close
Thursday December 02, 2021

No easy exit?

June 30, 2021

Pakistan’s continued presence on the ‘grey list’ of a global watchdog against dirty money, must be a powerful reminder of the challenges faced by Islamabad as it tackles multiple issues, notably strategic ones.

The Paris-based FATF has set a fresh two-year timeline for Pakistan to curb loopholes surrounding money laundering.

The FATF’s decision may appear politically motivated as nuclear-armed Pakistan prepares for a bumpy road ahead in its ties with Afghanistan, India and possibly the US after Washington’s troop withdrawal from Afghanistan. The ongoing advance by the Taliban in Afghanistan has once again reinforced Islamabad’s reputation as a spoiler in Western capitals.

On Monday, news of India’s deployment of about 50,000 troops on its Chinese border clearly suggested continuing high temperature between the two Asian neighbours following their clash just last year. A simmering conflict up in the Himalayas carries the risk of drawing in Pakistan if conditions ever sharply slide downwards.

While these are all compelling arguments to suspect the FATF’s latest outcome for being politically motivated, that alone doesn’t end Pakistan’s challenges. In its latest assessment, the FATF acknowledged progress made by Pakistan on 26 of the 27 points that it was given. But progress on getting off the grey list depends on the one sticky point – a failure to investigate and prosecute Pakistan-based senior leaders and commanders on the UN designated terrorist groups. The FATF has also pointed towards the continuing risk of money laundering in turn fuelling corruption and organized crime.

Aside from the motivations by foreign players, Pakistan must recognize the gaps in its own financial arrangements that continue to undermine its own domestic frameworks. The widespread incidence of chronic tax evasion across Pakistan is no secret.

Notwithstanding Finance Minister Shaukat Tarin’s recent promise to hunt down tax evaders, the reality is that the list of some of the worst offenders on this score begins from proprietors of the fancy stores across Islamabad’s Blue area – just a couple of kilometers from the finance ministry and parliament – and extends to far flung areas of Pakistan. And across Pakistan’s ruling structure – the government and the opposition parties together must force their members to come clean on their tax records.

The matter of tax evasion across Pakistan cannot be tackled in isolation from the powerful reality of a long-term breakdown in law enforcement. Though high-profile cases are known to have been quickly investigated and prosecuted, that alone has not made a difference to the matter of making Pakistan a more law-abiding country.

In part, the breakdown has its roots in the ill perceived devolution of authority across districts under the government of Pervez Musharraf. On the face of it, the experiment seems to have failed. In sharp contrast to the days when government officials across Pakistan’s districts were armed with administrative and judicial authority and took closer charge of daily life, today’s Pakistan is left with partially defanged authorities. Meanwhile, a clumsy politicization of administrative and policing structures at the grassroots of Pakistan has weakened the writ of the state and strengthened non-state actors, often armed with malicious intent.

As the government ponders over the steps ahead to satisfy the FATF, it must closely look at solving Pakistan’s internal riddle to make a difference. As the authorities search for answers tied to external players seeking to raise the pressure on Pakistan, it must also look at internal drivers and make comprehensive changes wherever necessary.

A part of the requisite change will require seeking consensus among diverse political players including the opposition, for Prime Minister Imran Khan and his team to press ahead and undo precedents like the devolution exercise. Such a framework for cooperation among politicians will also be essential to carve out a new road to the future, seeking aggressive action in areas like curbing tax evasion.

And finally, there is just no room for complacency at a time when Pakistan must prepare to meet widening challenges on its external and internal front. Hammad Azhar eagerly announced after the latest verdict that there is ‘no danger’ of the country landing in the ‘Black list’ of the Paris watchdog. That is sheer complacency of the kind best avoided till the country safely emerges from this continuing challenge.

The writer is an Islamabad-based journalist who writes on political and economic affairs.

Email: farhanbokhari@gmail.com