Inside Financial Markets



ISLAMABAD, Aug 26 (Reuters) – As thousands of protesters blockaded Pakistan’s parliament last week, the spirits of the lawmakers inside were briefly lifted by a rare appearance from Prime Minister Nawaz Sharif.

But Sharif only listened in silence as legislator after legislator denounced the protesters seeking his government’s resignation. He then stood up, and left through a back door.

Toppled in a 1999 coup, jailed and then exiled, Sharif made a triumphant comeback as prime minister for a third time in last year’s general election.

Voters had hoped he would prove better than a long line of feckless prime ministers, shoring up the sagging economy by tackling the chronic power cuts and crumbling infrastructure that bedevil the country of 180 million.

But critics say that his slow pace of reforms, apparent detachment and poor relations with the military emboldened his challengers and encouraged the anti-government protests.

“This is a symptom of arrogance and bad governance,” said independent senator Mohsin Leghari. “When issues are not discussed in parliament they spill out into the streets.”

That is what happened this month when opposition leader Imran Khan and firebrand cleric Tahir ul-Qadri led tens of thousands of supporters to the capital, Islamabad, to demand that he step down.

If the army referees a resolution of the stand-off, as many expect, it will emerge strengthened at the expense of the prime minister. That would deal a blow to civilian rule, a year after an election that marked the first democratic transfer of power in Pakistan’s coup-blighted history.

Many believe that Sharif, a wealthy steel magnate from Pakistan’s wealthiest and most populous province, has only himself to blame for his current crisis.

Ordinary Pakistanis have not seen many improvements since he took office. Apart from the annual budget, not a single law was passed in his first year, a legislative watchdog said. Draft legislation to tackle corruption and electoral reform – central demands of the protesters – has languished.

Fourteen months after Sharif’s election, key posts remain unfilled, and government regulators lack heads. There is still no foreign minister. Defence and the water and power ministries share a single minister, as do the information and law ministries.

A spokesman for Sharif, responding to questions for this report, said these posts were being filled gradually as the government sought capable candidates.



The government can point to some macroeconomic wins: stabilising the currency, rebuilding foreign reserves and cutting inflation by a couple of points to around eight percent.

But these have not won Sharif much applause at a time when populist opponents are promising subsidised food, free housing and a crackdown on corruption.

“The … government’s failure to gauge the growing resentment at the common-man level enabled Imran Khan and Tahir ul-Qadri to mobilise the alienated populace,” national daily the Express Tribune said in a commentary on Monday.

Sharif’s habit of surrounding himself with a small coterie of advisers, many of whom are also relatives, led protest leader Khan to jeer that the prime minister was a “monarch”.

The jibe resonates with protesters like 20-year-old Atique ur-Rehman, a student who says his degree cannot get him a job without family connections.

“It’s only one family holding all the power in Pakistan,” he complained. “They think it is only their country and they want to stop the poor people from standing up.”

Sharif’s brother is chief minister of Punjab. The son of his old friend, the finance minister, is married to Sharif’s daughter. His nephews and wife’s relations are also powerful political figures.

Sharif’s office said that being related did not make his family members unfit for public office.

“The Sharif family is involved in politics since last four decades. It is an extended family,” the spokesman said. “They are talented and qualify for the places that they have occupied.”

Some complain, however, that the family network means Sharif bypasses formal institutions.

He has attended less than a dozen parliamentary sessions since he took office, said Ahmed Bilal Mehboob of PILDAT, a think-tank that tracks legislative issues. That means Sharif was in parliament for about 10 percent of sittings, while his predecessor attended more than 80 percent.

Sharif’s office says he is too busy overseeing security and energy policy to attend parliament all the time, and is represented by his cabinet ministers.



All Sharif’s problems – from accusations of nepotism to grumbling lawmakers and protesters – would go away if he just delivered reforms faster, said Senator Leghari.

“First you have to deliver progress,” he said. “Then, when you are popular, you can even rein in the military.”

But Sharif may now be too weak to fend off the military, which may not rule directly anymore but still consumes nearly half of the government budget and considers foreign and security policy its domain.

Western allies worry that elements of Pakistan’s military are destabilising the region by supporting Islamist militants who are active in Afghanistan and target arch-foe India.

Sharif angered the military after returning to power by attempting to mend fences with India and insisting on months of

  • ultimately fruitless – peace talks before agreeing to launch an offensive against Pakistan’s Taliban.

He also sided with a media house that enraged the army by publicly accusing it of shooting a prominent journalist.

The treason trial of Pervez Musharraf, the army chief who overthrew Sharif in 1999 and later became president, was the final straw. A court granted Musharraf permission to leave the country during the lengthy trial, but the government refused. A political analyst said Sharif wanted to humiliate Musharraf in revenge for Sharif’s own imprisonment.

Now, however, he may depend on the army to fend off the protesters and stay in office.

Sharif’s office said the military, as part of the government, is always consulted in the decision-making process and reports of differences between Sharif and the generals are “more fiction than reality”.

But, recalling that the military played a key role in removing Sharif’s government in 1999, the Express Tribune said history seemed to be repeating itself 15 years later.

“The military can use its political clout to facilitate, if not impose, a solution,” it said.

Indeed, Sharif’s tone has already changed. As protesters marched on Islamabad on Aug. 14, Pakistan’s Independence Day, he gave a speech notable only for its fulsome praise of the army.


Sanie Khan

Sanie Khan holds a deep knowledge of the financial markets in Pakistan. Based in Karachi, he has over 20 years of hands-on management experience in financial technologies and managing operations in the financial sector. He was the General Manager at the Pakistan Stock Exchange (PSX) for 17 years. He along-with senior members of Exchange

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Inside Financial Markets was a joint publication of Pakistan Stock Exchange (PSX)and Society of Technical Analysts Pakistan (STAP)