PM Sharif’s Authority Shrinks to Islamabad After Punjab Snub

The Supreme Court decision and election of Pervez Ellahi as Punjab chief minister will have profound implications for the Sharif government which may be forced to call early elections. Early elections will dampen the hopes of army chief General Qamar Javed Bajwa of getting an extension in service, paving the way for the appointment of a new army chief on merit.

By A Correspondent
(Photo courtesy Bol News)
The Supreme Court of Pakistan which is blamed for playing a central role in setting off Pakistan’s ongoing political and constitutional crisis has changed the country’s political course yet again. A three-member bench of the apex court; headed by Justice Umar Ata Bandial, including Justice Ijazul Ahsan and Justice Munib Akhtar; declared the July 22 controversial election of Mian Hamza Sharif as Punjab Chief Minister null and void.

“The governance of the Province of Punjab in accordance with the Constitution has been subverted whereby the fundamental rights of the people have been seriously infringed. As a result, the Ruling dated 22.07.2022 issued by Respondent No.1, Deputy Speaker, Punjab Assembly is set aside and declared to be void, without lawful authority and of no legal effect,” read the short order issued by the court on July 26.

The court declared the ten votes of PML-Q lawmakers, which were rejected by Deputy Speaker Dost Mohammad Mazari citing party chief Chaudhry Shujaat’s letter in the CM election, as valid.

The apex court in its short verdict ordered the petitioner, Pervaiz Elahi to take oath of the Punjab CM at 11:30 pm tonight and ordered incumbent Punjab CM Hamza Shehbaz to leave the post of the province’s chief to execute immediately.

The apex court also nullified all decisions taken by ‘trustee CM’ Hamza after the controversial chief minister election in which Hamza bagged 179 votes against Pervez Ellahi’s 186 votes and was still declared the winner.

The three-judge bench also held that the deputy speaker misinterpreted the apex court order on Article-63A related to the defection clause and “subverted the Constitution”.

Chaudhary Pervez Ellahi took the oath of office from President Arif Alvi in a late-night special ceremony after Punjab Governor Balighur Rehman, A Sharif ally, refused to administer him the oath of office.

The court’s expected decision flipped the political chessboard in favor of former prime minister Imran Khan who was voted out through a no-confidence motion in the National Assembly earlier in April. The court’s decision is the latest setback to the PML-N-led 13-party coalition government of Mian Shahbaz Sharif. Earlier on July 17, PML-N faced an embarrassing defeat in the by-elections to the 20 seats of the Punjab Assembly. The seats had fallen vacant after a supreme Court decision lead to their de-seating for floor-crossing.

Since his ouster, Khan has led a relentless peaceful protest campaign against the Sharif government which he calls “imported”. Tens of thousands of his supporters have shown up at these protests. Khan has repeatedly accused the United States of plotting his ouster, a charge vehemently rejected by Washington. Contrary to the popular perception in Pakistan, administration officials have repeatedly indicated that they will work with any government that comes into power in Pakistan.

It was the general perception during Khan’s government that the US was following a deliberate policy of ignoring Khan as contrary to the common practice, President Joe Biden never called him. The US President engaged with Indian Prime Minister Narendra Modi several times during this time despite India’s deteriorating human rights record, especially its treatment of its Muslim minority population. The new government of Shahbaz Sharif sounded upbeat about better relations with the US after it came into power. However, like Khan, Sharif has also not received a call from Biden.

The Supreme Court’s July 26th decision has practically restricted the federal government to Islamabad Capital territory as PTI now has governments in Khyber Pakhtoonkhwa, Punjab, Azad Kashmir, and Gilgit-Baltistan. The government in Balochistan has many allies of PTI while the Sindh government is led by the People’s Party of former president Asif Ali Zardari. The court decision may bring some semblance of political stability but it is unlikely to end the country’s political crisis.

The decision has thrown into limbo at least two major decisions that the Sharif government was hoping to take – including the appointment of a new army chief and holding general elections after completing its term, sometime next year. Now it will be difficult because Khan’s PTI can pull the rug by dissolving two of the four provincial assemblies where it has governments. Will Khan dissolve them swiftly? Maybe not because his governments in Punjab and KP can put more pressure o Sharif from within than outside the government. Pakistan’s toxic politics thus has entered a more confrontational mode where the rivalry between provincial governments and the center will intensify. Remember the 1990s tussle between chief minister Nawaz Sharif and then prime minister Benazir Bhutto’s government?

Similarly, it is ulikely that army chief General Qamar Javed Bajwa may get an extension if Sharif’s government is brought down in the near future. If Pakistan goes for general elections in October, his chances of getting an extension in service may decrease significantly. If he is given an extension in service, it may cause more political instability as Bajwa is being accused of influencing Khan’s ouster. Bajwa himself has announced through ISPR that he will not accept an extension in service even if he is offered one.

The country’s struggling economy in the meantime remains in a tailspin. The rupee continues to depreciate. It closed at Rs 238 to a dollar on July 27. The rupee, which is down 23% this year, may drop further to 275 per dollar from about 230, according to IGI Securities Ltd. “The extra yield investors demand to hold Pakistan’s sovereign debt over US Treasuries exceeded 1,700 basis points on Monday, according to JPMorgan Chase & Co. data. That’s well above the 1,000-basis-point level viewed as a threshold for distress,” Bloomberg said in a report.

The country is striving to stave off fears it will follow Sri Lanka into default this year with the government working to secure billions of dollars from the IMF and countries like China and Saudi Arabia. Investors are concerned that calls by ousted Prime Minister Imran Khan for early elections may imperil the IMF bailout.

“Political uncertainty will prove to be a persistent risk in Pakistan and instability will continue to fester,” Bloomberg quoted Sumedha Dasgupta, Asia senior analyst at the Economist Intelligence Unit in Gurgaon, India, as saying. “That’s adding to worries about Pakistan’s funding requirements, a large current-account deficit, and runaway inflation, which will keep the domestic currency under significant pressure.”

Fitch Ratings downgraded the outlook on Pakistan’s credit rating to negative last week, citing deterioration in the nation’s external liquidity position and political risks in the implementation of the IMF program.

The IMF is seeking assurance Saudi Arabia and other nations will follow through with their funding commitments before approving a $1.2 billion loan to Pakistan.

“Political uncertainty was a significant factor in our recent revision of the outlook,” said Krisjanis Krustins, a Hong Kong-based director at Fitch. “Renewed political volatility cannot be excluded in the current environment of slowing growth and high inflation.”

The State Bank of Pakistan has also sought to ease frayed nerves, saying last week that the nation will meet its elevated funding needs comfortably with the IMF bailout remaining on track. The South Asian nation needs $33.5 billion in the fiscal year through June 2023, while available financing stands at $35.9 billion, it said.

The central bank is also stepping up measures to defend the currency. It asked commercial lenders to manage import-payment requests from their own inflows, such as exporter accruals and remittances, according to people with knowledge of the matter.

Pakistan owns just enough foreign-exchange reserves to cover under two months of imports.

“The key here will be that the political events do not impact the ongoing discussions with the IMF,” said Mattias Martinsson, a chief investment officer of Tundra Fonder AB in Stockholm. “Short-term, the picture is very difficult to predict.”

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