The political drama has been ripe with surprises. No one could have expected Pakistan to be heading towards early elections. But now, the scenario feels like straight out of a Bollywood movie. In an astonishing bid last Sunday, Qasim Khan Suri, the Deputy Speaker of Pakistan’s National Assembly, declared the impending vote of no-confidence as “unconstitutional.” His decision was preceded by a compelling spiel by Fawad Choudhry, the Information Minister, who parroted Imran Khan’s rhetoric of “an operation for a regime change by a foreign country.”

The New York Times sums up the political quagmire: “Pakistan’s Supreme Court on Thursday overturned Prime Minister Imran Khan’s move to dissolve Parliament, setting the stage for a no-confidence vote widely expected to remove him from office and offering a major victory to opposition leaders, who said that Mr. Khan had attempted an ‘open coup.’ Mr. Khan, the international cricket-star-turned-politician, and his allies dissolved Parliament on Sunday, effectively blocking a no-confidence vote. The move plunged the country into a constitutional crisis and sharply escalated the political instability that has embroiled Pakistan for weeks.”

Amid the mayhem, Imran Khan addressed the public via state TV, reiterating his commitment to a free and independent state. Unlike his incendiary speeches earlier, however, he instead narrated his plan to take the country forward in a democratic fashion. Highly ironic (sorry, I can’t hold that back). He requested that Arif Alvi, Pakistan’s president, dissolve the assemblies and kickstart the formulation process of a caretaker government. Meanwhile, the opposition alliance – led by Shehbaz Sharif – approached the Supreme Court of Pakistan. “This is an urgent matter. The case is fixed for tomorrow [Monday]. Notices [are] issued to all political parties and state functionaries,” stated Chief Justice Umar Ata Bandial.

Now, while the situation unfolds, Pakistan – one of the strategic cornerstones in Asia – is without premier leadership: perhaps indefinitely. Imran Khan no longer enjoys the office while the working Federal Cabinet has been effectively dissolved via a presidential ordinance. Official sources from the Treasury benches claim that national elections would be held within 90 days. However, the matter now awaits a ruling from the Supreme Court before the president formulates a committee to structure an interim regime. This constitutional crisis is also interesting due to the rumors that Imran Khan has lost the support of the army. In a statement on Sunday, the Inter-Services Public Relations (ISPR) – the media wing of the military – stated: “We have nothing to do with what happened today [in the parliament].” However, the statement deftly avoided tagging the move as unconstitutional.

Pakistan is already going through a rough patch in terms of economic instability. The rupee has slumped to a record low. And according to the Pakistan Bureau of Statistics (PBS), foreign exchange reserves held by the central bank have dipped below $11 billion – the lowest since April 2020. The trade deficit recently breached the $35.4 billion mark – more than 70% compared to the previous year – as even the rate hikes haven’t helped curtail the pressure of imports. While some ally nations are rolling over debt payments due this year, the national Forex reserves have still nosedived by 25% in less than two weeks. Therefore, the panic in the financial markets is not entirely due to the premature collapse of the government.

The country is now left with barely enough reserves to finance two months of imports. Almost all traditional options have been exploited: floating sovereign bonds, approaching the International Monetary Fund, or obtaining loans from neighboring countries. According to central bank sources, the finance ministry is now planning to approach a consortium of international commercial banks to borrow $1 billion in cumulative loans. However, in absence of political leadership, the bureaucracy would be unable to negotiate a favorable deal. Higher interest rates would further debilitate the economy in the long run. While the IMF is not reluctant to convene again for talks with an interim government, Pakistan’s justice department bars a caretaker regime from entering any long-term contracts. Hence, without a competent cabinet, Pakistan is surely following in the footsteps of Sri Lanka towards bankruptcy.

In all fairness, the fiscal indiscipline of the PTI regime has led to this fiasco. In March alone, the Khan government offered rebates and subsidies worth over $5 billion – over and above the budgetary costs – a scheme of political point-scoring in the guise of fiscal relief. Now inflation is lingering in double figures, but the country is sailing into a political black hole with a handful of dollar reserves. The ride forward is inevitably painful, but absolute chaos can be avoided. A concrete timeline for national elections could alleviate the pains of uncertainty – a much-needed relief for the financial markets. A successful negotiation with the IMF could still reimburse the depleted Forex reserves. And a conservative fiscal budget alongside a strict monetary policy could still rein redundant expenses and imports respectively. However, a lack of political consensus or a similar disregard for constitutional directives could plunge Pakistan into a vaguely familiar yet vicious cycle of military takeovers and authoritarian rule spanning indefinitely. This time, the economic repercussions would be devastating.