EDITORIAL: There’s more than a grain of truth in Finance Minister Shaukat Tarin’s assertion that the Financial Action Task Force’s (FATF’s) decision to retain Pakistan on its so-called grey list was “politically motivated”. Given the circumstances, especially FATF’s own language in the last few reviews — full of praise for Islamabad’s efforts to comply with wide-ranging conditions — this step is no doubt meant largely to keep the country on a tight leash as changing international currents, and its role in them, raise fresh concerns for powerful western countries.
Such, unfortunately, was always going to be the cost of tilting towards China, just when the US was doing everything in its power to contain it. And also of shaking hands with Russian President Putin in Moscow, literally on the eve of the Ukrainian invasion, and the subsequent refusal to condemn it directly or indirectly. All things said, though, the government should have known this.
If any proof was still needed that FATF is indeed politically driven, it came in the shape of the UAE (United Arab Emirates) also landing on the grey-list not long after it decided to abstain from voting in favour of the UN resolution denouncing Russia’s actions. Such things weren’t supposed to happen after Washington midwifed the Abu Dhabi-Tel Aviv accord and ensured a one-page policy on all important matters.
Yet here we are. It’s an accepted fact, after all, that institutions like FATF work as both carrots and sticks for their masters. So, as Islamabad does what it needs to do technically to meet the last two of FATF’s overall 34 conditions, perhaps it wouldn’t be a bad idea to brush up the diplomatic act as well. Two things, at least, are going to be important.
One, why has the foreign minister been absent from the scene at such a sensitive time? What makes personally heading PTI’s charge in Sindh, clearly to counter PPP’s (Pakistan People’s Party’s) long march, more important than his day job? Pakistan is well within its rights to take the position of non-alignment, of course, but such situations require more, not less, diplomatic activity than usual, and the foreign minister is giving the impression that his sense of duty to PTI is greater than that to the country.
And two, it would help if the prime minister didn’t drag these matters into his public rallies; especially when he’s on the roller-coaster of rubbishing the opposition.
Pakistan has taken a very strong, and appreciated, stand by staying neutral. But now it must handle this situation with finesse, not the least because things like FATF hang in the balance. And now that forces unleashed by the Ukraine invasion — high prices and low growth — threaten stagflation across the world, countries like Pakistan should go the extra mile to improve their creditworthiness.
Nevertheless, FATF has again been unfair to Pakistan. Since these are also times of unusual political upheaval in the country, it seems all sorts of forces are aligning to pressure the government. Still, Energy Minister Hammad Azhar, who heads the FATF task force, has assured that Pakistan would be declared clean “soon”. Maybe June is finally when our AML/CFT regime will be cleared.
Pakistan has been on the grey list since 2018, and in that time it has done well enough, yet “soon” it will need better credentials to keep borrowing at not-too-unfavourable rates. But, once again, all sorts of last-minute institutional fine-tuning, even if done just right, could still amount to naught if the diplomacy is not handled properly. This matter has lingered long enough already. Hopefully, the government will leave no stone, local and foreign, unturned in putting it to rest once and for all.
Copyright Business Recorder, 2022
Comments
Comments are closed.