Pakistani prime minister Imran Khan was removed from office on Sunday after several weeks of political turmoil that culminated in a vote of no confidence from the country’s Parliament. Khan, a celebrity cricketeer turned politician, oversaw a tumultuous term defined by external events. The new prime minister, Shehbaz Sharif, must manage a weak coalition government through a turbulent economic situation—and all while facing down a general election soon. Below, Carnegie nonresident scholar James Schwemlein explores the implications of the recent constitutional crisis for Pakistan’s economic and foreign policy outlook. 

What should we make of the vote of no confidence?

Khan’s rise to the head of the Pakistani government occurred with the support of the Pakistan Army, which remains the dominant institution in the country. Khan’s outsider status and populist appeal as a former cricket star put him in clear contrast to the dynastic political families that have rotated through government. 

James Schwemlein
James Schwemlein is a nonresident scholar in the South Asia Program at the Carnegie Endowment for International Peace.
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But in office, his lack of experience in government and cavalier attitude toward foreign policy became a source of tension with the army’s leadership. Disagreements between Khan and the army’s senior leadership, particularly Chief of Army Staff Qamar Javed Bajwa, came to a head when Khan tried to intervene in October to block the appointment of a new director for the country’s intelligence agency in favor of an incumbent he preferred. 

The army claimed neutrality in the run-up to the no-confidence vote, but that assertion is not true. Khan’s rise occurred with the army’s blessing, and his fall came after the army removed its support.

What should we expect from the new coalition government? 

Sharif, who was elected on Monday, received the fewest votes in Parliament of any prime minister in Pakistan’s history. One of the most experienced government executives in Pakistan, Sharif is a three-time chief minister of Punjab, the country’s largest province, and the younger brother of four-time prime minister Nawaz Sharif, who was removed from office five years ago and who remains in exile.

In his previous terms as Punjab’s chief minister, Shehbaz Sharif built a reputation as a “doer” not a “talker.” On Tuesday, his first day as prime minister, he shocked career staff by arriving at 7:00 a.m. and announcing extended office hours and a six-day workweek. He is notoriously hard-driving, both of himself and of others. This approach became known as “Punjab speed,” a reference to the concrete results that the provincial government delivered in Punjab during his tenure.

But Sharif’s government is a coalition made up of seven parties with distinct political interests that were united in opposition to Khan but that in practice do not share a common policy agenda. The core of the coalition is a partnership between the Pakistan Muslim League-Nawaz, the party led by the new prime minister’s brother, and the Pakistan Peoples Party, founded and led by the Bhutto family. It appears likely that Sharif’s cabinet may feature Bilawal Bhutto, the son of the late Benazir Bhutto and former president Asif Zardari; this would be Bilawal Bhutto’s first term in federal government.

Maintaining civilian-military comity will also be a challenge for Sharif. Bajwa’s term as army chief ends in November, and prior to the recent crisis, he had not been shy about his desire to have his tenure extended. One implication of Khan’s removal is that Bajwa will likely be replaced on schedule, which in many ways would be a welcome return to normal. But much can change in the next six months.

The new government also faces an extremely short period in office. Elections must be held no later than October 2023 and likely will occur early. About three months before the election, the sitting government will have to resign, and a caretaker government will take over. Since the Election Commission of Pakistan has said that the earliest it could administer a general election is October 2022, this government will enjoy at least three months and at most about 14 months in office.

How will this affect Pakistan’s economic trajectory?

The government inherits a very difficult economic situation. The Pakistani economy worsened over Khan’s term in office, due to both undisciplined government spending and the pandemic.

Sharif and his economic team have signaled an intention to return to the International Monetary Fund (IMF)—a tradition for new governments in Pakistan—which has bolstered market confidence in the near term, after the shock induced by the constitutional crisis. But a return to the IMF will require fiscal discipline, which means reductions in government spending, elimination of subsidies for fuel, and an increase in revenue collection, among other actions—all of which are politically challenging, especially with an election looming. 

Perhaps Khan’s most ill-advised policy measure in recent weeks was a decision to install a significant fuel subsidy to shield people from international price volatility. The new government will likely have to remove this subsidy in stages, which appears likely to result in an increase in domestic fuel prices by about 35 percent over time.

Pakistan’s debt exposure also poses a significant near-term challenge. Pakistan had benefited from the pandemic-related debt service suspension program that was launched by the G20 and concluded at the end of 2021. According to IMF data, about $15 billion in foreign debt service obligations are due starting in July, about two-thirds of which appears to originate from Chinese sources, likely related to the China-Pakistan Economic Corridor. While Pakistan is not as debt-distressed as other emerging markets, such as Sri Lanka, these debt service obligations do pose a sizeable dilemma for the new government at this stage.

Will Khan remain a force in Pakistani politics after the vote of no confidence?

Khan clearly is plotting a populist campaign to return to office in the next election, but it is unclear whether that is possible without the army’s support.

Perhaps the most pernicious action taken by the former prime minister in the last days of his term in office was to blame the effort to remove him on a foreign-backed conspiracy. The allegation—for which there is absolutely no evidence—is that Khan received a threatening letter from a U.S. interlocuter, which said in essence that so long as he remained in power, Pakistan’s relationship with the United States would suffer.

This effort to decry his opponents as illegitimate seems to be straight out of the demagogue’s handbook. Khan and his party appear to want to mobilize a popular movement into the streets and repeat, in many ways, what Khan did to Nawaz Sharif’s government before the last election with the army’s support. This is a recipe for disruption in major cities, which could further paralyze the government and harm the economy. The fear is that it could also lead to violence.

How does this affect Pakistan’s foreign relations?

Pakistan’s army is the prime authority for most foreign policy decisions, so the change in Pakistan’s civilian leadership will mostly have little effect on the country’s foreign policy. But there are several important relationships where Khan’s removal and the arrival of a replacement could alter the dynamic in meaningful ways.

After the calamitous U.S. withdrawal from Afghanistan, the U.S.-Pakistan relationship has remained at an ebb. The lack of communication between Khan and U.S. President Joe Biden became a public grievance but highlights the degree to which the U.S.-Pakistan relationship is run through the army structure. In reality, Khan’s departure from office on its own is unlikely to have a positive or negative effect on the two countries’ relations. But Khan’s conspiracy claims are at the very least likely to lead to strict scrutiny of all of Pakistan’s engagements with the United States and the West.

Some of Pakistan’s closest historical partners—China, Saudi Arabia, the United Arab Emirates, and Turkey among them—were uncomfortable with Khan’s freewheeling, personal style of diplomacy. While each of these relationships is led by the Pakistan Army, the return of a more well-known and experienced interlocutor on the civilian side is likely to be a boon, which will be particularly important as the government returns to the IMF, seeks to renegotiate the terms of foreign loans to reduce the growing pressure of debt service payments, and continues to negotiate to purchase oil and natural gas. Shehbaz Sharif has committed to visit Saudi Arabia and China soon, in a nod toward their importance as strategic partners.

The other major relationship to mention is with India. In recent years, the Indian government and the Pakistan Army have made important, quiet overtures aimed at improving ties. Sharif will be supportive of this effort, but particularly ahead of the general election, there is likely to be little appetite to make accommodations that could progress talks with India.