In early 2022, opposition parties, led by the Pakistani People’s Party (PPP) and the Pakistani Muslim League – Nawaz (PML-N), stepped up their attacks on Prime Minister Imran Khan to oust him. Allies of the Tehreek-e-Insaf (PTI) governmental coalition also expressed dissatisfaction with Khan due to dire financial straits from worsening national economic distress. The government of the former cricket player lost its parliamentary majority and faced a no-confidence vote from the opposition. Although the ousting of the Khan government was officially motivated by economic misrule, it was ultimately driven by friction over foreign and domestic policy decisions resulting in Khan losing the support of the Army. In a swift turn of events, the National Assembly accepted Khan’s allegations of a plot between the United States and the opposition to oust him and rejected the no-trust motion. However, an intervention of the Supreme Court of Pakistan overturned these decisions. Taking advantage of his vulnerability, the political opposition dismissed Khan with a parliamentary vote.

Imran Khan was succeeded by Shehbaz Sharif, the younger brother of former Prime Minister Nawaz Sharif and leader of an alliance of united opposition parties having the common aim to ouster the PTI government. The fledgling government had to address a dire economic crisis amidst significant pressures from Khan’s PTI opposition party and an unprecedented natural disaster crisis. In parallel, the new administration had to mend relations with Washington cooled by Imran Khan’s foreign policy, taking care not to compromise crucial ties with Beijing.

Keywords – China; crisis; economy; floods; opposition; Russia; USA

1. Introduction

Pakistan’s aspirations to play a leading international role are expressed in the provisions of the Economic Outreach Initiative launched in 2020 [Government of Pakistan 2020, December 16]. The vision of the national foreign policy is centred on the domestic economy and supported by a geo-economic narrative aimed at promoting a positive image of Pakistan to the world and helping develop the country’s economic potential [Ibid.]. In January 2022, Pakistan unveiled part of its national security policy confirming a focus on economic growth and key partnerships, particularly with China as well as hoped-for ties with the United States [Government of Pakistan 2022; Yousaf 2022, January 11; Akhtar 2022, January 21].

In the period under analysis, Pakistan faced a severe economic crisis, which was the culmination of long-dated structural economic features.1 The financial distress was also attributable to the global Severe Acute Respiratory Syndrome Coronavirus 2 («SARS-CoV-2», henceforth «COVID-19» or «Coronavirus») health emergency. Pandemic-induced supply chain shortages have contributed to rising prices and a growing vulnerability to global shocks. In addition, inflation triggered by the surge in world oil prices linked to the Russian invasion of Ukraine aggravated the situation in Pakistan’s domestic economy.

In 2019, Pakistan borrowed US$ 6 billion from the International Monetary Fund (IMF). Initially, Khan’s government agreed with the IMF’s conditionalities but eventually failed to meet all of them and faced the suspension of the loan. Additionally, Khan’s administration borrowed US$ 10 billion altogether from Saudi Arabia, the United Arab Emirates, Qatar and China. During Khan’s tenure, Pakistan’s relations with a key traditional ally of Pakistan – Saudi Arabia – deteriorated over the neutral position kept by Riyadh on the Kashmiri issue and Islamabad’s attitude towards exploring new strategic partnerships [Corsi 2020, pp. 462-463]. At the same time, China remained dissatisfied with the slowed-down progress of the China–Pakistan Economic Corridor (CPEC, refer to section 4) and did not appreciate relations with the PTI government.

Pakistan’s ties with the United States plunged over Pakistan’s foreign choices [Notezai 2022, July 23]. Islamabad’s partnership with Beijing amid the US-China confrontation challenged Pakistan-US bilateralism and relations with the Western powers [Boni 2022, pp. 159-170].2 At the same time, Washington’s disinterest in forging a new partnership with Pakistan after its disengagement from Afghanistan further strengthened the PTI government’s strategic ties with China and Russia. In February 2022, Imran Khan visited Moscow to secure Russian energy support. Khan’s state visit occurred the same day Russia began military operations in Ukraine. The timing seemed set to represent the PTI leader’s acknowledgment of the legitimacy of the armed aggression and a choice of a side.

These substantial deviations from the provisions of the Economic Outreach Initiative and the foreign policy vision of the military establishment, combined with other internal frictions, fostered a lack of trust in the generals toward Khan, who lost the support of the Army [Jamal 2022, February].

Amid growing public discontent over rising inflation and economic hardship in the country, the Pakistani opposition filed a no-confidence motion in the National Assembly against Khan with the requisite number of votes needed to pass. The political opposition had fought Khan in the past, but this time he was made vulnerable by the lack of support from the military establishment [Nawaz 2022, April 14]. The votes of dissident PTI lawmakers and coalition partners left no chances for the government and its leader, who accused Washington and the opposition of a conspiracy to influence Pakistan’s domestic and foreign policy.

