Pakistan isn’t out of the woods yet. But, much like British Rail, it’s getting there. At least this was the upshot of this month’s FATF (Financial Action
Task Force) review. The latter has concluded that, overall, the country is in compliance with 31 out of 40 recommendations on anti-money laundering and terror financing. That some 22 of these were met in just two years is no small feat. It now seems inconceivable that Pakistan will keep Iran and North Korea on the dreaded black list.
The bad news is that the grey list ranking still holds, though Foreign Minister Shah Mahmood Qureshi is confident that this will not be the case for long. Indeed, the situation is not as dire as when Pakistan was first placed there in 2018. Back then, there were very real concerns about how this would negatively impact the country’s debt ranking as well as its ability to borrow from global lending institutions and tap into international bond markets; thereby precipitating a possible economic meltdown. Since then, it seems the storm has been weathered somewhat. For better or for worse, Pakistan secured a $6-billon IMF bailout package in 2019. Though there are still some tough negotiations to be had on this front as the review process continues. Already, there is some contention at the Centre, with Fiancé Minster Shaukat Tareen refusing to play the IMF ball on raising electricity prices further.
However, in light of this latest FATF update, the government should be in a stronger position. Not least because this evaluation dates back to October 2020 and the third report submitted by Pakistan in February of this year is yet to be assessed. Thus, it is expected that more progress will have been made. For the time being, the country will move from enhanced (expedited) to enhanced follow-ups.
Where Pakistan has to tread carefully is on the anti-terror financing front. Especially with the US exiting neighbouring Afghanistan as early as next month. If, as largely predicted, civil war ensures across the western front — this country will be bear the brunt. Washington itself has begun talking about a potent and resurgent ISIS and Al Qaeda in Afghanistan. India will likely seize this opportunity to lobby for Pakistan to be declared a terrorist state, while ignoring genuine talks on Kashmir. Indeed, there has long been talk of an Kabul-Delhi nexus that throws cash at Pakistani militant groups that are afforded safe-haven in Afghanistan even after proscription by Islamabad. The recent banning of the TLP (Tehreek-e-Labbaik) should also be noted as proof that Islamabad does not wish to jeopardise economic ties with the EU, its largest trading partner.
It is hoped that Pakistan will soon be able to see the wood. And not just the trees. *
Source: https://dailytimes.com.pk/767903/fatf-review/
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