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Saturday December 04, 2021

Still grey

October 24, 2021

Pakistan and its people watching the situation should have realised by now that the country is not going to have an easy time moving out of the Financial Action Task Force Grey List. FATF at its latest meeting has extended the period that Pakistan must stay on the list by another four months. But realistically speaking, we all know that this time period may go beyond that date, and the FATF ranking of Pakistan does affect its economy in terms of confidence in the country, investment within it and the willingness of foreign finances to deal with the country or to send money in and out of it. The FATF has acknowledged that Pakistan has carried out 30 of the 34 points the taskforce had dictated. However, the main sticking point is tackling major terrorist figures and their financing. The FATF has said this is the prime agenda that needs to be tackled, with more checks on financing for terrorist leaders who are on the UN blacklist or banned by the organisation.

This is a tough task for Pakistan. It is true that the other countries, mainly India, may have played a part in influencing the FATF. But here Pakistan has to push up its own diplomacy and speak up for itself, while also persuading other countries to do the same. It is possible that main leaders need to be reached out to through discussion. Pakistan needs to determine whether it needs a clean economic slate given its current situation, and the stalemate that appears to have occurred in talks with the IMF, or whether it will continue with its current policies.

Now Pakistan needs to take this even more seriously, and respond appropriately and convincingly. Rhetoric, no matter how strong, is not going to help us in any way. The FATF must also realise that it is a technical forum and any attempts to make it a political platform is tarnishing its image This is especially urgent, given the economic chaos Pakistan currently faces, with the IMF not yet moving ahead with its $6 billion plan for the country, even though Pakistani leaders insist the plan will indeed move ahead. Pakistan also needs to make sure that the progress it makes on the FATF front is irreversible and sustainable so that no unexpected shock pushes the country to a further downgrade on any count. Otherwise, we could face an even longer spell in financial purgatory.