Bringing it back into the global mainstream

Foreign Direct Investment had almost come to a naught, devastating the economy of this country
Representational Image
Representational ImageFile/GK

Due to its commitment to give shelter and finance dreaded terrorists on its soil, Pakistan was infamously isolated from the rest of the world, thereby suffering a whooping losses of Rs three lakh crores.

But the decision of Financial Action Task Force (FATF) to take it out of Grey List may prevent  it from going Sri Lanka way as it will start getting assistance from different nations and bodies like International Monetary Fund (IMF), Asian Development Bank(ADB) etc.

China and its allies like Turkey, Singapore etc., quietly worked to take its friend, Pakistan, out of Grey list but America’s changed role did make a lot of difference as it wants to wean away Pakistan from the clutches of China. 

Pakistan had urged US two years back to help it in the exit from Grey list and a recent weeklong visit by army chief Qamar Bajwa prepared the ground; though nothing was officially divulged by both sides. On the one hand, US President Joe Biden called Pakistan a most dangerous state but simultaneously it provided the F16 package which also speaks about the dual policy of America.

Keeping in view America’s influence in FATF, Pakistan had urged the then US president Donald Trump  in January, 2020 to come to its rescue and end its woes due to retention in the Grey List which destroyed its economy and image in the world.

Over $28 billion losses

Pakistan has been placed in Grey list thrice from 2008, and FATF decided to remove it from the list after four years. Pakistan officials claim that due to this Pakistan lost 10 billion dollars every year. This loss in Indian rupees is about 75 thousand crores annually.

Future impact

Pakistan’s removal from Grey List will act as a big morale booster to its sagging economy besides giving fillip to its imports, exports, remittances and limit to access to international loans. Second, de-listing may improve its image to some extent as it will be still on the radar of several nations including India and America in view of its track record about love for Jihadis.

Third, Pakistan faces the worst economic crisis of its history, hence desperately needs financial assistance from international organisations like IMF, ADB etc. which may save it from being bracketed with Sri Lanka.

Fourth, Pak prime minister, Shebaz Sharif is elated over this decision of FATF, taking credit as it will politically benefit his government especially in view of the onslaught from former prime minister, Imran Khan who is countering the claims of present government. Fifth, foreign direct investment had almost come to naught except China after it was branded as terror funding nation by FATF.

The exit from grey List will encourage investors and 206 members of the global network and observers including IMF, United Nations and World Bank were part of the decision which will send positive signal to the world at large.

Experts say that investors from different countries may not be scared of Pakistan’s reputation after clean chit given by FATF as terror related tension may be eased which minimises the risk of doing the business. Pak’s economy is under dire straits and global ratings agency Fitch had cut the country’s sovereign rankings and Moody had also demoted its ratings which is dangerous for the economic survival of this country. Shehbaz’s government may get a handle to ensure economic survival.

India’s stand

But India is still skeptical about the sincere adherence to keep itself off its addiction of terror funding though it will be in in the global interest if Islamabad continues to take credible, verifiable, irreversible and sustained action against terrorism and terrorist financing emanating from territories under its control. India strongly feels that as a result of FATF scrutiny, Pakistan has been forced to take some action against well-known terrorists, including those involved in attacks against the entire international community in Mumbai on 26/11.

Pakistan had made vain attempts to camouflage and misguide the FATF about steps taken in the past to punish UN designated terrorists and extremists who continued to indulge in innocent killings of citizens in Kashmir valley. While four years on the so-called grey list have forced Pakistan to scale down cross-border terror, the freedom of JeM chief Masood Azhar shows that its security establishment is yet to pull the plug definitively on terror as a means of inflicting harm on India.  India’s interest lies in playing the game on a long term basis in these diplomatic battles thereby adopting a well calculated strategy of  making the region more stable and secure for regional players.

Pakistan needs to convince FATF members

Keeping in view the track record of Pakistan in giving shelter and financial support to extremists, majority of the 39 FATF members may keep vigil on its fulfilment of the commitment, not to encourage terrorists from its soil; though China and its allies always supported it and worked hard to take it out of Grey List.

Pakistan government has definitely scaled down cross border terror but freedom of JeM chief Masood Azhar indicates that it is half heartedly taking measures to control terror funding. New Dehli has been trying to move proposals at the UNSC for designation of some persons as as global terrorists but China indulged in manipulations to nullify India’s efforts.

(K S TOMAR is political analyst and senior journalist)

DISCLAIMER: The views and opinions expressed in this article are the personal opinions of the author.

The facts, analysis, assumptions and perspective appearing in the article do not reflect the views of GK.

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