The Pakistani parliament chose Shehbaz Sharif to guide the nation. Sharif, the leader of the PML-N, inherited the leadership of a country facing critical economic challenges and high instability due to Khan’s attacks on the military establishment and the new government’s legitimacy. Furthermore, shortly after the election, the new government faced a national emergency due to torrential monsoon rains that caused severe flooding.

The new government’s top priority was to address the growing balance of payments crisis. Austerity, inflation, unemployment and a shortage of foreign exchange reserves limiting Pakistan’s import capacities stimulated the rise of political contestation and popular discontent. The new coalition government faced constant pressure from Imran Khan, who called for early general elections and did not interrupt his political attacks even during the national crisis triggered by the natural disaster. The victory of the PTI party in by-elections in several constituencies, including the Punjab province, raised further questions about the legitimacy and longevity of Sharif’s government.

Domestic priorities drove the new government’s foreign policy, which focused on diplomacy seeking to guarantee further financial assistance from the IMF and allies and reopen a dialogue with the United States. In his inaugural address, Sharif aligned his government’s approach with the provisions of the national security policy and called for improving relations with key partners.

2. The economic backdrop of the political crisis

A US$ 6 billion IMF Extended Fund Facility (EFF) rescue program was launched in July 2019 to address domestic and external imbalances [IMF 2019, July 3]. The IMF disbursed an immediate outlay of US$ 1 billion while the remaining amount was agreed to be phased in, subject to quarterly and half-yearly reviews [Corsi 2019, pp. 461-464]. Funding for the program was subsequently suspended amid the country’s growing economic challenges when Khan refused to embrace some of the policies and reforms necessary to complete the sixth revision, such as, for example, an increase in tariffs (electricity, energy, oil, etc.) and a lifting of tax exemptions and subsidies [The Business Standard 2022, January 31]. In 2022, the IMF relaxed these conditions to relaunch the stalled program and disburse the next US$ 1 billion loan tranche. IMF requested the Pakistani government to make the list of sovereign guarantees public, that is, the financial obligations and risks to which public finances are subject [Rana 2022, January 5; Sinha 2022, January 30]. Other IMF conditions involved ensuring the autonomy of the central bank, the State Bank of Pakistan (SBP), from the federal government’s control.

On 13 January 2022, the National Assembly approved the Financial Supplement Bill, also known as the «mini-budget», which was a financial plan to meet the conditions set by the IMF [PakTribune 2022, January 4; Fabbri 2022, February 8]. The mini-budget increased taxes in multiple sectors and targeted the withdrawal of approximately US$ 2 billion in tax exemptions.3 Moreover, a new bill was approved, in line with the IMF conditions, the SBP Amendment 2021. The salient features of this bill mainly entailed changes to the legal framework of the central bank to increase its autonomy, strengthen its accountability for controlling inflation and achieve financial stability [Government of Pakistan Finance Division 2022; Hameed 2022, January 6].

Following Senate approval of the SBP Amendment bill 2021 into law by a one-vote majority, the IMF board approved the release of the US$ 1 billion sixth tranche under the EFF [The News 2022, February 2].4 By then, Islamabad had received almost US$ 3 billion from the IMF – roughly half the program’s value. Nevertheless, despite the disbursement of the sixth instalment, the EFF remained suspended due to the government’s failure to comply with the implementation of other agreed conditions.

The measures introduced with the mini-budget impacted the vast majority of the citizens of Pakistan and caused internal institutional and political friction. In February 2022, Khan decided to freeze gas and electricity prices and announced government subsidization until the next fiscal year budget, despite cost increases in the global market. He also confirmed a tax amnesty regime for the industrial sector. The opposition protested the bill as a risk to national security given that further indirect taxes would generate more inflation and increase poverty [South Asia Journal 2022, January 17; Ani News 2022, February 10]. While not opposed to SBP’s autonomy, the opposition expressed concern for the lack of control over fiscal and monetary policy, which could make the SBP vulnerable to external influences from other countries and international financial institutions [Noshab 2022, January 5].

According to the SBP, under PTI’s mandate, Pakistan’s total debt and liabilities had increased by about 80% over pre-PTI government figures to approximately US$ 100 billion, exceeding liabilities accumulated by any previous government. Low tax collection, currency devaluation and high spending were among the main reasons for the rise in public debt [Siddiqui 2022, May 17; Gul 2022, May 17]. Pakistan’s forex reserves reduced from around US$ 17 billion to US$ 10 billion in two months. The country’s trade deficit was US$ 35.4 billion during the three quarters of the fiscal year 2021-22, 70% higher than the same period in the previous year. At the same time, inflation rose from less than 9% to 12.7% [State Bank of Pakistan 2022; Aamir 2022, April 13].

