Pakistan’s economic recovery to be hit by continued FATF grey listing

The Financial Action Task Force, a Paris-based global anti-terror watchdog, has retained Pakistan on its Grey List, also known as the Enhanced Monitoring List, and asked the country to do more "to investigate and prosecute" senior leaders and commanders from the UN-designated terror groups

Oct 22, 2021
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Pakistan’s economic recovery to be hit by continued FATF grey listing

The Financial Action Task Force, a Paris-based global anti-terror watchdog, has retained Pakistan on its Grey List, also known as the Enhanced Monitoring List, and asked the country to do more "to investigate and prosecute" senior leaders and commanders from the UN-designated terror groups. The continued Grey Lististing will most certainly hit the country’s economic recovery. 

Pakistan was added to the FATF’s Grey List in 2018 and given a 27-point action plan for strengthening measures against money laundering and terror financing. Of which, it had complied with 26 measures completely. Later, the terror watchdog has given 7 additional points to improve the deficiency in the newly enacted legislation. 

Of the total 34 points, Islamabad has completed actions on 30 points. 

"Pakistan has taken a number of important steps but needs to further demonstrate that investigations and prosecutions are being pursued against the senior leadership of UN-designated terror groups," FATF President Marcus Pleyer said on Thursday during a virtual press conference. 

The body also praised the progress, saying there was a clear commitment from the country. “There is no discussion on blacklisting Pakistan and the FATF urges the country to address the remaining four items,” Player said. 

Pakistan’s inability to get out of the grey list has been hurting its economy now for more than three years. The remaining requirement--with respect to prosecuting and investigating terrorist leaders and senior commanders-- will be the toughest one to implement. 

The Inter Service Intelligence (ISI), Pakistan’s intelligence agency, has for years been using regional terrorist groups as a tool to pursue its foreign policy goals. Many of the senior leaders and commanders listed on the UN terrorist list share close and intimate relations with the country’s spy agency. 

Actions against them will hurt the delicate balance that the spy agency has maintained for years so that these groups don’t target the state itself. Earlier, during the time of former president Pervez Musharraf, many radical and terror groups turned against Pakistan when the army started cracking down on them. 

Michael Kugelman, deputy head of Asia Program in the US-based Wilson Center, and an expert on South Asia, said the implementation of remaining measures will be the toughest part so far. 

The country’s economic indicators are not going as well. The current account deficit has been growing for the last five months, with an ever-increasing trade imbalance that will be unaffordable very soon. Already the government has started introducing measures to cut imports. 

Warning about the dire economic consequences, Kurran Hussain, a senior business journalist, wrote in an editorial in Dawn, “It would be a terrible mistake for the prime minister and his acolytes to underestimate the strength of the wave that is about to hit them in the months that come. Being prepared will be critical to survival.

(SAM)