Pakistan’s parliament elected Shehbaz Sharif as the country’s new prime minister just days after his predecessor, Imran Khan, was ousted in a no-confidence vote.
Aamir Qureshi | AFP | Getty Images
Pakistan has a new prime minister – and that could bode well for the South Asian country’s return to a healthier economy and its ties with its traditional supporter, the US, as well as its rival India.
On Monday, Pakistan’s parliament elected Shehbaz Sharif as the country’s new prime minister, just days after his predecessor Imran Khan was ousted in a no-confidence vote.
What one observer called a “confirmation of democracy” was by no means inevitable in a country where no prime minister has served a full term.
Surprising observers, the all-powerful Pakistani army, which has ruled the country through coups for decades, remained in barracks.
A decisive intervention by the judiciary was the next surprise. Pakistan’s Supreme Court ruled that Imran Khan’s government had to face a no-confidence vote it had tried to prevent. Khan eventually lost the newly scheduled vote of confidence in the early hours of Sunday and was impeached.
What will Sharif do?
In his first speech, 70-year-old Sharif said he wants to transform Pakistan into a “paradise” for investment while announcing a minimum wage hike.
Sharif’s path is not easy, Iqbal Singh Sevea, the director of the Institute of South Asian Studies at the National University of Singapore, told CNBC.
“He inherited an economy shaken by a current account deficit and inflation. He must increase the state’s ability to generate revenue through taxation and investment, especially in the export sector,” said the associate professor.
Pakistan dreams of exporting to China. The reality for Pakistan is that they export to the US and Europe.
Jacob Schwemlein
Senior Director, Albright Stonebridge Group
Pakistan is on its 23rd bailout package from the IMF. The country’s economy is under pressure from rising inflation, which has exceeded 10% this year, amid rising prices for crude oil and other commodities following the war in Ukraine.
“Under his supervision, Pakistan will likely need to negotiate another loan with the IMF and commit to structural reforms and generate more tax revenue,” Sevea said. “The task is all the more difficult as he must do so without cutting subsidies and violating social policies.”
According to James Schwemlein, a senior director of the Washington-based Albright Stonebridge Group, Sharif is a well-known figure internationally who has credited his reputation as an able administrator.
“Shehbaz Sharif headed Pakistan’s largest province, Punjab. He has thus largely developed a very positive effect on the business. He was responsible for significant infrastructure investments. He is well known to all international interlocutors – whether American or Chinese,” he said.
India: Improved Relations?
India in particular will pay attention to the new government.
The way events in Pakistan have unfolded is likely to offer New Delhi an opportunity to improve ties with its neighbor, former Indian Foreign Minister Shashank told CNBC.
Pakistan’s “Confirmation of Democracy” would provide an “opening to advance bilateral relations,” he said.
“But the test will be signals from the Sharif government and its almighty army,” Shashank added. “The Pakistani army is desperate to develop relations with the US,” he said.
USA: repairing relations
The main priority for the new administration would be to solidify ties with Washington, analysts said.
Khan had used his oft-repeated allegations of a US conspiracy to oust him from power to block the no-confidence vote against his government. He claimed the US was angered by the perception that Pakistan had drawn closer to Russia and China under his leadership.
Khan has moved away from the traditional position of the pro-US establishment to pursue a markedly different foreign policy and embraced China’s “Belt and Road” projects, Schwemlein told CNBC’s Asia Squawk Box.
Calling his antagonism towards the US “dangerous” for Pakistan, he told CNBC on Monday: “The dream for Pakistan is that they can export to China. The reality for Pakistan is that they export to the US and Europe.”
Pakistan’s economic prosperity has been largely tied to maintaining positive relations with the West, but Khan “acted against“ said Schwemmlein.
It is likely that the new Sharif government will be more US-oriented
China: Strategic Relations
According to Shibani Mehta, a research analyst at Carnegie India, Pakistan had nurtured ties with both the US and China to overcome its security dilemma and maintain its balance of power with India.
“Because of its history with the US and China, Pakistan needs them more than they need themselves,” Mehta said. “The United States showed little appetite to engage in regional disputes. China’s motivations are primarily rooted in a shared skepticism and history of war with India and commercial interests in Pakistan,” she said.
A change in Pakistan’s relationship with either or both will depend on Washington’s and Beijing’s strategic goals
Shibani Mehta
Research Analyst, Carnegie India
“A change in Pakistan’s relationship with either or both will depend on Washington’s and Beijing’s strategic goals,” she added.
But Sevea pointed out that no matter who comes to power, it is the army that will continue to have an important say in Pakistan’s foreign policy.
“Given the concern within the army over Imran Khan’s criticism of Pakistan’s relations with the US and the army chief’s claim that the relationship with the US is important, it is likely that Sharif will seek to return to a balance between the two.” said he called.