Turkey itself on the FATF graylist after preventing Pak from being blacklisted earlier. What will now save Islamabad from an economic collapse?

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Turkey has joined Pakistan on the FATF gray list. Ankara had freed Islamabad from its blacklist earlier.

Highlights

  • The Financial Action Task Force (FATF) is an intergovernmental watchdog body to fight money laundering and terrorist financing.
  • Pakistan has been on the FATF gray list since June 2018 and this year Jordan, Mali and Turkey have joined it on the gray list.
  • Pakistan had previously escaped the blacklist because it had the backing of Turkey and its all-time ally, China.

Pakistan has consistently found a way to make room for its friends and allies in the dilemma it finds itself in. The latter dilemma continues to be on the Financial Action Task Force (FATF) gray list. The friend he now has for company is the list and his traditional ally, Turkey.

However, Ankara should have seen this coming because the FATF warned Turkey two years ago. And according to the global terrorism watchdog, although Turkey understood “the risks it faces in terms of money laundering and terrorist financing”, there were “serious loopholes.” The FATF found Turkey involved in providing financial support to terrorist groups, not taking action against money laundering. Turkey has been accused of pushing extremist activity in parts of West Asia on several occasions.

Pakistan was included in the FATF gray list for the first time in 2012. It remained there until 2015. After a brief respite, it returned to the disgraced list on June 29, 2018. At the FATF plenary from 2019, the US, UK and India had pushed for the retention of Islamabad’s gray list. At this point, even China – Pakistan’s all-time ally – had abstained. The only voice of support in Pakistan at that time was Turkey. When countries like India, the United States, the United Kingdom and India called for Pakistan to be blacklisted, longtime friends and allies like China and Turkey managed to save his skin.

The FATF has 39 member countries, and to avoid being blacklisted Pakistan needs the support of at least three countries. Now that Turkey itself is on the gray list, one of Pakistan’s supporters – and one more devotee – has come out. Islamabad is now in serious trouble if it does not meet the FATF’s demands to get off the gray list. In short, he must change his long-standing habit and policy of state-sponsored terrorism.

So what will happen to Pakistan if it continues to be on the gray list? Being on the FATF gray list is not an enviable position. It costs Islamabad about $ 30 million a year. The economically ravaged neighbor is struggling to get financial aid from other countries and international financial institutions like the International Monetary Fund (IMF), the World Bank and the Asian Development Bank (ADB). Then there are the economic sanctions of international institutions and countries that come with registration on the gray list. And for a country like Pakistan which is excessively dependent on international aid, the freeze on foreign money puts it in danger of economic collapse. This is accompanied by an overall reduction in international trade and a boycott by the international community.

And if it doesn’t improve, and soon, Pakistan could end up on a blacklist. And if it is one of the Non-Cooperative Countries or Territories (PTNCs) in the global fight against money laundering and terrorist financing, that means it is subject to tough economic sanctions. Economically, it is the worst that can happen in Islamabad.

Back in Turkey, unsurprisingly, Ankara was bitter about the listing and called it a “political decision”.

IANS reported that Turkish Interior Minister Suleyman Soylu speaking at a press conference, saying: “We all know that this decision is not a just and proper decision, but a political one. It is Europe and the West that finance terrorism and give it strength and direction. We are the ones paying the price and the struggle, but it is Turkey that they blame.

Things have not always been so bleak for Turkey. Ankara has long been resolutely engaged in money laundering and the financing of terrorism. But then, you have to be aware of the business you are keeping. Recently, Turkish President Recep Tayyip ErdoÄŸan has turned to Pakistan and echoed his support for jihadist terrorism. Whether by supporting the Taliban in Afghanistan or by confronting France against secularism.

Unless Ankara wants other problems, she needs to set her priorities well. Pakistan, on the other hand, might need to find new “friends” who can pull it out of the FATF conundrum in March-April 2022, when the terrorism watchdog is expected to have the next session.


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