3. The external dimension of the crisis: Pakistan’s relationship with Russia under the Khan administration

Pakistan’s economic distress can also be attributed to vulnerability to energy supply shocks as well as the global supply chain crisis triggered by the COVID-19 pandemic. An over-reliance on imported natural gas made the domestic economy prone to inflationary shocks triggered by the surge in world oil prices. As European countries faced gas shortages following the Ukrainian crisis, Pakistan’s gas imports were reduced and shipping costs increased, resulting in energy scarcity and soaring prices [The Express Tribune 2022, June 15; Sabir 2022, June 19].

Pakistan’s relations with Russia have grown significantly since the economic cooperation of the 1970s and have developed in the context of strong and long-standing Indo-Russian ties. After the end of the war in Afghanistan and the collapse of the Soviet Union, Moscow established new relations with Islamabad. In 2011, when the United States and Pakistan reached their lowest level of confidence following the killing of Osama bin Laden in Pakistani territory by US military forces [Corsi 2011, pp. 101-108], Russia lifted the arms embargo on Pakistan and, in 2014, entered into a defence cooperation agreement with it. In parallel, Islamabad and Moscow enjoy a mutual collaboration with Beijing that has grown in recent years. Interests in Afghanistan and Central Asia and the Belt and Road Initiative (BRI) have seen these three countries support the Taliban government in Kabul. Subsequently, Pakistan, Russia and China recognized each other’s positions and interests in Afghanistan [Subramanian 2022, February 24]. At the same time, the relations of each of these countries with the United States have deteriorated in recent years.

The widened gap between Pakistan and the United States strengthened the strategic partnership between Islamabad and Moscow [Roy 2021, June 29; Yousafzai 2022, January 20]. Growing economic, energy and defence cooperation bind the two governments. Pakistan is interested in Russian military equipment and commissioned Russian Gazprom to build the Pakistan Stream pipeline carrying liquefied natural gas from Karachi to the city of Kasur in Punjab [The News 2022, September 15]. Russia has expressed interest in investing in the US$ 1.2 billion Central Asian and South Asian Power Plant (CASA-1000)5 project to create sustainable electricity trade between Tajikistan, the Republic of Kyrgyzstan, Afghanistan, and Pakistan, which is expected to have a commercial start date in 2024.

In February 2022, at the invitation of Russian President Vladimir Putin, Imran Khan visited Moscow, which was the first state visit of a Pakistani leader to Russia in 23 years. The visit had geopolitical significance given the contextual absence of a dialogue between the White House and Khan [Mallik 2022, February 6].

Khan went to Russia to seek greater bilateral economic engagement and support for energy projects [The Express Tribune 2022, February 24; Yousaf 2022, February 25]. Regarding defence and security, Pakistan’s concerns were triggered by Russia’s supply of a new modern S400 air defence missile system, obviously targeted against India. Talks centred on a mechanism for intelligence-sharing and enhanced cooperation. In regional and Afghan contexts, Pakistan and Russia cooperate and coordinate at various international multilateral and regional levels, including the Shanghai Cooperation Organization and the United Nations.

Although Khan did not make any statements from Moscow on the crisis in Ukraine, the timing of his trip to Russia – the same day as the Russian military invasion of Ukraine – proved to be a foreign policy blunder and created tensions with the military establishment, as explained in the following pages [Siddique 2022, February 25]. Pakistan expressed support for Ukraine’s sovereignty and territorial integrity, calling for easing tensions and establishing a dialogue. However, Pakistan refused to vote on a United Nations Security Council resolution that deplored the Russian military aggression [Yousuf 2022, March 1; Ibid. 2022, March 2; Sinha 2022, March 6].

4. The external dimension of the crisis: Pakistan’s relationship with China under the Khan administration

The CPEC is a segment of China’s BRI launched in 2015. CPEC is an economic corridor connecting Kashgar in the Xinjiang autonomous region in north-western China to the Pakistani port of Gwadar on the Arabian Sea near the border with Iran. The initiative establishes connections via land routes, special economic zones and oil pipelines, including energy and infrastructure projects currently under construction throughout Pakistan. CPEC attracts 25 billion worth of Chinese investments and supposedly favours China’s trade with the countries of the Middle East, Africa and Europe [Zaidi 2022, January 17]. Moreover, CPEC offers Pakistan the opportunity for economic development while having strategic political importance due to strengthening bilateral relations between Islamabad and Beijing. Since the launch of CPEC, Pakistan’s economy has grown significantly, with China as the main creditor. Notably, the percentage of public and publicly guaranteed external debt to China increased from 9.3% in 2013 to 27.4% in 2021 [Younus 2021, May 26; Afzal 2021, December 25; Naseer 2022, January 28;].

