For a Pakistan in dire economic straits, Imran Khan's arrest drama is a dangerous sideshow

The unprecedented scenes of crowds of Pakistan Tehreek-e-Insaf (PTI) party supporters, angered by the arrest of their leader and former prime minister Imran Khan, storming the army’s headquarters in Rawalpindi as well as the home of the corps commander in Lahore has led to speculation, especially among foreign observers, that the country is teetering on the brink of a revolution.

In reality, this is just another skirmish in the battle for the high ground ahead of the general elections that are supposed to be held this year. But regardless of who wins those elections, the political class's fixation on its own infighting, as well as pseudo-populist economics, is alienating the country from the international financial institutions that they are relying on to rescue Pakistan from an oncoming Sri-Lanka style economic disaster.

In the very short term, the national coalition government under Shehbaz Sharif may be hoping to render Mr Khan unable to conduct an effective election campaign, either due to incarceration or the distraction of legal proceedings. This is in no small part because the highly populist PTI movement is stronger than ever –particularly among young people and the middle class – in Punjab, the country’s largest province.

The stakes for the politicians on both sides in these elections goes beyond power or profit. The very significant ratcheting up of censorship and intimidation against opposition parties (many of whom banded together to form the current government) during Mr Khan’s time as prime minister (2018-2022) have them deeply worried about what awaits them should the PTI return to power.

Traditionally, the higher judiciary and army leadership broker solutions when clashes between politicians threaten political stability, but neither institution is now in a position to play that role. A major factor in the fall of Mr Khan's government was the deep rupture that emerged between him and the army. Despite decades of close co-operation with the military, Mr Khan, excited by the passionate loyalty of millions of followers in the heart of the army's recruiting grounds, is now unwilling to subordinate his political interests to those of the military, or indeed anyone else.

The Pakistani army’s leadership in the past has often given opponents who are popular within its own ranks, or in Punjab more generally, ample space to overreach themselves before cracking down. In this case they appear to have deliberately allowed the pro-Khan crowds to rampage through normally off-limits areas without putting up resistance, and allowed television cameras to beam the shocking images to the public. This is not nearly as surprising as it may first sound.

For one, the army has little history of using unrestrained force against unarmed Punjabi protesters; many officers and enlisted are themselves Punjabi, creating a risk that they might refuse such orders, threatening the army’s cohesion. For another, creating martyrs would enhance the status of the PTI and Imran Khan, and supercharge the protests. And finally, thanks to the scenes of crowds looting defence facilities without any shots fired, important sections of the public allergic to public disorder are now much more likely to throw their weight in support of the army taking firm action.

The senior judiciary, for its own part, has lost much of the internal coherence that allowed it to emerge as a major independent power centre over the past 15 years. The courts have so far attempted to remain neutral in the PTI’s struggle. But between the sheer range of cases brought by the government and the fractures within the higher courts, it’s likely that the picture will only grow more convoluted and uncertain.

But all of this is in reality a dangerously distracting sideshow that has complicated the much more serious challenge of ensuring Pakistan’s solvency. The International Monetary Fund approved a generous bailout package in 2019, but the disbursal of funds was dependent on implementing a set of largely unpopular economic reforms. The IMF had approved waivers in eight rounds of review, based on promises that the government would get to them later once the political situation had calmed.

Today, not only has the general political situation worsened, but the current government, like the one before it, has increasingly used populist rhetoric to signal rejection of the IMF’s terms. An increasingly distrustful IMF has now indicated that it will no longer extend further waivers during the current round of review, and has, in fact, toughened its review process. This is in full knowledge that if Pakistan fails to complete the review, the lack of IMF funds may lead the country to default on its debt repayments in June, triggering a full-scale economic meltdown.

Pakistan has had some close brushes in the past, but has always been able to leverage its relations with powerful allies – including the US, China and others – to reschedule and write down its debts with only cosmetic reform. But for the first time, Pakistan’s friends, frustrated with the lack of progress in the country’s economic dysfunction, appear to be ready to let things go much further in hopes of breaking the cycle.

But without the funds needed for operational expenses, the armed forces cannot fly planes, move tanks, conduct maintenance or pay and feed serving members. With the Pakistani Taliban resuming attacks (allegedly backed by an increasingly hostile Afghan Taliban) and tensions with India rising, the army simply cannot afford that. It is this risk of bankruptcy and financial isolation that is likely to be the one that, above all, drives the army to directly intervene against the political class as a whole in order to freeze the conflict and pass financial decision-making to the technocrats that have been side-lined.

And perhaps this is what it will take for Mr Khan and those who imitate him to recognise that they need their civilian competitors just as much as their friends and followers in order to survive, let alone thrive. In a winner-takes-all Pakistan, the winner will gain nothing beyond an entirely new level of failure and strife.