Pakistan’s two major family-controlled political parties are facing obstacles in their negotiations to form a new government, as they are unable to agree on who should assume the role of prime minister in their coalition aimed at countering imprisoned former leader Imran Khan.
Reports from local media on Monday indicated that the Sharif and Bhutto clans are both vying for their candidates to hold the top position. Sherry Rehman, a senior leader of Bilawal Bhutto Zardari’s Pakistan Peoples Party, stated that committees will be established to “engage in negotiations with other political parties.”
This development suggests that the process of forming a government could be prolonged, possibly taking weeks. The day prior, Pakistan Muslim League-Nawaz President Shehbaz Sharif stated that the clans had “agreed in principle to prevent the country from experiencing political instability.”
Following the election in which Imran Khan’s candidates, running as independents, secured the most seats but fell short of a majority, the Sharifs and Bhuttos have been in talks to establish a government. Bhutto Zardari’s PPP held two meetings with three-time premier Nawaz Sharif’s PML-N over the weekend.
While the details of the discussions were not disclosed, local media reported that PML-N desires either Nawaz or his brother, Shehbaz, to lead the government. PPP, which ranked third in the election, prefers Bhutto Zardari, 35, the son of the late former premier Benazir Bhutto, as prime minister, highlighting him as a new face in a country where over 60% of the population is under 30.
A potential coalition between the parties would block Khan’s candidates, whose strong performance underscored the enduring popularity of the former cricket star and the disillusionment of voters with the existing political establishment in Pakistan, represented by the Sharif and Bhutto parties, as well as the influential military. Khan’s party has alleged electoral fraud, leading to scattered protests nationwide.
For investors, any delay in government formation would exacerbate uncertainty in an economy grappling with multiple challenges. With inflation soaring at 28%, the highest in Asia, many struggle to make ends meet. Furthermore, Pakistan’s nine-month bailout program with the International Monetary Fund, the country’s 23rd since independence in 1947, is set to expire in March, necessitating negotiations for a new agreement.
Pakistan’s benchmark stock index declined by 2.8% on Monday following a 1.8% drop on Friday.