In early February 2022, Imran Khan visited Beijing to attend the Winter Olympics opening ceremony and meet the country’s leadership. The visit marked the culmination of celebrations to commemorate the 70th anniversary of establishing diplomatic relations between the two countries. Khan met with Chinese President Xi Jinping and Premier Li Keqiang to discuss wide-ranging issues. Several agreements were concluded during the visit, including industrial cooperation under the CPEC between the Pakistani Board of Investment and the Chinese National Development and Reform Commission [Dawn 2022, February 4; Wani 2022, February 8]. However, Khan left Beijing without significant achievements. Despite the agreements, the CPEC’s progress in recent years has been slow due to the pandemic. Moreover, China’s concerns have grown regarding its investments in Pakistan due to the lack of security and stability in the volatile northwest areas and Baluchistan [Siddique 2022, February 9; Baloch 2022, October 1]. Beijing showed reluctance to approve further loans for projects to be implemented under CPEC over concerns about the growing national debt and Pakistan’s ability to service the loans [South Asia Monitor 2022, May 8; Chaudhury 2022, May 10].

Chinese leaders were reportedly uncomfortable with Imran Khan’s premiership [Worldakkam 2022, July 31]. Beijing did not appreciate the Khan administration’s interference and controls over Chinese investment to ward off the damaging effects on the country due to a lack of transparency, tax incentives, unfair advantages and the possible advance of corruption.

5. The internal dimension of the crisis: Khan and the military establishment

Mr. Khan’s electoral success in 2018 was primarily traced to the support he received from the country’s military establishment [Corsi 2018, pp. 362-365; Ibid. 2019, pp. 456-457]. During its tenure, the PTI accepted frequent military interventions in domestic and foreign politics [Ibid. 2020, pp. 452-454]. However, towards the end of 2021, the Pakistani military began reducing its support for Khan. The ex-cricket champion faced friction with the Chief of Army Staff (COAS), General Qamar Javed Bajwa, over issues related to a critical appointment and foreign policy. In October 2021, the two clashed over replacing the director-general of Inter-Services Intelligence (ISI). While Khan wanted General Faiz Hameed to continue his post, he was eventually replaced by General Nadeem Anjum.6 Subsequently, Khan supported Hameed’s candidacy as Army Chief to replace General Bajwa upon the expiration of his term in November 2022.7 The political repercussions of these frictions were intense [Mishra 2022, May 7].

Khan’s foreign policy deviated significantly from the military establishment’s vision of building, strengthening and expanding strategically important international partnerships while nurturing the ongoing ties with China [Corsi 2021, pp. 347-349]. Imran Khan adopted an uncompromising foreign policy stance by communicating to the world, in no uncertain terms, Pakistan’s readiness to forge alternative alliances without hesitation if the Western powers did not show interest in establishing bilateral relations with Islamabad beyond those focused on security. Indeed, the Biden administration showed little interest in strengthening economic ties with Pakistan. This was made evident by the absence of direct communication between the two leaders. During and after the US withdrawal from Afghanistan, Washington expressed a continued interest in relations with Islamabad only concerning a strategic security partnership [Corsi 2021, pp. 352-356.]. The Biden administration perceived Khan’s refusal to cultivate such ties with the White House as a sign of the PTI government’s reluctance to prioritize US interests in South Asia, which increased Islamabad’s isolation from Washington.8 Along with the absence of a high-level dialogue, Khan publicly expressed his unease about bilateral relations with the United States and stressed his resistance to Washington’s foreign policy using anti-American rhetoric [Rana 2022, March 9; Masood 2022, March 22].

Khan’s visit to the Kremlin, which occurred when Russia invaded Ukraine, further alienated Islamabad from Western partners at the risk of hampering the military’s efforts to promote a more meaningful role for Pakistan globally [Mohan 2022, February 23]. Also, Khan created tensions with the European Union when he took a provocative approach against Brussels after being urged by the European Commission to condemn Russia’s attack on Ukraine during the March 2022 United Nations General Assembly session [Yousuf 2022, March 9].

The tensions with the military materialized in the position of political neutrality assumed by the Army, which did not intervene to protect Khan from the attacks of the opposition, allowing the development of the political crisis [Subramanian 2022, March 31].

6. Opposition reinvigorated, and the ousting of the Khan government

2022 began with opposition parties blaming Imran Khan when the Monitoring Committee of the Pakistan Election Commission made it public that the ruling PTI had not disclosed it was the holder of bank accounts on which it had received millions of dollars between 2008 and 2013 from donors [Virk 2022, January 5]. PML-N Vice President Maryam Nawaz Sharif called for Imran Khan’s resignation [Hassan, 2022, January 7]. In January 2022, the PPP announced a rally against rising prices and gas shortages, calling on the Electoral Commission of Pakistan to act against the PTI [The Express Tribune 2022, January 7]. Despite the political friction between the PPP and the PML-N, Bilawal Bhutto agreed to rejoin the Pakistan Democratic Movement (PDM).9

Riding the wave of public discontent due to the country’s economic difficulties, on 8 March 2022, opposition parties filed a motion of no confidence against the premier in parliament, which was then submitted to the National Assembly on 28 March 2022 [Khan 2022, March 20; Singh and Ravishankar 2022, March 31].

