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coronavirus
Coronavirus
VERY HIGH
Source: covid.gov.pk
Pakistan Deaths
29,097
2024hr
Pakistan Cases
1,367,605
7,58624hr
Sindh
523,774
Punjab
462,323
Balochistan
33,910
Islamabad
117,436
KPK
184,455

The League of Nations was the first worldwide intergovernmental organisation whose principal mission was to maintain the global peace. It was founded by the victors of the World War-I in 1919 after the war. It ceased operations in 1946. The onset of the World War-II in 1939 showed that the League was a big failure because it remained inactive until its abolition. The United Nations (UN), structured by the big four victors of World War-II, replaced the League in 1946 and inherited several agencies and organisations founded by the latter. The four positioned themselves as permanent members of the UN Security Council - each vested with veto power. It now increasingly appears that the UN as a world body for peace and its influence to dispense even handed justice to all its members, big or small, too, is going to meet the same fate.

One cannot ignore the helplessness of the UN in the Balkan wars where ruthless massacre of civilians went on unchecked for years even though the UN troops had boots on ground. The same holds true for a long-drawn-out Iraq-Iran war, post 9/11 interventions by the mighty nations in the Middle East, the war in Yemen, the UN resolution on Kashmir in the cold storage for over 70 years.

In subsequent years, many more world regulators, structured by the developed economies of the west, emerged on the global scene. One such entity is the Financial Action Task Force (FATF) on Money Laundering. In response to mounting concern over money laundering, the FATF was established by a G-7 Summit that was held in Paris in 1989. Recognising the existence of a threat to the banking system and financial institutions, the G-7 heads of state or government and the President of the European Commission constituted the Task Force from the G-7 member States, the European Commission and eight other countries. From 1991 to the present time, FATF expanded its membership from the original 16 to its current 39 members.

One can argue whether FAFT is truly a representative world organisation or more of an extended arm of elite nations out to monitor and enforce fiscal discipline in emerging markets through a carrot and stick approach. North Korea and Iran are in its ‘black list’ while many emerging markets are in ‘grey list’. The earlier disclosure of Wikileaks and a recent disclosure of the Panama Papers identified many European nations, the UK, the USA and Japan having on their soil safe tax havens to facilitate parking of illicit money. Unfortunately, however, none of these developed countries has ever been questioned or censured by FATF.

Pakistan has been on the FATF ‘grey list’ since June 2018. It was provided with a list of 28 items to comply with. As to date it has complied with 27 items. Last week, FATF, for the third time, announced that Pakistan has made good progress but will continue to remain on the watchdog’s “increased monitoring list (grey list), till it addresses the single remaining item on the original action plan agreed to in June 2018 as well as all items on a parallel action plan handed out by the watchdog’s regional partner – the Asia Pacific Group (APG) – in 2019”.

APG in its disclosure last week expressed serious reservations over “insufficient physical actions on ground” against proscribed organisations (POs) to block flow of funds and activities and is likely to issue a formal warning before its departure. The two decisions grouped together clearly indicate that Pakistan is not likely to move out of ‘grey list’ anytime soon. Its scorecard of 27 out of 28 is meaningless so long it is on the ‘grey list’.

(The writer is a former President, Overseas Investors Chambers of Commerce and Industry)

Copyright Business Recorder, 2021

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