Pakistan Under Shehbaz Sharif: The State of the Nation

The expression “plus ça change, plus c’est la même chose” – the more things change, the more they stay the same – has become a common description of Pakistan’s repeated cycles of crises and its abiding struggle to ensure political stability, internal security, and economic growth.

The performance of the current coalition government, which took office in February 2024 under Prime Minister Shehbaz Sharif, offers few grounds for optimism. With domestic politics gravely polarized, security increasingly fragile, and the economy barely stable, there is little sign yet of an end to the chronic dysfunction that has thwarted the welfare of Pakistan’s 250 million people.

A Political Divide

The greatest challenge facing Sharif’s government is the crisis arising from the incarceration of former Prime Minister Imran Khan and the disputed results of general elections, held in February 2024. Khan, who leads the Pakistan Tehreek-e-Insaf (PTI or Pakistan Justice Movement), has been in prison since May 2023 and currently faces more than 100 charges ranging from corruption to the instigation of violence. Although acquitted in the most serious cases relating to breaches of national security and incitement to violence, Khan is unlikely to be offered any immediate relief. In January he received a 14-year jail sentence for illegally receiving land from a property tycoon to establish a charitable trust.

Notwithstanding these setbacks, Khan can fairly claim to be the country’s most popular politician. He has also consistently maintained his innocence and insisted that he is the victim of a political witch-hunt led by a military establishment he believes is determined to deny him his mandate by endorsing fraudulent election results.

According to those results, the PTI emerged as the second largest party in the National Assembly with 92 seats, behind Sharif’s Pakistan Muslim League-Nawaz (PML-N), which gained 98 seats. However, the PTI believes that it won double its official tally and has called for the restoration of its “stolen mandate.”

Its claims received a boost in July last year after the Supreme Court recognized the party’s right to its share, 22 seats, of the 70 seats reserved for women and minorities in the National Assembly, paving the way for PTI-backed candidates to emerge as the largest bloc in parliament. The government, which maintains that the elections were free and fair, has refused to accept the court’s verdict, saying it was inconsistent with existing election rules.

But those rules have been mired in controversy. In January 2024 the Supreme Court, citing irregularities in the conduct of the PTI’s internal elections, denied the party’s candidates the use of the PTI’s iconic cricket bat symbol to contest the general elections. Forced to field its candidates as independents, the PTI instructed its winning candidates to join and take their seats as members of a little-known Islamic party, the Sunni Ittihad Council (SIC), in order to qualify for a share of reserved seats allocated to parties in parliament. Current election rules, however, require political parties to submit their list of reserved candidates before the elections. As the SIC fielded no candidates of its own, it had no list to offer and was seen, therefore, to fall foul of these rules.

Khan’s indignation, however, predates these events and reaches back to April 2022, when he was removed from office through a parliamentary vote of no-confidence. He claims the ouster was orchestrated by the military high command – aided and abetted by the United States. The crisis escalated in May 2023 after Khan was arrested on charges of corruption, sparking countrywide demonstrations and the detention of hundreds of his supporters, who were accused of vandalizing military property. Last December, more than 60 civilians were controversially sentenced by military courts for their part in those demonstrations.

Undeterred, the PTI has continued its campaign against the government and those it alleges are its military backers, headed by the current army chief, General Asim Munir. The party has also intensified its use of social media to extend its campaign and sought to mobilize sections of the Pakistani diaspora abroad, especially in the United States, to lobby members of the new Trump administration and secure Khan’s release.

At home, the PTI’s public protests have shown no signs of abating. In November 2024 thousands of its supporters responded to Khan’s “final call” to the government by laying siege to the capital, Islamabad, and attempting to break through security cordons. It led to violent clashes with security forces and, reportedly, multiple deaths and the detention of hundreds of PTI workers.

The PTI has now called for a judicial commission to investigate these events. Together with demands for Khan’s release and a judicial inquiry into the earlier events of May 2023, they form the centerpiece of the PTI’s “Charter of Demands.”

In late December the party agreed to talks with the government, but weeks later was ordered by Khan to withdraw from further negotiations. At issue was the government’s reluctance to expedite the formation of two judicial commissions as demanded by the PTI. While there were some indications that Khan might relent – fueled by his apparent willingness to drop his stubborn insistence on negotiating solely with the military – they proved to be unfounded.

The ensuing uncertainty has further intensified fears of a profound political crisis that is far from resolved.

