Pakistan retained on FATF grey list and is now joined by an ally
Ever since the US-led NATO forces bowed out of Afghanistan, new multilateral groupings have emerged to contain China’s strategic ambitions, the re-emergence of the Taliban and other allied threats. If the Quad aims to keep a hawk eye on the Indo-Pacific, the ‘Other Quad’ will police West Asia. And terror financing, threatening to destabilise the ‘global order’ from its Asiatic fringes, has got the attention of the Financial Action Task Force.
What’s surprising about the FATF’s latest ‘Grey List’ is not the presence of the usual suspects, but the new names, most prominently Turkey and Jordan, among those seen as potentially subversive to the global financial system. Pakistan has shown improvement on a large number of parameters that put it on the FATF watchlist in the first place. But since crackdowns against commissioners of terror and conclusive prosecution remain a substantially unfulfilled task, it stays where it was, on the list with 22 others.
The inclusion of a big name like Turkey, Islamabad’s friend and ally, and a NATO member at that, will stir a hornet’s nest, seeing as how non-compliance with FATF standards implies financial linkages to the Islamic State and Al Qaeda, besides a role in WMD proliferation. A country doesn’t have to be blacklisted, an honourable mention in the Grey List suffices to sour its ties with the global banking sector, financial institutions and foreign investors.
The effects are plain to see on Pakistan’s already nebulous economy. Will Ankara face the brunt now? The Turkish lira has spiralled further downward against the dollar, foreign ownership of bonds has slid to 5% from 25%, foreign investors are fleeing. In the process, Erdogan’s policies have undone one of his key achievements, economic growth and middle-class prosperity. But as often seen, economic pressure that’s ultimately felt by the masses does not always persuade the ruling strongmen to mend their ways. Erdogan likes to write his own destiny, and as for Imran Khan, poll-bound in a while, destiny being ghostwritten is the national custom.