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FATF syndrome

The federal government is still in a defiant and denial mode to address the issues that led to the diplomatic isolation and Financial Action task Force (FATF) decision to put Pakistan back on a watch-list by June this year if it fails to improve its antimony laundering and counter terrorism financing regime. Federal Minister for Interior Minister and planning, Ahsan Iqbal has alleged that the decision of FATF to put Pakistan back on its grey list was taken at the behest of the United States to serve political motives.

The Interior Minister said that grey list sword is now hanging over Pakistan because the country has recently graduated from black to grey and then to white list in few years. He said the European Union has extended Generalized Scheme of Preferences (GSP) plus after admitting that Islamabad took steps to eliminate terror financing through National Action Plan (NAP).

Pakistan was put on FATF watch list in 2012 and removed from it in 2015 after the launching and successful progress of military operation Zarb-e-Azab against the militants’ sanctuaries in the Federally Administered Tribal Areas (FATA) in 2014. The civilian leadership was reluctant till the last minute of the launching of cleanup operation and was holding talks from the position of weakness with the second tier leadership of Tehrik-e-Taliban Pakistan (TTP). As a backlash to this operation, the tragedy of Army Public School Peshawar occurred in December 2014 and the political parties had to agree to the formulation of NAP, reservations of religious political parties, MQM and Chairman Senate Raza Rabani not-withstanding. NAP has not been implemented in totality and its important points numbering 3,4,5,7,9,10, 12, 15, 19 and 20 have been shelved by the government for ever because of political expediency. It includes strict action against militant groups; strengthening National Counterterrorism Authority (NACTA); choking finances for terrorist organization; curbing reemergence of proscribed organization; seminaries reforms; and revamping and reforming the criminal justice system.

The logic of poetical motives of the United States behind the decision of putting Pakistan back on watch-list does not stand the litmus test as its staunch allies Saudi Arabia China also voted in support of this decision. It was in the recent meeting of FATF that China was made the Vice President of this intergovernmental world body. The foreign secretary Tehmina Janjua has held useful discussions with the White House and State Department officials to rescue the fragile alliance between the United States and Pakistan and to move forward towards restoring peace and stability in Afghanistan. In this backdrop, the frontal attack on the country’s ally is not a sagacious move. Such like unwise and deliberate angling may widen the present cleavage in bilateral relations of Pakistan and the United States. The grey areas in the antimony laundering and counter terrorism financing regime need to be cleared to restore the trust of international community.

This time avoiding stinging repudiation of International Monetary Fund (IMF) warning of correcting macroeconomic imbalances, the Interior Minister claimed the government consciously adopted the aggressive path of growth and investment while aware of negative effects, including rising external financing requirements for a few years. He said slow growth can not be allowed because of two million new job entrants. In fact the current economic growth rate below five 5 percent is expenditure led growth and not the income led one. The closure of 120 textile units have made thousand of workers jobless what to speak of generating employment opportunities for the millions of new entrants in the job market. The internal assessment report of Planning Commission reveals that PML-N government has failed to achieve macroeconomic and social targets set in the 11th Five Year Plan. The rising external financing problem is caused by reckless borrowing and widening current account deficit and not by productive investment activities. CPEC is proving a bane not a boom for the local industries. The representatives of the Chambers of Golden Industrial Triangle, comprising Gugrat, Gugranwala and Sialkot had expressed grave concern about the Chinese controlled Special Economic Zones in the country, fearing closure of local industries resulting in massive unemployment and steep fall in productive capacity of the manufacturing sector.  These reservations of the trade bodies were vindicated by Syed Mohyuddin, Chairman State Engineering Corporation (SEC) in his visit to Islamabad Chamber of Commerce and Industry on Tuesday. He urged the entrepreneurs to abandon the second generation technology and adopt the 5th generation technology if they want to succeed in establishing effective joint ventures and partnership in CPEC with their Chinese counterparts.  Pakistan’s economy is in a dire need of another IMF bail-out package, bigger than that of 2013, and Ahsan Iqbal should avoid uncalled for critique of the United States as it controls 70 percent voting rights in the international lending agencies.

 

 

 

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