According to the provisions of the Constitution, a prime minister is elected by a majority of the 342-member National Assembly (172 votes). The same votes are needed to oust a prime minister and dissolve a cabinet with a vote of no confidence [Shehzad 2022, March 18]. The PTI government had 179 seats in parliament, including 17 lawmakers belonging to coalition parties [Corsi 2018, pp. 366-370]. Dissident lawmakers from the ruling PTI party and coalition partners announced they would not vote against the motion [Pakistan Standard 2022, March 16; Dawn 2022, March 17]. On 30 March 2022, the Muttahida Qaumi Movement-Pakistan (MQM-P) – Khan’s ally with seven members in the National Assembly – struck a pact with the opposition and left Khan’s ruling coalition [The Indian Express 2022, March 31; Subramanian 2022, March 31]. When a group of ruling coalition lawmakers announced they were considering voting against Khan, it was clear that the opposition had the numbers to oust the Prime Minister [OpIndia 2022, March 8; Shah 2022, March 18; Almeida 2022, March 25].

7. The alleged international conspiracy behind the fall of the PTI government

Khan and the PTI accused the opposition of disloyalty to the state, alleging that it was part of an international conspiracy against the democratically elected government in Pakistan. According to Khan, the PDM coalition and the Biden administration had plotted a coup to oust him from politics and form a government with the tacit consent of the military establishment. Khan referred to meetings held between US consular staff members and Pakistani opposition leaders and a communication from the Pakistani Ambassador to the United States, Asad Majeed, according to which Washington had expressed regret over Khan’s independent foreign policy [Oborne 2022, April 7].

On 7 March 2022 – the day before the motion was submitted to the National Assembly Secretariat – Donald Lu, the assistant secretary of State for South and Central Asia in the United States Department of State, had allegedly told Ambassador Majeed that if the no-trust vote against Khan was successful, Washington would normalize bilateral relations with Pakistan. According to Khan, his meeting with Putin was an irritant and one of the reasons the US government wanted him removed from power. Upon Khan’s ouster, the Kremlin released a formal statement accusing Washington of «another attempt of shameless interference in the internal affairs of Pakistan for its own selfish purposes» [The News 2022, April 5]. The statement added that the political situation in Pakistan «leaves no doubt that the US intended to punish disobedient Prime Minister Imran Khan» [Ibid.]. Khan’s allegations led to a denial by the US State Department spokesperson [The Hindustan Times 2022, April 30].

While a motion of no confidence is regulated under Article 95 of the Constitution, the PTI invoked Article 5, paragraph 1, of the Charter which states that «loyalty to the State is a fundamental duty of every citizen». On 3 April 2022, the Vice President of the National Assembly, Qasim Suri – a member of the PTI – called the motion of no-confidence against Imran Khan unconstitutional and «supported by foreign powers» and did not allow it to be voted [The News 2022, April 3]. Soon after, Imran Khan advised the President of the Islamic Republic of Pakistan, Arif Alvi, to dissolve the assemblies and prepare for elections within 90 days in line with the provisions of the Constitution of Pakistan. Subsequently, the Cabinet Division10 de-notified Imran Khan as prime minister while confirming his position until a provisional government was appointed [Mohan 2022, April 3]. On 7 April 2022, the Supreme Court of Pakistan overturned President Alvi’s decision and ruled that the dissolution of the lower house was unconstitutional [The Express Tribune 2022, April 7]. On this basis, the Supreme Court ordered the restoration of the National Assembly and called for it to vote on the non-trust action against Imran Khan on 9 April 2022. That day, after a long session of the National Assembly, the motion was passed with 174 votes. In the early hours of 10 April 2022, Imran Khan’s term as prime minister of Pakistan was over [Almeida 2022, April 9; OpIndia 2022, April 10].

The opposition nominated PML-N President Shehbaz Sharif as an interim premiership candidate. Minutes before the vote, the PTI National Assembly members resigned en masse in protest, forcing new by-elections to undermine the new government’s legitimacy.

8. Domestic challenges of the new coalition government: the economy, Khan’s opposition, and the floods

With 174 votes – two more than the required simple majority – the Pakistani parliament chose opposition leader Shahbaz Sharif as prime minister to guide the country at least until general elections, which are due no later than October 2023 [Masood and Goldbaum 2022, April 11]. Shehbaz Sharif is the younger brother of former Pakistani premier Nawaz Sharif. He was elected to the National Assembly in 1990 and became chief minister of Punjab in 1997. Together with Nawaz, Shehbaz Sharif spent several years in exile in Saudi Arabia following General Pervez Musharraf’s military coup in 1999 [Purkayastha 2022, 10 April; Hassan and Peshimam 2022, April 9; First Post2022, April 10; The Express Tribune 2022, April 12]. After returning to Pakistan in 2007, Shehbaz Sharif was re-elected chief minister of Punjab in 2008 and 2013, governing the province until the PTI’s electoral success in 2018. In 2018, he was appointed president of the PML-N after Nawaz Sharif was disqualified from office as opposition leader in connection with the Panama Papers scandal [Corsi 2018, pp. 359-362].

