TF and Pakistan’s economic quagmire
Financial Action Task Force is a global body which aims at combating money laundering and terrorists financing. FATF grey list comprises of the countries which lacks in implementing strategic policies against terrorist financing. Pakistan was also grey listed from 2012 to 2015. But later due to efforts and policies, Pakistan was removed from the grey list.
Unfortunately, this time Pakistan had been nominated by US and three key powers of Europe i-e Germany, France and UK to be grey listed for strategic deficiencies in countering financing terrorism. But in actual this is not the fact, actually in second session of the meeting held in Paris US adopted anti-Pakistan agenda due to which Pakistan was only left by the support of Turkey. China and Saudi Arabia were persuaded by US which left Pakistan alone and was grey listed.
Being grey listed is not good for economy of Pakistan. It would lead to serious negative impacts on Pakistan economy. Firstly, placing Pakistan on FATF’S grey list would effect its banking links with the nation. Banks will face greater strain in their transaction escalating the cost of operations to great disadvantage of customers.
Secondly, FDI would be greatly affected. Foreign direct investment would decrease and foreign companies would hesitate to invest in Pakistan. Thus, it will be indirectly decreasing our exports, employment opportunities would be adversely affected and thus standard of living would be worse than ever. Thirdly, since IMF and World Bank is headed by US government so it would be difficult for Pakistan to get loans from these institutions. And most importantly it would reflect negative image of Pakistan across the world.
Pakistan being economically crippled need to take certain actions and implement policies in order to exit from grey list. Otherwise, if Pakistan fails to implement these policies then it would be black listed which would be even more harsh for our economy.