The pitfalls of populist leaders

Does populism have a role in the making of the current economic crisis in Pakistan? The general perception in business circles is that it does. For many, delays in harsh but necessary policy decisions by the last and the current government are the most blatant expressions of the populist tendencies of rulers in Pakistan. The initial reluctance of former prime minister Imran Khan’s government to strike the International Monetary Fund (IMF) deal and its decision to disregard the tenets of the agreement with the donor last year just before prime minister Khan lost the majority vote in the parliament are said to be an expression of the populist genesis of his party PTI. It derailed the IMF programme that drove the country to the brink of sovereign default. Compelled by the twin deficits, the Shahbaz government revived the IMF Programme and former finance minister Miftah Ismail tried to follow through on the deal by hiking fuel and energy rates. However, fearing the public backlash Finance Minister Dar avoided IMF’s dictates that further deepened the crisis before surrendering to the IMF’s wishes: let the rupee readjust more freely to market value and pledged to implement other conditions without delay, only last week. The footdragging by the PDM government in complying with the IMF’s calls is also perceived to be populist.