Prime Minister Shehbaz Sharif inherited a country in a challenging economic predicament. A complex external conjuncture combined with procyclical domestic policies had increased domestic demand to unsustainable levels and led to significant fiscal and external deficits, rising inflation and eroding reserve buffers. In April 2022, the IMF set five main conditions for relaunching the EFF bailout package. These measures included the cancellation of fuel subsidies, lifting the tax amnesty regime, increasing electricity tariffs, imposing new taxes and guaranteeing savings to reduce the budget deficit [Rana 2022, April 21].

In May 2022, in Doha, Qatar, a delegation from the new government led by Finance Minister Miftah Ismail and the IMF initiated the seventh economic review interview to relaunch the stalled EFF bailout package [The Express Tribune 2022, May 18]. Pakistani authorities agreed in principle with the IMF’s requests. Yet, a consensus was not reached on several issues, such as the budget deficit, the revenue target, the plan to withdraw energy subsidies, inflation, and the rationalization of expenses [The Express Tribune 2022, May 20; Ibid. 2022 (a), May 22; Ibid. 2022, May 25; Ibid. 2022, May 26].

On 10 June 2022, amid intense pressure to stabilize the economy and reach an agreement with the IMF, the new government unveiled its budget for the fiscal year 2022-23. Finance Minister Ismail presented the spending plan to the National Assembly with an outlay of about US$ 50 billion. The austerity measures proposed included both stabilization efforts and additional taxes. The plan showed that Pakistan had agreed to meet IMF conditions such as the reversal of subsidies, withdrawal of the tax amnesty scheme, increased tariffs, and the imposition of new taxes to revive the aid package. The budget set development spending at US$ 4 billion, out of which about US$ 1.7 billion (a 2.7% increase over the previous fiscal year), initially earmarked for defence, was then reduced to US$ 1.4 billion to comply with the limitations imposed by the IMF.

Proposed critical interventions included raising taxes on the wealthiest segments of society, privatizing government assets to increase revenue and reducing national expenditures [Syed 2022, June 12; Masood 2022, June 29; Rana 2022, July 6]. The budget law introduced a reduction of subsidies to the electricity sector, and provided for an increase in tariffs of around 20%. In addition, a 455% increase in the targeted revenues from the oil development tax to US$ 3.7 billion heralded the end of subsidies on petroleum products.

The budget set the target at US$ 43 billion, including an additional 2% tax on individual taxpayers, 39% on banking companies and an increase in the tax burden on non-resident Pakistanis [Government of Pakistan Finance Division 2022; Aamir 2022, June 9; The Express Tribune 2022 June 9; The News 2022, June 10]. Conversely, a tax reversal and subsidiary incentives were offered to the construction and real estate sectors [Kiani 2002, June 11; Sajjad 2022, June 11; Business Recorder 2022, June 11].

After completing the combined seventh and eighth reviews under the EFF for Pakistan in July 2022, the IMF Executive Board approved Pakistani authorities’ request for waivers of nonobservance of the performance criteria. IMF acknowledged measures taken by Pakistan to address the country’s worsened fiscal and external positions and allowed for the immediate disbursement of the US$ 1.17 million tranche [Rana 2022, July 14; IMF 2022].

The dire economic situation did not improve under the new government, whereas Khan’s popularity grew [Tarar 2022, May 15]. Khan’s post-ouster political reaction and call for a genuine democratic system and parliamentary government in Pakistan mobilised the masses and increased his grip on the people. Khan announced street demonstrations and protests criticizing the armed forces, threatening to overthrow the new government and demanding that early elections be held before the expiry of the government’s term at the end of 2023. Police arrested several PTI opposition leaders, and protests turned into skirmishes between police and Khan’s supporters [Mahmood 2022, May 23].

The resignations en masse of all the PTI lawmakers in parliament’s lower house in April 2022 following the change in government imposed new by-elections. Three months after Khan’s ouster, the PTI party won 15 Punjab provincial assembly seats out of the 20 available in the July 2022 by-elections [Adnan 2022, July 17; The Express Tribune 2022, July 18]. The electoral success was astounding, weakening the credibility and legitimacy of the coalition government because Punjab is traditionally the electoral stronghold of the PML-N – the leading political force. Thanks to the landslide victory, the PTI controlled Punjab, Khyber Pakhtunkhwa and Gilgit-Baltistan. Similarly, Khan won an important constituency in Karachi, which is a stronghold of the MQM-P [The Express Tribune 2022, August 21; Ibrahim 2022, August 24]. Moreover, in October 2022, the PTI won seats in Peshawar, Mardan, Charsadda, Faisalabad, Nankana Sahib and two of three Punjab Assembly seats [GeoTv 2022, October 17].

