by Dr. Abdul Jalil<\/p>\n\n\n\n
The concurrence of FATF Review and US-Taliban talks might prove to be a thin edge of the wedge for Pakistan as it is a mise en sc\u00e8ne that can have some serious politico-economic ramifications. The next few months are going to be critical. Recently, the Financial Action Task Force (FATF) Plenary assessed the agreed action plan for Pakistan and the findings do not paint an encouraging picture. The Damocles\u2019 sword still hangs over as the non-compliance might bring into equation the dreaded possibility of being blacklisted. Pakistan, apparently, is committed to accomplish FATF action plan but things are not in black and white as the State might like them to be. Owing to the peculiar character of the current state of affairs in the regional political economy, even an outright compliance does not augur well for Pakistan. There might be two very important nuances that must be taken into consideration. Firstly, in case of compliance, Pakistan\u2019s politico-economic relationship with Afghanistan would be compromised. Secondly, the political trust deficit may widen even more between the two countries.<\/p>\n\n\n\n
The\nground is slippery, to say the least, and treading on it may require some\ndiligence. The FATF delegation have expressed concern that a major part of\nbusiness transactions in Pakistan are not well documented. The unchecked\nforeign currency smuggling is also an important issue that incapacitated the\neconomy of Pakistan in more than one way and needs to be revamped in compliance\nwith FATF action plan. The fund-raising activities by the banned organizations\nand political exposed personalities is another thorny issue raised in the FATF\nreport. It goes without saying that Afghanistan is a pivot point of all these\nquandaries.<\/p>\n\n\n\n
Pakistan\ncannot move with a required pace on these issues despite its willingness and\ncapacity. Lets suppose, Pakistan has a strong financial sector and\ninstitutional framework to handle the undocumented business transaction and\ncash smuggling. All relevant institutions may show their muscles to document\nthe transactions. For example, State Bank of Pakistan, Securities and Exchange\nCommission of Pakistan, Federal Board of Revenue, Pakistan Customs, National\nCounter-Terrorism Authority and others may demonstrate coordination, capability\nand capacity for the futures of Pakistan. The problem is that such institutions\nare not well developed in Afghanistan. Therefore, Pakistan cannot fully\ndocument the business transactions at least in the case of Afghanistan despite\nits willingness and intent. The still budding financial institutions of\nAfghanistan may hinder the institutional cooperation and synchronization\nbetween Pakistan and Afghanistan.<\/p>\n\n\n\n
If\nPakistan withholds its supportive bilateral economic cooperation with\nAfghanistan for the sake of compliance with the action plan of FATF, it will\ncreate a trust deficit among the two countries. This trust deficit would have\nan adverse impact on the role of Pakistan in the revival of peace process\nbetween the United State and Taliban. Ultimately, both US and Afghanistan will hold\nPakistan responsible for not keeping their end of the bargain. The other option\nis to help Afghanistan rebuild and develop a resilient financial system as soon\nas possible. However, it\u2019s a long haul.<\/p>\n\n\n\n
The\nother major issue is on the political front. As mentioned earlier that\nfund-raising activities by banned organizations and political exposed\npersonalities is a source of concern in FATF\u2019s report. If Pakistan immediately\nimplements financial intelligence to curtail terrorism financing and takes a\nspeedy action against the exposed political personalities through prosecution,\nassets freezing and other means, it would dispel the fear of FATF but the trust\ndeficit between Pakistan and Afghanistan might widen even more.<\/p>\n\n\n\n
One\noption is that the government of Pakistan may go for a judicial solution. But\nthen, it is an open secret that the judicial system of Pakistan is not\ncompetent to cope with an issue of such significance. .Moreover, the judicial\nsolution might delay the implementation of FATF plan and Pakistan has just four\nmonths to prove that it means business. This might also lead to more than\nrequired judicial interference and further harm the relationship between the\ntwo countries.<\/p>\n\n\n\n
Hence,\nPakistan is at the horn of a dilemma at the moment. It\u2019s a catch 22 as the\nsolution of one problem aggravates the other. It has to come clean before the\nFATF but Afghanistan might be a casualty in this battle. On the other hand, if\nit appeases Afghanistan and works to be in the good books of the US, it might\nget access to the coveted Asian markets but being in the blacklist of FATF\nwould hamper it to reap the benefit of this move. It is very important for\nPakistan to have a proactive diplomacy to renegotiate the points of action plan\nwith FATF which are directly related with politico-economic relations with\nAfghanistan and the US. It\u2019s a bumpy ride and caution is the word.<\/p>\n","protected":false},"excerpt":{"rendered":"
by Dr. Abdul Jalil The concurrence of FATF Review and US-Taliban talks might prove to be a thin edge of the wedge for Pakistan as it is a mise en sc\u00e8ne that can have some serious politico-economic ramifications. The next few months are going to be critical. Recently, the Financial Action Task Force (FATF) Plenary […]<\/p>\n","protected":false},"author":2,"featured_media":156,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1,7],"tags":[45,48,15,49,47],"yoast_head":"\n