The completion of the full term of an elected government and the prospect of its replacement through an election is a landmark in Pakistan’s struggle to establish democracy on a sustainable basis. The immediate challenge of course is to achieve at least a modicum of public order necessary for conducting credible polls. This will require the interim government to establish a command and control system that integrates security agencies, provincial and metropolitan governments to develop a quick response capability for preventing and combating terrorist attacks in major cities. The danger of extremist groups under the Taliban- Al Qaida umbrella mounting simultaneous attacks in urban centres aimed at political destabilization of the country should not be ignored. Beyond the elections a raft of challenges on the security, economic and diplomatic fronts await the new elected government. Let us briefly outline them.

The most important challenge is to develop and systematically implement a strategy to confront violent extremism. The ongoing widespread violence is being conducted by organized militant groups some of which seek to overthrow the Constitutional order to establish their version of a caliphate. This is a threat not just to democracy in Pakistan but the very existence of the state. Therefore re establishing order and securing the state ought to be the primary goal of the new government. In this regard it is important to understand that in a situation where the enemy has inflexible aims and is apparently gaining ground, appeasement is not an effective approach. It is reminiscent of Neville Chamberlin’s assurance of “peace in our times” after signing the Munich Pact with Hitler in 1938. It only gave time to the Nazi dictator and war not peace followed.

The second important challenge is to revive the economy and undertake the necessary reforms in the institutional structure to place the economy on the path of sustained growth with equity. Reviving the economy cannot be done simply by trying to control the budget deficit through a further cut in development expenditure. This would only deepen the recession and in fact make the budget deficit worse due to the lowering of government revenues associated with slow GDP growth. The task is to drastically reduce unproductive expenditures and increase allocations for and the efficiency of public sector development programs. Development expenditures have historically been a stimulus to the economy as well as an important redistributive mechanism to cushion the poor from the economic inequalities that the market mechanism tends to generate. The public sector development program of the new government ought to focus on releasing the physical constraints to GDP growth: electricity, gas, irrigation water. At the same time a medium term program needs to be undertaken with the support of the people of Baluchistan to convert into income flows the fabulous mineral wealth that lies untapped underground. Utilizing the world’s largest copper deposits and the second largest gold deposits, apart from substantial gas and possibly oil deposits would be a major step to prosperity. Finally perhaps the most important economic initiative would be to shift Pakistan from an extractive institutional structure configured to generate rents for the elite to a competitive open access institutional structure. This would begin to provide opportunities of quality education, health, investment and innovation to all citizens rather than only a few. Such an economy would form the basis of achieving a higher and sustained growth through equity. Growth that is by the people and for the people would not only create broad based economic welfare but also sustain democracy.

The third dimension of the governance challenge is to help build a regional environment that enables Pakistan to achieve economic development, peace and a strengthened democracy. This involves managing in co-operation with Afghanistan the post U.S. withdrawal phase to prevent turmoil and violence that could further fan the flames in Pakistan. At the same time Pakistan will need to manage internal terrorism as well as the emerging water scarcity in a co-operative rather than a conflictual mode. Solving shared problems require collaboration for effective solutions.

The challenges that the next government faces will require innovative policies for saving the state, consolidating democracy and achieving development.