Morality is not a set of absolute values written in stone. Thresholds of what is acceptable, unacceptable and downright horrible in human society has undergone repeated changes throughout history.

The same scenario is what our nation has experienced since the opening of the Panama case in Pakistan. Interestingly, the single appearance of Prime Minister Nawaz Sharif before the Joint Investigation Team JIT not only cost Pakistan in terms of political instability but also affected economic and financial economy.

The market has fallen by 9 percent since the summon was issued by the JIT and obeyed by the Prime Minister. Besides this, Pakistan equities have witnessed one of their largest corrections. For instance, the KSE-100 Index has decreased by 15% from its peak level of 52, 876 points.

Over the past 12 years, Pakistan’s capital market has experienced downturns of 10% or greater on 12 occasions. Excluding the infamous crashes of 2008 (47% fall) and 2005 derivatives/badla crisis (36%), on an average the market recovered in around 6 weeks after bottoming out.

The highest fall since the 2008 crash was seen in early 2015 when the index fell 17% due to foreign selling. Contrary to expectations, during the public protest in Pakistan’s capital by the PTI political party which lasted during Aug-Dec’14, at the worst, the market declined 9%.

According to Securities analysts, since the recent fall is likely due to uncertainty surrounding the JIT probe against the Prime Minister’s family, it is highly unlikely that the market will recover in line with past trends when there was no political and economic uncertainty.

Similarly, some of the participants are cautious that while the incumbent government may be caught up in all the court proceedings and investigations, their focus towards economic & policy matters may lax, which may in turn impact the business climate. Thus, it is a key cause of concern lingering in the back of investors minds’ and leading to this sharp selloff in the financial and real estate markets.

Furthermore, continuation of uncertainty would potentially result in possible deterioration of macros given the already weak external account situation. Unfavourable external account data has also been raising concern on the Pak Rupee. This is because of sharp rise in current account deficit (CAD) which has widened to $8.9 billion in the period of July 2016 to May 2017 as compared to $3.2 billion deficit recorded during the same period of the last fiscal year, FY16.

Contrary to the negative impact on the macroeconomic outlook, sector and company outlook has also suffered as policy inaction potentially results in delay or the suspension of additional investment plans, which then negatively impacts earnings growth estimates. Apart from developments concerning proceedings of the Panama case in the SC until its final verdict, news flows impacted foreign direct investment which surged by 22.6%YoY to $2.03 billion during 11MFY17, with China taking the top spot. Textile and clothing exports declined by 1.98% to $11.23 billion for 11MFY17. Reportedly, the Ministry of Industries and Production has allowed KIA-Lucky Motors Pakistan Ltd, Nishat Group and United Motors Pvt Ltd to setup plants for assembling of vehicles under incentives afforded to Greenfield investments with the three committing to total outlay of $372 million, reported AKD Securities.

Despite the pullback witnessed in the last days of the week, the political cloud of Panama proceedings accompanied with heavy political monsoon showers continue to permeate investor sentiment. Consequently, the next trading week ahead is expected to be a pit stop, with no major moves expected.

As far as CPEC is concerned, the strategic project is neither the brain child of the ruling family nor will it be affected by the prime minister’s resignation. It is a well-known fact that the initial sketch of the project was prepared by China with DG ISI General (r) Ihsanullah Haq during the Musharraf era. It was the Musharraf government that started work on the Gwadar Port, without which CPEC would be impossible. Then it was Asif Ali Zardari who entrusted the contract of the Gwadar Port to China and signed an MOU on CPEC. Beijing’s ties with Islamabad are historical and strategic, and subject to no individual, family or political party. China has no role or interests in the domestic politics of Pakistan, and treats Pakistan as a friend irrespective of who is in power. Unfortunately, Nawaz Sharif tried to personalise these strategic ties and branded CPEC as a special favour to his government. This resulted in opposition and nationalist parties criticising the Chinese government.

To conclude, the establishment aims at political, economic and financial stability for the overall growth of our economy and to channelize the multiple investment projects being fuelled in recent history, in line with international lobbyist (leftist) viewpoints. Thus, the SC verdict against Nawaz Sharif has deep rooted causes. Simply put, his regime and political philosophy was not in accordance with the establishment’s. Moreover, CPEC is considerably a defense strategy rather than an economic one.

Last night, my friend Syed Intezar Hussain Zinjani, an astrologer, came to meet me up and gave the prediction that Pakistan’s political climate is going to remain unstable till January 2020. It got me thinking. What if Mian Shahbaz Sharif became the next Prime Minister, what if Imran Khan came into power, what if Tahir ul Qadri opened up a joint investigation team on the Baqar Naqvi report, what if Pakistan experienced a military coup once again? Every such proposition could emerge as Panama leaks has proven, there are invisible unseen powers by whom we are surrounded.

The writer is a Master Trainer/Advisor at the Pakistan Industrial Technical Assistance Centre Lahore, under the Federal Ministry of Industries and Production, Islamabad.