FATF future

  • IMF mission also not unhappy about revenue


Federal Economic Affairs Minister Hammad Azhar has described a Financial Action Task Force (FATF) future which does not bode well for the country, and which indicates that the PTI government has failed to deliver on its economic promises. While testifying to the National Assembly Standing Committee on Finance on Thursday, he said that the Asia-Pacific Group had decided on a new Mutual Evaluation Report, which would keep Pakistan on the FATF grey list. The APG would put Pakistan on its own Action Plan, which Mr Azhar described as easier to implement. The FATF President, Xiangmin Liu, wants Pakistan to ‘do more’ to implement anti-terror financing measures. FATF’s 27-point Action Plan will be assessed in October 2020, but if the APG has its way, there will be a new action plan then, which will take one to three years, if its recommendations are not implemented. That would keep Pakistan on the grey list until 2023, which effectively means for the next four years, or this government’s remaining tenure.

That would mean that the PTI government would end up failing to achieve one of its most important economic goals, getting Pakistan off the FATF grey list, where it has been since April 2018. The other goal, that of an agreement with the IMF was something that it had initially resisted, but had finally opted for, with much criticism that the country had wasted much valuable time because of that resistance. Coinciding with Mr Azhar’s testimony was the visit by an IMF team to review Pakistan’s performance under the deal. While it indicated that another tranche would be allowed under the three-year package, bringing the total disbursed to $1.44 billion, it also was asked by Pakistan to delink FATF from the package. One of the IMF conditionalities that Pakistan indeed do more, and get off the FATF grey list.

It appears that Pakistan is to be squeezed by financial means into doing Western bidding on terrorism, through the mechanism of financing. It would be appropriate for Pakistan at this point to evaluate whether these are merely great powers throwing their weight around, and whether militant outfits serve any useful national purpose. If defying the world and getting blacklisted by the FATF is the price, then it had better be worth it.