As the tempestuous tenure of the present government ends, the political parties are readying themselves for elections. Yet the morning after the exciting electoral contest the new government will be confronted with a sobering array of challenges in the economic, security and diplomatic spheres. Let us identify the key issues involved in some of the major challenges that the new government will have to address.
On the economic front it is clear that the pressures on Pakistan’s exchange rate will push the country back into the lap of the IMF. This time they will front end load their conditionality clauses, which effectively mean economic contraction. The issue here is negotiating a balance between the imperative of controlling the budget deficit and the need to accelerate the GDP growth. It is not the level of the budget deficit but its composition that matters.  What is required is to drastically reduce the non productive expenditure and substantially increase development expenditure to release the constraints to growth such as electricity generation and transmission, ports and transportation infrastructure and skilling and educating the youth.
Pakistan has shifted from a water surplus to a water deficit country. Yet we are profligate in water use: irrigation efficiency in terms of the percentage of irrigation water reaching the farm gate is down to only 33 percent, water use efficiency in terms of GDP per unit of water used is only one-seventh that of countries such as Brazil and China. Not pricing a crucial scarce resource such as water is a spectacular example of the economic irrationality of public policy. It results in large farmers flooding their farms at cropping time, the urban elite using hosepipes rather than wet rags to wash their cars and city governments decorating roadside spaces with grass which has intensive water requirements.
The withdrawal of ISAF forces from Afghanistan as Taliban seek to establish a Caliphate there will create a grave security threat for Pakistan. With the Taliban on the Pakistan side pursuing the same agenda through tactical alliances on both sides of the Durand line, the Afghan Pakistan border for all practical purposes may cease to exist. This may create a negative “strategic depth”: instead of Pakistan getting strategic depth in Afghanistan, a Taliban infested Afghanistan may get strategic depth in Pakistan. The post election government will need to play this new round of the “Great game” with immaculate skill to prevent a widening of the geographic base of the Taliban eastwards, far beyond FATA.
Then there is the issue of “negotiating” with the “Pakistani Taliban” as most of Pakistan’s main political parties appear to have decided. The question is, negotiate what?  In this case the protagonist seeks to establish its version of the Sharia in disregard of Pakistan’s Constitution as it stands. It would be unrealistic to expect them to give up during negotiations their right to armed struggle in the pursuit of an aim which they believe is sanctioned by religion. Therefore the new government will have to be quite clear about the objective they wish to achieve through negotiations and the concessions they are willing to make. Is the government prepared to cede territory to the Taliban in FATA and beyond?  Will the government and the opposition be willing to amend the Constitution in line with the demands of the Taliban?