Historic moment as Pakistan's elected civilian government completes full five year term

There are still challenges to be overcome, but merely surviving is something of an achievement.

 

This weekend saw a historic moment for Pakistan, as a democratically elected civilian government completed its full five year term for the first time ever. In the past, governments have been ousted by the military or by rivals. The moment passed relatively quietly, with a televised farewell address from the prime minister Raja Pervaiz Ashraf on Sunday. In an understated address, he conceded that his government had not done enough during the last five years, but maintained that it had lessened the problems it had inherited. He also said that the historic completion of a full term marked the end of a “sinister chapter” of attacks on democracy. "We have strengthened the foundations of democracy to such an extent that no one will be able to harm it in future," he said.

Many judge the government’s main achievement to be surviving at all. This was no small feat. At the beginning of the five year term, few observers thought that the leading coalition would last more than a year. Asif Ali Zardari was seen as an accidental president, who ended up in this position of power only because of the assassination of his wife, Benazir Bhutto. While Zardari remains unpopular, he has gained a reputation as a canny politician and dealmaker, who kept an unruly coalition together against the odds, despite junior partners frequently breaking away or demanding greater concessions.

There has been a lot of focus on the negative legacy that this government has left behind. Pakistan is in the throes of an energy crisis, with power cuts plaguing large swathes of the country. (As I write this, from the capital city Islamabad, the power has gone off for the fourth time today). Terrorist violence has increased, not reduced, a trend which has not been helped by the lack of a coherent government anti-terrorism strategy. Attacks against religious minorities continue with impunity – from mob attacks against Christian communities to targeted militant violence against Shias. Economic growth is sluggish, while corruption is rife and tax bills low.

Yet on the flipside, the positives should not be overlooked. The level of media freedom enjoyed in the last five years has been unprecedented. Although there were some exceptions, in general, the political opposition and media organisations have been able to say what they want. This has resulted in a lot of mockery and criticism of the present government, to a degree that would have been unthinkable in the past. There have also been significant steps forward in the area of constitutional reform, with greater devolution of power to provincial governments and changes to improve electoral practice.

For months, rumours have circulated that the election will be delayed or cancelled altogether. While I was living in Karachi last year, practically every social gathering featured someone declaring that they knew the election wouldn’t be happening for some reason or another. This demonstrates deep-seated public disbelief that this moment would ever come to pass; a psyche borne of decades of last minute interceptions and power grabs.

The challenge is far from over. Now that the National Assembly has dissolved, the ruling parties are in the process of establishing a caretaker government which will run the country while the Election Commission gets things in order. Shoring up the security situation to reduce bloodshed from terrorist attacks during the polls will be a priority. The election schedule has not yet been announced and rumours still proliferate that the caretaker set up will be extended and elections held off for a year or even two.

The crucial point is that for all the misgivings about the present government, the Pakistani public will, for the first time ever, have the chance to express these feelings through the ballot box. The significance of that cannot be underestimated.

President Asif Ali Zardari. Photograph: Getty Images

Samira Shackle is a freelance journalist, who tweets @samirashackle. She was formerly a staff writer for the New Statesman.

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The Autumn Statement proved it – we need a real alternative to austerity, now

Theresa May’s Tories have missed their chance to rescue the British economy.

After six wasted years of failed Conservative austerity measures, Philip Hammond had the opportunity last month in the Autumn Statement to change course and put in place the economic policies that would deliver greater prosperity, and make sure it was fairly shared.

Instead, he chose to continue with cuts to public services and in-work benefits while failing to deliver the scale of investment needed to secure future prosperity. The sense of betrayal is palpable.

The headline figures are grim. An analysis by the Institute for Fiscal Studies shows that real wages will not recover their 2008 levels even after 2020. The Tories are overseeing a lost decade in earnings that is, in the words Paul Johnson, the director of the IFS, “dreadful” and unprecedented in modern British history.

Meanwhile, the Treasury’s own analysis shows the cuts falling hardest on the poorest 30 per cent of the population. The Office for Budget Responsibility has reported that it expects a £122bn worsening in the public finances over the next five years. Of this, less than half – £59bn – is due to the Tories’ shambolic handling of Brexit. Most of the rest is thanks to their mishandling of the domestic economy.

 

Time to invest

The Tories may think that those people who are “just about managing” are an electoral demographic, but for Labour they are our friends, neighbours and the people we represent. People in all walks of life needed something better from this government, but the Autumn Statement was a betrayal of the hopes that they tried to raise beforehand.

Because the Tories cut when they should have invested, we now have a fundamentally weak economy that is unprepared for the challenges of Brexit. Low investment has meant that instead of installing new machinery, or building the new infrastructure that would support productive high-wage jobs, we have an economy that is more and more dependent on low-productivity, low-paid work. Every hour worked in the US, Germany or France produces on average a third more than an hour of work here.

Labour has different priorities. We will deliver the necessary investment in infrastructure and research funding, and back it up with an industrial strategy that can sustain well-paid, secure jobs in the industries of the future such as renewables. We will fight for Britain’s continued tariff-free access to the single market. We will reverse the tax giveaways to the mega-rich and the giant companies, instead using the money to make sure the NHS and our education system are properly funded. In 2020 we will introduce a real living wage, expected to be £10 an hour, to make sure every job pays a wage you can actually live on. And we will rebuild and transform our economy so no one and no community is left behind.

 

May’s missing alternative

This week, the Bank of England governor, Mark Carney, gave an important speech in which he hit the proverbial nail on the head. He was completely right to point out that societies need to redistribute the gains from trade and technology, and to educate and empower their citizens. We are going through a lost decade of earnings growth, as Carney highlights, and the crisis of productivity will not be solved without major government investment, backed up by an industrial strategy that can deliver growth.

Labour in government is committed to tackling the challenges of rising inequality, low wage growth, and driving up Britain’s productivity growth. But it is becoming clearer each day since Theresa May became Prime Minister that she, like her predecessor, has no credible solutions to the challenges our economy faces.

 

Crisis in Italy

The Italian people have decisively rejected the changes to their constitution proposed by Prime Minister Matteo Renzi, with nearly 60 per cent voting No. The Italian economy has not grown for close to two decades. A succession of governments has attempted to introduce free-market policies, including slashing pensions and undermining rights at work, but these have had little impact.

Renzi wanted extra powers to push through more free-market reforms, but he has now resigned after encountering opposition from across the Italian political spectrum. The absence of growth has left Italian banks with €360bn of loans that are not being repaid. Usually, these debts would be written off, but Italian banks lack the reserves to be able to absorb the losses. They need outside assistance to survive.

 

Bail in or bail out

The oldest bank in the world, Monte dei Paschi di Siena, needs €5bn before the end of the year if it is to avoid collapse. Renzi had arranged a financing deal but this is now under threat. Under new EU rules, governments are not allowed to bail out banks, like in the 2008 crisis. This is intended to protect taxpayers. Instead, bank investors are supposed to take a loss through a “bail-in”.

Unusually, however, Italian bank investors are not only big financial institutions such as insurance companies, but ordinary households. One-third of all Italian bank bonds are held by households, so a bail-in would hit them hard. And should Italy’s banks fail, the danger is that investors will pull money out of banks across Europe, causing further failures. British banks have been reducing their investments in Italy, but concerned UK regulators have asked recently for details of their exposure.

John McDonnell is the shadow chancellor


John McDonnell is Labour MP for Hayes and Harlington and has been shadow chancellor since September 2015. 

This article first appeared in the 08 December 2016 issue of the New Statesman, Brexit to Trump