Khan’s political attacks were not interrupted by the natural disaster that hit Pakistan at the end of August 2022 [Jamal 2022, September 8; The Express Tribune 2022, August 5]. Pakistan faced unprecedented rainfall and catastrophic monsoon floods, which in August alone tripled the average annual rainfall [Mallick 2022, September 6; Atlantic Council 2022, September 9]. According to the media, Sindh and Baluchistan, the worst-affected provinces, experienced 784% and 496% increases in monsoon floods, respectively [Abbas 2022, August 26]. One-third of the country was flooded, over 1500 people died, and about 33 million were affected by the disaster [Patel 2022, August 31]. Pakistan appealed for assistance from the international community, receiving donations and aid from many nations to address the «climate» catastrophe, as the United Nations described it [UNOCHA 2022 (a); Times of India 2022, September 10; Adil 2022, September 8; Wadhwa 2022, September 10; UNOCHA 2022, November 14].

With damages estimated to be more than US$ 40 billion, a projected 2.2% decline in GDP, displaced people and increased food insecurity across the country, the floods severely impacted the already suffering national economy [UNOCHA 2022 (b); The International Rescue Committee 2022, August 30; Mangi 2022, October 19; The World Bank 2022, October 28]. The response of the government proved to be inadequate in providing rescue and timely assistance to the population [Khan 2022, August 29]. Imran Khan accused the past Sindh PPP governments of years of corruption and mismanagement in governing the province.

The by-election results showed that Khan could survive as a prominent politician without the support of the Army and that, had the election been conducted in 2022, Khan would have had a chance to return to power. Strengthened by the electoral results, Khan intensified his attacks against political opponents and the military establishment. During an Islamabad speech in August 2022, Khan attacked and threatened police officers and a judge over the arrest and alleged torture of Shahbaz Gill. A special assistant to Khan, Gill was charged with sedition, arrested and allegedly tortured under interrogation after inciting soldiers to disobey orders from their military leaders. Over his speech, Khan was charged under anti-terror legislation by the police. The Islamabad High Court granted Khan a protective bail blocking his potential arrest; however, his addresses were banned from broadcast television and his access to some social media was reportedly also disrupted. According to Mr. Khan and his allies, his opponents and the military had initiated a crackdown on him and his party to prevent him from returning to power [Shankar 2022, August 22; Campbell 2022, August 22].

In October 2022, Pakistan’s Election Commission disqualified Khan from holding public office after finding him guilty of illegally selling gifts from foreign dignitaries when he was prime minister. While the consequences of the ruling were not known in the period analysed by this text, Khan’s popularity increased further [Rafiq 2022, September 2; Naseer 2022, September 8; Khatlani 2022, October 23]. At the end of October 2022, Khan launched a week-long march from Punjab heading to Islamabad followed by thousands of PTI supporters to force the government of Shehbaz Sharif to early elections [Raja 2022, October 31]. During the march, Imran Khan was injured and wounded in the leg in an assassination attempt in Wazirabad by a gunman who was captured afterwards. Addressing the nation from the hospital, Khan accused the government and the military of being behind the attack. Members of the PTI party revealed that they had been informed of possible assassination attempts and challenged the involvement of one gunman only reporting about hearing automatic gunfire. The captured shooter claimed that he acted alone for no political reasons. While the event strengthened the opposition, it indicated the need for a de-escalation of the tension reached by Pakistani politics, where Sharif’s government was supported by the military establishment but appeared not to have that of the people. The government refused to hold an early election but maintained an open communication channel with Khan [Dawn 2022, November 3; The Express Tribune 2022, November 4].

9. Foreign policy priorities of the new government: reconciliation with the United States, confirmation of strategic ties with China and a stable relationship with Afghanistan

Addressing foreign policy issues in his inaugural speech to parliament after the elections, Shehbaz aligned with the Economic Outreach Initiative’s provisions and reiterated the partnership’s centrality with China while wishing the country to forge equally good bilateral relations with the United States [The News 2022, April 11; Yousaf 2022, April 19; Riedel and Afzal 2022, April 22]. PPP President Bilawal Bhutto Zardari, appointed Minister of Foreign Affairs of the coalition government, made a debut visit to Washington in May 2022 [The Express Tribune 2022 (b), May 22; Ibid. 2022, May 27]. In June-July 2022, an official visit of the US Assistant Secretary of State for International Narcotics and Law Enforcement Affairs to Islamabad focused on the US-Pakistani partnership, highlighting the 75th anniversary of bilateral relations [Daily Times 2022, July 2; South Asia Journal 2022, July 2; The Express Tribune 2022, July 30]. A series of communications and meetings between the two governments reiterated the mutual commitment to deepen Pakistan–US ties, particularly after the humanitarian crisis [Yousaf 2022, July 7; Hussain 2022, July 8; US Department of State 2022, September 26; The News 2022, September 27]. In addition, the US State Department approved a US$ 450 million sale of F-16 aircraft and related equipment to Pakistan [Reuters 2022, September 8; Jamal 2022, October].

