Under pressure from other members of its fragile coalition and the opposition, the government has been forced to back track, at least temporarily, on the recent increase in fuel prices. Following on the heels of this retraction was a reconciliation between Prime Minister Gilani and the MQM. Despite claims that the PPPs position is now more balanced, there is no doubt that the government is in dire straits, even if it has managed to ward off the problem of losing its majority in the parliament for now. The decision the PPP leadership made to appease the MQM will have far reaching repercussions for Pakistani politics, as it will impact every issue the government is faced with today.
When the MQM quit, the only viable option for the PPP in terms of a coalition partner was the PML(Q). However, Mr Shujaat made it clear that the PML(Q) was not going to come to power as second fiddle to any other party. Mr Gilani was a desperate man, well aware of his increasingly weak and isolated position. However, the retraction of the increase in fuel prices and the visit to the MQMs HQ in order to woo a disgruntled coalition partner have not improved his position in the least. Instead, it has revealed how easily the government can be manipulated and maneuvered. The MQMs actions have forced PM Gilani to show his hand. Essentially, the government is now asking to be held at gunpoint over every issue of any importance. And it will not be disappointed.
Aside from the political parties in Pakistan, two related external powers have been watching the petroleum pricing policy with interest – the US government and the IMF. The US has criticised the withdrawal of the price increase, citing the concern that the money used to subsidise petroleum should instead be spent on development and the provision of social services. To state the problem in bald terms, Pakistans subsidies on petroleum products have increases its budget deficit from Rs 812 billion to a projected Rs 1.2 trillion. The US needs an economically stable Pakistan in order to ensure that it continues the fight against terrorism and to secure Afghanistan. At the same time, a greater budget deficit also means that the repayment of loans is adversely affected, despite debt servicing now making up the majority of Pakistans budget.
The IMF is worried as well. Suddenly, the government is no longer listening to its economic advisers. Eventually, the price of petrol will increase, and by an even greater amount. The Pakistani government simply does not have the resources to continue subsidising petroleum.
Yet another issue impacted by PM Gilanis reunion with the MQM is its relationship with the PML(N). The coalition partners in the Punjab are at a crossroad. Much hangs on who the PPP will appoint governor in the province, and whether or not he will be as openly confrontational toward the Sharifs as the late Mr Taseer was.
While the government once again has a majority in the parliament, the PML(N) are continuing to exert pressure in order to have their demands met. Despite the PML(N)s desire to prevent another military intervention and preserve democracy, in whatever shape or form, they can make life very difficult for the PPP in the Punjab by sacking its ministers. Furthermore, with the politically ambivalent and untrustworthy MQM, the PPP can never be sure when, and over what issue, they might lose their majority in the house to the opposition.
Last, but not the least, is the issue of rising extremism in all walks of Pakistani society. Afraid of the backlash from extremist elements present not just in society, but amongst the establishment itself, the government has categorically denied even considering an amendment to the blasphemy law. It is ironic that while there is vociferous condemnation of Mr Taseers murder by the PPP leadership, no one is willing to address the issue that caused him to lose his life. It is a fact that moderates are a minority in this country, even if they are in positions of wealth and power. This is a situation to be feared, especially when the example of Afghanistan under Taliban rule is readily available.
Like an ostrich, the government has stuck its head in the sand on the most important issues – the economy and extremism. Drastic measures are necessary to deal with both problems. However, the government has only managed to set itself up to be held hostage over every significant issue.
