Business | Opinion
Musharraf is caught in a tangle of economy and politics
President Pervez Musharraf's tour of European countries last week was meant to woo prospective foreign investors to seek out opportunities in Pakistan.
- By Farhan Bokhari, Special to Gulf News
- Published: 23:39 January 29, 2008
President Pervez Musharraf's tour of European countries last week was meant to woo prospective foreign investors to seek out opportunities in Pakistan. It was a bold effort but also a half significant one, coming at a time when Pakistan's investment climate has been badly tarnished by political challenges.
The consequence of months of political turmoil in Pakistan are now easily felt all across the country. The Karachi stock exchange (KSE), once the principal barometer of economic success, still appears to be holding its ground but without the fast-paced entry of foreign investors into the fray.
Though domestic investors for now have made up for part of the vacuum caused by the exit of foreign investments in the KSE, it is difficult to imagine if these players will remain in the ring for long. Musharraf's single biggest liability is his own track record since March last year when for the first time he suspended Iftikhar Mohammad Chaudhary, former chief justice of the supreme court. Chaudhary was subsequently forced out of office in November when Musharraf imposed a nationwide state of emergency.
It is not surprising that Musharraf's European trip was surrounded by questions over his relations with the judiciary, as foreign governments and politicians raised questions over the way in which the Pakistani government has treated senior judges.
The net effect of this fairly negative sentiment must be taken in a balanced perspective. There are few around the world today who would seriously contemplate the idea of placing Pakistan under punitive sanctions. For many investors, this is a positive signal at a time when Pakistan is already faced with a number of challenges.
But at the same time, the persistent pointers towards Pakistan's many inadequacies also leave little room for complacency. The negative international sentiment towards Pakistan's internal conditions must only vitiate the atmosphere among investors at a time when the country's economic outlook already appears pressed from the effects of a slowing economy. This is essential just when the opportunities for a robust growth in Pakistan, at least in the short term, are likely to shrink for the time being.
For many investors, the concern surrounding the economy is also paramount owing to worries over the likelihood of a clash between president Musharraf and an opposition led government which comes to power after next month's elections. Given the acrimonious state of Pakistan's internal conditions today, there is no way that a calm will approach the country in the coming months.
Many analysts have concluded that Musharraf's departure from the helm of power in Pakistan will be the only way to stabilise the country through a potentially turbulent period ahead. This is all the more significant at a time when the failure to agree on a variety of national level challenges could hurt Pakistan's future prospects in an equally significant way.
Many investors including those who are averse to issues of democracy and free politics are looking at two fundamentally important variables to assess Pakistan's future outlook.
On the one hand, there is much of an interest in seeking a continuity of politics to the extent that many will want to see more of the same policy trends that have driven Pakistan in recent years. On the other, there will be much anxiety over the possibility of mounting turmoil and political discord in the coming months if not years. For the moment, the outlook emerging under Musharraf does little to assure that neither of these elements will drive Pakistan in the foreseeable future.
The writer is a journalist basedin Pakistan.
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