What happens to the economic wheel when you don’t know who will be at the driving seat? The stock market fell victim to this uncertainty and shed over 15 per cent from its peak in May. Every day the incumbent government got a jolt – the day the Joint Investigation Team submitted its findings to the Supreme Court or the day the prime minister was summoned – the stock market tumbled. Call it herd mentality or panic selling, six months ago investors at the stock market did not see it coming. The prime minister’s disqualification – after his children were named in the Panama papers as those having offshore companies – is now real, but it was a far-fetched and improbable scenario at one point in time.
Over the course of the last six months, investors of the stock market somewhat factored in the worst scenario. But what about all the infrastructure projects, piling debt, uncertainty over the future value of the rupee and widening trade deficits? What about K-Electric’s acquisition and the China-Pakistan Economic Corridor? Businesses hate uncertainty, and prime minister’s disqualification would have been just that. However, what has transpired so far has been a good roadmap. The finance ministry has openly said that it will maintain the current dollar-rupee parity. Chinese officials have vowed support for CPEC, regardless of who is incharge, and the stock market gave a glimpse of recovery when it ended flat on Friday. The PML-N has laid out its back-up plan, which is not so different in ideology, in saying that it would want Shehbaz Sharif as the prime minister. At this time, there seems little reason to worry. The government has not been challenged. It’s still at the helm. With elections around the corner, one hopes that the transition is smooth. Nothing hurts business sentiment more than something that happens out of the blue. Pakistan may have never seen a prime minister last a full term, but it may see two successive governments completing their tenure. This is what businesses want. A stable, consistent authority that has control and is open about its agenda, at least. The worst may very well be over for the business community.
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