Governing “Unilaterally”

The Sharif government itself has done little to ease these apprehensions, fueling speculation that its close ties to the military – earning it the moniker of a “hybrid regime” – may have deluded it into thinking it can ride out the political storm. There is also concern that lessons drawn from the experience of previous governments – most recently, the government led by Imran Khan, who was unceremoniously dropped as the military’s favorite politician – are being recklessly ignored.

Controversial measures pushed through by Sharif’s government in recent months are widely seen as intended to target the PTI by restricting its access to the justice system, neutralizing its campaign against the army (especially its current chief), and limiting its use of social media.

The 26th amendment to Pakistan’s Constitution, passed by parliament last October without proper debate and in questionable circumstances, effectively clipped the powers of the Supreme Court. Long seen as partial to the PTI, it now co-exists with a Constitutional Bench, which many fear will tailor its rulings to suit the government and divide the superior judiciary. In a further blow to judicial independence, judges hitherto appointed according to rules of seniority are now to be selected by a commission subject to parliamentary oversight.

In November, parliament also approved contentious changes to the Army Act (1952), which extended the tenure of a serving army chief from three to five years with provision for an extension of five years. Munir, who currently holds the post and is said to harbor deep differences with Khan, was due to retire in 2025. The latest changes ensure that he will continue in office until 2027 and could exercise his right thereafter to an extension until 2032.

In a further move in January, the government pushed through amendments to the Prevention of Electronic Crimes Act (2016). Passed with little warning or debate, the changes have been strongly condemned by opposition parties and journalists as an attack on the freedom of expression. Of particular concern is the creation of a new government-controlled agency with powers to impose draconian punishment on those found guilty of disseminating “fake news” and content on social and digital media deemed “unlawful and offensive” to judges, the armed forces, and parliament.

The Sharif government’s efforts to use its legislative prerogatives and see off challenges to its legitimacy have prompted its coalition allies to accuse it of acting “unilaterally.” Chief among them is the Pakistan People’s Party (PPP), which represents the third largest party in parliament with 68 seats. Although it offers conditional support to the government, it has refused to formally join the ruling coalition. However, this arrangement came in exchange for the government’s backing to help the PPP secure two key constitutional posts – a second five-year term as president for the party’s senior leader, Asif Ali Zardari, and the position of Senate chair for former PPP Prime Minister Yusuf Raza Gilani (who is constitutionally empowered to act as president in the absence of the office holder).

The PPP’s success in sealing the terms of this bargain has enabled it not only to shield itself from popular anger against the government’s austerity measures, but to join in the chorus against the government’s efforts to control freedom of information by restricting access to the internet. The PPP clearly believes that, should the tenure of Sharif’s fragile coalition be abruptly terminated, it can still count on residual public support and a permanent presence in the corridors of constitutional power.

These barbs from allies pale in comparison, however, to threats faced by the government from newly emboldened militant groups, whose activities have led to a sharp deterioration in Pakistan’s internal security.

Security Woes Deepen

According to the Islamabad-based Center for Research and Security Studies (CRSS), 2024 marked the deadliest year in a decade for civil and security forces fighting militant groups in Pakistan. The Pakistan Institute for Peace Studies (PIPS) meanwhile reported a 70 percent increase in terrorist attacks and a 24 percent rise in related fatalities, mainly among civilians, in 2024, compared to the previous year.

Although none of Pakistan’s four provinces have escaped militant attacks, the worst affected are Khyber Pakhtunkhwa, bordering Afghanistan, and Balochistan in the southwest. Both serve as hubs for the Pakistani Taliban, the Tehreek-e-Taliban Pakistan (TTP) – officially redesignated by Pakistani authorities last August as Fitna al Khwarij (“deviators from Islam”) – and the separatist Baloch Liberation Army (BLA), respectively. These groups have significantly expanded their attacks against security forces over the last 12 months, with at least 60 security personnel killed in Khyber Pakhtunkhwa and Balochistan in January 2025 alone. But the TTP and BLA have also targeted infrastructure, including key projects tied to the vital China-Pakistan Economic Corridor (CPEC), which is concentrated in Balochistan.

In 2024, militants from the BLA and the TTP killed nine Chinese nationals working on CPEC projects at different locations in the country – the highest such tally involving Chinese workers in a single year since 2021. It is feared that the latest attacks could damage Pakistan’s all-important relationship with China.

