and if no agreement is reached by the beginning of next week, a premier may be appointed by the country’s Election Commission.

Former finance minister Abdul Hafeez Shaikh, who resigned last month, and an ex-governor of the central bank, Ishrat Husain, are among the candidates. Zardari’s term expires in September. Pakistan’s president is elected by members of the national and regional assemblies.

Bombing Wave

Pakistan is grappling with a slide in foreign reserves and an almost 8 percent plunge in the value of the rupee against the dollar in the last year, increasing the odds it will need a further bailout by the International Monetary Fund. Foreign investment has slumped 85 percent since 2008. The benchmark Karachi Stock Exchange 100 Index has climbed 33 percent in the period, helped by increases in corporate profits.

Ashraf’s speech, after which parliament was dissolved, marked the end of a tumultuous five years for the government.

The Peoples Party emerged as the largest in the National Assembly following elections in 2008, two months after its leader and former Prime Minister Benazir Bhutto was assassinated at an election rally in Rawalpindi, just outside Islamabad. Zardari, Bhutto’s widower, took over party’s reins, forging a short-lived alliance with Sharif.

The army extended its campaign against Taliban insurgents in the northwest, sending 28,000 troops into South Waziristan in October 2009 and triggering a nationwide wave of retaliatory attacks by militants. A year later, the country’s worst ever floods displaced 20 million people.

Karzai Anger

The American special forces raid that killed al-Qaeda leader Osama bin Laden in a Pakistan army town in 2011 escalated a downturn in ties with the U.S., Pakistan’s largest aid donor. It also led to a prolonged confrontation between Zardari and Pakistani generals, who were subject to rare criticism over the military’s failure to detect the airborne operation.

Even before bin Laden’s killing, Pakistan’s relationship with the U.S. -- and President Hamid Karzai in neighboring Afghanistan -- had been plagued by distrust.

Karzai and officials in Washington had long accused Pakistan of assisting Taliban guerrillas in a bid to derail Kabul’s closer ties with India and retain its traditional influence over Afghanistan’s majority Pashtun community.

In 2012, Pakistan’s Supreme Court ousted prime minister Yousuf Raza Gilani after he cited the president’s immunity as a barrier to seeking the reopening of corruption cases against Zardari in Swiss courts.

Scholar’s Protest

Top judges, who were accused in the media of unfairly targeting Zardari, in January ordered the arrest of the replacement premier Ashraf for alleged graft in rental power projects when he was power minister. The head of the country’s main anti-corruption agency later told judges there wasn’t enough evidence to proceed.

That challenge came as a popular cleric led some of the country’s biggest ever political rallies in central Islamabad demanding the government step aside and, controversially, that the army help run the country ahead of elections.

Ties with neighbor India improved after talks resumed in 2011 following a more than two-year hiatus triggered by the terrorist attack on Mumbai by Pakistani guerrillas. Deadly border clashes in disputed Kashmir in January have since cast a shadow on efforts to repair the relationship.

At home, bomb attacks targeting the Shiite minority have killed 200 hundred people this year forcing the government to announce a belated attempt to curb some Sunni extremists. In Karachi, the country’s financial capital, almost daily gun battles claimed 2,000 lives in 2012.

“Zardari silenced detractors who thought the government was going home in six months,” Khan of the University of Sargodha said. “His government wasn’t good, but it wasn’t the worst” Pakistan has had.

To contact the reporters on this story: Augustine Anthony in Islamabad at aanthony9@bloomberg.net; Khurrum Anis in Karachi at kkhan14@bloomberg.net

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

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