At the time when the efforts in Pakistan should have been fully focused on fixing its long running economic woes, the growing international scrutiny regarding financing of the militant groups in the country runs risk of complicating the challenges faced by the country.
In an interview with the Financial Times, Finance Minister Asad Umar said the government was just weeks away from clinching a bailout package worth between $6 billion to $12 billion with the International Monetary Fund (IMF).
The deal would effectively ward off possibility of any balance of payment crisis for the cash-strapped country in the near future, smoothen its way to deal with other global financial institutions, and also increase confidence of the international investors to put in their money into Pakistani economy.
However, the recent difficult talks between Pakistani authorities and the global watchdog on terror financing have raised a possibility of risks for country’s financial system that could shake the confidence of the foreign investors.
The country has been struggling for a couple of years to get off the “grey” list of the Paris-based Financial Action Task Force (FATF) that watchdogs the nations which have done nothing or very little to curb terror financing.
But reports emerging from the Asia Pacific Group – an affiliate of the FATF – suggest that Pakistan has still a long way to go in satisfying the international and regional interlocutors about its efforts to prevent financing for the terror groups.
Pakistan has until May to fulfill the criteria set by FATF and the regional group, failing which it runs the risk of being blacklisted.
These risks may not involve immediate financial implications for the country but they could complicate dealing of its financial sector with the international banking system.
The risk comes at a time when the United States has ratcheted up pressure on Pakistan to take action against militant groups particularly Jaish-e-Mohammad, which India blames for the Pulwama attack, though according to the Foreign Office it has failed to produce any substantial evidence linking the group to the attack in which 40 Indian paramilitary soldiers were killed.
The United States with the support of France and some other countries tried to get Masood Azhar, founder of the Jaish, blacklisted through a resolution in the United Nations Security Council.
But the voting on the US resolution was put on hold by China which maintained that it needed more time for its evaluation.
Countering the Chinese stance, the US to went ahead with a fresh move to bypass the UN sanctions committee, which drew strong criticism from Beijing as well as Islamabad.
Ironically, India, which recently faced humiliation after getting a befitting response from Pakistan to its aggression on Azad Kashmir, has stepped up diplomatic efforts to isolate Pakistan.
In order to stave off renewed US-India pressure, Pakistan needs to develop a robust strategy to satisfy the international community about its efforts to curb militancy as well as effectively clamp down on the financial resources for the terror groups.
The government is required to frame the laws aimed at choking financial lifeline for the terror groups.
Pakistan’s permanent representative at the United Nations Dr Maleeha Lodhi has very rightly pointed out that the politicisation of the international counterterrorism regime would compromise the integrity of the regime itself but such moves can only be countered with an effective strategy to curb militant activities and their financial resources.
Robust diplomatic efforts should be launched to lobby the important capitals of the world in support of Pakistan’s efforts to combat terrorism. These efforts are also needed to be supported at home.
Unfortunately, so far, the government has not made any effort to seek support from the parliament as well as opposition in this regard.
Prime Minister Imran Khan seems to be still edgy on meaningfully engaging his opponents on vital national issues.
A firm support from the parliament representing all political parties of the country would send a strong message to the outside world that the entire political leadership firmly stands by the government in its endeavors to ward off any outside pressure.
Observers say authorities need to take the FATF and APG talks seriously as they have the potential of creating problems for Pakistan in securing bailout package from the IMF.
Ironically, the US holds a big sway at the IMF as well as in the FATF and other related institutions.
It was the intense lobbying from the US team at the FATF that resulted in putting Pakistan on the so-called grey list of the countries which failed to effectively curb terror financing.
The US also enjoys a heavy clout at the IMF, being a major contributor to the funds for the global lender.
India too has enjoyed tacit US support in its efforts to pressurise Pakistan.
India’s unreliability could be gauged from the fact that it signed off a joint statement with Pakistan last month agreeing to hold a second round of bilateral talks on Kartarpur corridor tomorrow, but unilaterally postponed the talks at the eleventh hour by raising trivial matters.
Pakistan can ease off such pressures by showing its sincerity to tackle the problem of militancy and its relentless efforts in bringing about peace in Afghanistan which has been acknowledged by the US leaders should be used as a proof for this purpose.
Because of its precarious economic situation, Pakistan can ill-afford any risk for its financial system. Therefore, the rulers need to act prudently and effectively to avert any new dangers and challenges for the economy.
Moreover, the observers believe that the commitments made by the friendly countries in terms of investment and other cooperation would turn into reality only if Islamabad successfully clinches a deal with the IMF as well as the FATF.
Therefore, the upcoming talks with the FATF in Colombo later this month, where Islamabad has to place a compliance report with regard to the steps it has taken to stem funding for the militant groups, are very crucial. These talks would have a direct impact on the final negotiations for the IMF deal.
Any slackness or miscalculation on the part of authorities entails big risks for the country. Therefore, in-depth and thorough deliberations among all stakeholders are vital to evolve a joint and effective strategy to deal with this challenge.
The writer is a senior journalist based in Pakistan