Pakistan ruling partner in U-turn on move to opposition

THE second-largest member of Pakistan’s ruling coalition reversed its decision to join the opposition yesterday, averting the potential collapse of the government in this nuclear-armed nation.

The move by the Muttahida Qaumi Movement, announced after Prime Minister Raza Yousuf Gilani backed down on unpopular economic measures, restored the government’s parliamentary majority and eased the political crisis facing Pakistan.

But the government’s concessions could prevent it from receiving billions of dollars in international loans, exacerbating the country’s already precarious financial position.

That possibility poses a major concern to the United States, which is wary of instability in Pakistan and is reliant on the country for help in battling Taliban and al-Qaida militants in the region.

The MQM’s decision to rejoin the coalition came a day after Gilani said the government would reverse unpopular fuel price hikes that partly prompted the party’s defection. He also said yesterday during a visit to MQM headquarters in Karachi that the government would postpone a new tax system meant to raise more revenue.

“Our unity will benefit both the country and the national interest,” said Gilani, while standing next to senior MQM leader Raza Haroon.

“We can steer the country out of this storm.”

Haroon said the MQM agreed to rejoin the coalition for the sake of democracy and the country’s well-being. The party quit the coalition last Sunday, citing anger over the government’s decision to increase fuel prices up to 9% on New Year’s Eve and its failure to combat corruption. But some analysts have said the MQM was likely motivated by self-interest and may have defected to force concessions that would increase its power in its main stronghold of Karachi. It is unclear if the government has agreed to anything.

The MQM may have also taken up the mantle of populist anger over unpopular economic measures to improve its performance in the next set of parliamentary elections, which are scheduled for 2013 but could be called earlier.

Even though the MQM rejoined the coalition, Haroon said it would hold off on reinstalling its ministers in the Cabinet, possibly to retain some leverage over the ruling Pakistan People’s Party.

The move to reduce fuel prices and hold off on tax reform will deepen the country’s deficit, which could lead the International Monetary Fund to withhold billions of dollars in loans desperately needed to stabilise the economy.

US Secretary of State Hillary Clinton also criticised the fuel decision, calling it “a mistake to reverse the progress that was being made to provide a stronger economic base for Pakistan”.