In August 2022, several US drone strikes occurred in Afghanistan, including one that killed al-Qaeda chief Ayman al-Zawahiri in Kabul. It is unclear where the drones took off and their route to the Afghan air space. However, the increase in the strikes in Afghanistan strengthened the belief that the Pakistani military allowed Washington to use Pakistani territory or airspace after Khan’s sacking as part of the alleged plot that ousted the former premier [Rafiq 2022, September 4].

In May 2022, Foreign Minister Bhutto Zardari embarked on a trip to Guangzhou, China, at the special invitation of his Chinese counterpart, Foreign Minister Wang Yi. The visit, which coincided with the 71st anniversary of establishing diplomatic relations between Pakistan and China, focused on discussing the accelerating progress of the CPEC as well as regional and international issues. In June 2022, General Bajwa also visited China to attend the Pak-China Joint Military Cooperation Committee meeting, which is a bilateral military cooperation platform. In addition, an agreement was reached with Beijing for a US$ 2.3 billion commercial loan with an interest rate reduced by 1% to 3.8% [Yousaf 2022, May 21; Kartha 2022, June 15; Rana 2022, June 2]. According to unconfirmed sources, this was another by-product of the ouster of Imran Khan [Worldakkam 2022, July 31].

The new government confirmed its predecessor’s approach to Afghanistan by pleading for the Afghan cause and urging the international community to aid the neighbouring country.11 Tensions with the Taliban affect internal security, and Islamabad strives to resolve irritants and establish stable and sustainable bilateral ties with Afghanistan [Dawn 2022, January 5; Kugelman 2022, January 6; Rana 2022, January 9]. Pakistan has engaged in dialogue with Kabul to contain cross-border terrorism.12 Following the takeover of Kabul in August 2021, Islamabad requested the new rulers to address its main internal security problem, namely the Tehrik-e-Taliban Pakistan (TTP). The TTP is a Pashtun-centric organization that comprises several Pakistani militant groups and has targeted the Pakistani government and its security forces. After the defeat suffered in 2014 by the intervention of the Pakistani security forces, it has reorganized and expanded its operations beyond the northern frontier areas. It is now mainly based in eastern Afghanistan, in Gilgit Baltistan and Baluchistan and has escalated attacks in Pakistan after the Taliban gained control of the country [Corsi 2021, pp. 360-361; Schroden 2022, October; Khattak 2022, January 24; The Express Tribune 2022, April 19].

Instead of providing a list of the most wanted TTP terrorists, the Taliban government offered to broker a peace deal with the banned organisation. The agreement led to a ceasefire in November 2021, which lasted only one month [Khan 2022, December 10]. The killing of the TTP’s most wanted commander, Muhammad Khurassani, in Afghanistan’s Nangarhar province in January 2022 seemed to end the peace prospects [The Express Tribune 2022, December 11; Kamran 2022, January 9; Ibid. 2022, January 11]. Casualties among Pakistani soldiers in clashes with militants led Pakistan to launch air strikes against TTP fighters in the Afghan provinces of Khost and Kunar in April 2022 [Siddique 2022, April 21; South Asia Journal 2022, April 22]. In June 2022, the TTP announced an indefinite ceasefire. Pakistani authorities confirmed the resumption of negotiations, which resulted in a deadlock shortly thereafter [Naseem 2022, March 30; Jadoon 2022, June 24; Yousuf 2022, August 1].

10. Conclusions

Tensions with the Army over foreign policy and internal affairs led Imran Khan to lose the military establishment’s support. The political opposition exploited the vulnerability of Prime Minister Khan, gaining support for a motion of no confidence in parliament against him. Having lost the trust of the National Assembly, Khan had to resign as prime minister. He publicly accused the political opposition of having woven a plot with the United States, which was implemented with the tacit consent of the military. According to the former premier, the plan aimed to remove him from the political scene as he was unbalancing Pakistani foreign policy towards the Eastern bloc of China and Russia to the detriment of relations with the US and Western allies, which were desired per the Army’s geopolitical plans.

The parliament entrusted Shehbaz Sharif, president of the PML-N and leader of the opposition, with the post of prime minister. Once in power, the new prime minister had to focus on external relations to rebuild ties with strategic international partners. The severe economic crisis that gripped Pakistan at the time of Imran Khan’s fall did not find relief with the new government, which was forced to take unpopular measures to guarantee international loans while coping with a national emergency triggered by monsoon floods. Despite his fall from power, Khan’s popular following did not diminish. On the contrary, his party, the PTI, obtained significant results in by-elections in traditional strongholds of other political forces. Khan stirred crowds of followers, putting pressure on the fledgling government with constant demands for early elections. At the same time, he decried the alleged attempts by the military and opposition to crack down on the political opposition which he led, to avoid the possibility of his return to power.

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