Pakistan Peoples Party (PPP) had reached an agreement with three-time former prime minister Nawaz Sharif’s Pakistan Muslim League-Nawaz (PML-N) to form a coalition government after an inconclusive February 8 general elections in Pakistan.
The agreement between the two major political parties is expected to end days of political uncertainty in the country of 240 million grappling with an economic crisis amid slow growth, record inflation, and security challenges.
The consensus and power-sharing deal was reached after multiple rounds of talks spanning over one week to form the next government.
In a joint press conference at Zardari House in the federal capital on February 21 at midnight, the PPP Chairman and former foreign minister Bilawal Bhutto-Zardari confirmed the development, saying that the PML-N and the PPP have sufficient numbers to form the federal government.
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In the Feb 8 polls, the PTI-backed independent candidates emerged as the largest bloc with 93 seats in the National Assembly (lower house of Pakistan parliament), followed by PML-N with 75 seats while the PPP bagged 54 seats, according to official results.
No single political party is in a position to form its government due to a split mandate in the general election. The allegations of rigging in the February 8 polls have also led to countrywide widespread protests by Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) and other parties. The PTI has categorically announced that it will not make any alliance with both the PML-N and the PPP.
Shehbaz Sharif to be nominated Prime Minister and Zardari President
At the midnight presser, Bhutto Zardari confirmed that former premier Shehbaz Sharif, who was seated beside him, would be the coalition’s candidate for prime minister and that his father Asif Ali Zardari would be the alliance’s candidate for the country’s president.
“The numbers of Pakistan Peoples Party and Muslim League-Nawaz have been completed and God willing, we will now act on government formation,” Bilawal said. “It is hoped that Shehbaz Sharif sahib will soon become the prime minister of the country once again.”
Shehbaz Sharif, the younger brother of former prime minister Nawaz Sharif, said the two parties had the numbers to form the government and also had the support of other smaller parties.
In the house of 336 seats (including reserved seats), a minimum of 169 seats are required to form the new government.
A session of parliament has to be called by February 29 after which a vote for a new prime minister will take place, according to the constitution.
Pakistan share index rises 1.5% after political power deal
The Pakistan Stock Exchange (PSX) experienced a bullish trend on Wednesday morning (February 21), with shares gaining over 900 points or 1.5% a day after certainty about government formation.
Analysts attribute this surge to the recent consensus reached between the Pakistan Muslim League-Nawaz (PML-N) and the Pakistan Peoples Party (PPP) to share power in forming the next government. Last week, concerns about government formation amid widespread protests over alleged election result manipulation had kept market sentiment subdued.
The index surged to 61,422.16 points by 9:55 am, marking a substantial increase of 957.92 points or 1.58% from the previous day’s close. Tahir Abbas, head of research at Arif Habib Limited, highlighted that the market responded positively to the clarity on the political direction regarding government formation.
Traders said the trend reflects renewed investor confidence following the political agreement. Awais Ashraf, Director of Research at Akseer Research, emphasized that the clarity on government formation has restored investor confidence. “The new setup will likely continue with the reforms and take a more cohesive approach for settling issues between the Centre and provinces required for fiscal discipline,” he said in a report by Dawn.
Pakistan bracing for PDM 2.0
Pakistan’s oldest and major English newspaper Dawn claimed that the political consensus reached at midnight after multiple rounds of talks has paved the way for ‘PDM 2.0’.
In her column in Dawn, journalist Arifa Noor wrote that “That PDM 2.0 (or the senior citizens club) is about to be revived is a triumph of hope over experience. This time around, it will manage the IMF and carry out reform while saving itself and the country from its perennial finance minister.” She remarked that if anything, the polls may bury the myth of an election bringing about stability and quiet. “That old ‘analysis’ is about as relevant as a text message, and it should be dropped along with the caretaker government (one waits with bated breath), as we brace ourselves for not just PDM 2.0 but also instability pro max.”