Cracks in the edifice

IT is not yet clear how deep and how sustained they are, but cracks are now appearing in the edifice that is the hybrid plus regime running Pakistan these days. This is a natural consequence of the cul-de-sac where the economy is now parked. In the early months of 2025, Pakistan hit what I called “peak stability”, which was a state of affairs where the economy had been stabilised, its debilitating deficits bridged, inflation extinguished. The big question at the time was what comes next. No economy can remain in stabilisation mode for very long. At some point, a vision to transition out of stabilisation towards growth had to be implemented, with a kind of growth that would not open the door to the deficits one more time. But that didn’t happen. Earlier this year, I wrote that we have reached the end of stability. The hunger for revenues and foreign exchange is rising while the economy remains mired in a low-growth stability. And now that hunger has reached the hallowed halls of politics and tested the coalition upon which the government’s majority in parliament (or what is left of it anyway) stands. The run-up to this budget now sees peak stability rubbing up against its political limits, and the delays in the holding of the National Economic Council meeting — critical to finalising the budget before it is tabled before parliament — show that the edifice is cracking under the strains of operating within its limits. To see this strain, consider a simple observation. I have never seen the political class of this country as out of ideas as they are now. In the past, for better or worse, at least we had some ideas, some kind of thinking, to tackle the limitations of the state and economy within which they were operating. The ideas may not have been the best, but at least they existed. We had amnesty schemes, some crafted rather shrewdly, and clever schemes for exporters. We had “deemed incomes” to tax the rich with and a new tax on banking transactions. In 2009, they ca