The surge in militant attacks reflects the government’s failure to address the fall-out from Pakistan’s misguided policy on Afghanistan (resting on notions of “bad” Pakistani Taliban and “good” Afghan Taliban), and to initiate a meaningful political dialogue with civil and political rights activists in Balochistan. Both point to the government’s deference to the military establishment and its priorities, despite compelling evidence that kinetic operations and counterterrorism strategies alone are unlikely to contain these well-established and rapidly evolving insurgencies.

Talks with Afghan Taliban officials in January, aimed at de-escalating tension fueled by Pakistani allegations of TTP sanctuaries on Afghan territory, produced few results. Meanwhile, calls for “governance-driven” institutional reform, an empowered police force, and public ownership of governance mechanisms to address Taliban militancy in Khyber Pakhtunkhwa have received scant attention.

That said, these steps would require the cooperation of the PTI, which currently controls the provincial government in Khyber Pakhtunkhwa and which is said tacitly to support the Taliban’s anti-government campaign. What is not in doubt is that so long as political differences between the government and the PTI at the national level are unresolved, the prospects of peace in Khyber Pakhtunkhwa are slim.

These constraints are relatively less onerous in Balochistan, where Sharif's PML-N shares power with the PPP in a coalition government. Yet here too it appears powerless to respond to the challenges of near-daily and ever more lethal attacks by BLA militants. More importantly, the government has shown no inclination to rethink the merits of continuing with the military’s heavy-handed approach to tackle an insurgency that is driven by political alienation and the legitimate grievances of ethnic Baloch angered by the unequal distribution of resources and the erosion of their constitutional rights.

Economic Stagnation

Political uncertainty and a steadily deteriorating security landscape have exacted a heavy toll on Pakistan’s fragile economy. While GDP growth recovered slightly in 2024 to around 2.5 percent, and inflation dropped from a peak of 38 percent in 2023 to 2.4 percent in January this year – its lowest level in a decade – fundamental problems that brought the country to the brink of default in 2023 still plague the economy.

Revenue collection remains a key concern. Pakistan’s tax-to-GDP-ratio, which has stubbornly held below 10 percent for almost two decades, fell again under Sharif’s government. That prompted an unscheduled visit by an International Monetary Fund (IMF) team in November amid reports that the government had missed critical revenue collection targets agreed with the IMF under a $7 billion loan program signed in September.

At the moment, foreign exchange reserves, which had fallen to critically low levels in 2023, have improved owing largely to support from the United Arab Emirates and Saudi Arabia, and external debt (estimated in 2024 at some $133 billion) is being held in check by roll-over agreements with China. Even so, it is far from clear how the government intends to steer the economy from stability to growth.

In January 2025, the Sharif government unveiled its five-year economic transformation program, Uraan (meaning “take-off”), by targeting what it called the “5 Es” – exports, e-Pakistan, equity, environment and energy. While any assessment of its success must await implementation, the plan’s ambitious goals to harness digital transactions and make way for a “cashless society” have already been called into question against a recent report by the independent VPN reviewer, Top10VPN, showing that financial losses suffered by Pakistan owing to internet shutdowns in 2024 stood at $1.6 billion – the highest in the world.

Nonetheless, the government still hopes to attract foreign investment to boost jobs, encourage competition and expand the use of new technologies. But while total foreign investment in 2024 showed some improvement after a steep decline in 2023, the share of foreign direct investment (FDI) has remained near stagnant at below $2 billion.

Much of this is blamed on on-going domestic instability, opposition protests and related “shutter-down” strikes, as well as escalating violence in Khyber Pakhtunkhwa and Balochistan. All these factors have badly dented Pakistan’s image as a business-friendly country.

Security is without doubt a key consideration that will determine if the billions of dollars pledged by Pakistan’s close allies – Saudi Arabia, the UAE, and Qatar – in the exploration of mineral resources, especially in Balochistan, and in the oil, energy and agriculture sectors can translate into actual inflows. The same applies to commitments by Chinese companies, which are said to be holding back on investments into the second phase of CPEC. Although the inauguration of Gwadar International Airport last October has been hailed as a boost to business, Gwadar Port, operational since 2016, is still struggling to generate trade traffic owing to persistent security concerns in Balochistan.

It hardly needs saying that the challenges facing Sharif’s government one year after taking office remain formidable. While there has been speculation that the PTI’s campaign may be losing momentum, there can be no substitute for the genuine national consensus required to frame a comprehensive response to the resurgence of militant violence and the implementation of reforms to set Pakistan on the course to sustainable and equal growth.