The Pulse | Economy | South Asia

Can a Negative Decision at the FATF Bolster Hardliners in Pakistan?

Being blacklisted at the FATF could set back real progress in Pakistan.

Umair Jamal
Can a Negative Decision at the FATF Bolster Hardliners in Pakistan?
Credit: CC0 image via Pixabay

Later this week, the Financial Action Task Force (FATF) is set to release its findings concerning Pakistan’s case at the forum. Early reports from the ongoing meeting in Paris suggest that the country may evade blacklisting by the forum. However, it’s still expected that Islamabad will come under a lot of pressure as the majority of the recommendations by the FATF have only been implemented partially.

The case’s outcome will have significant implications not only for Pakistan, but also for the region. A critical outcome may prove to be a blow to the country’s moderate voices within the national security establishment and civilian elite that are working to push against the hardliner’s support base within various institutions.

From Islamabad’s perspective, the worst outcome would emerge in the form of the country being placed on the blacklist, which can virtually choke Pakistan’s struggling economy in the coming months. Policymakers in Islamabad believe that they have done enough in the time given to the country and that moving forward, there is a strategy in place to work on the remaining recommendations. Predictably, Pakistan is expecting an appreciation for the country’s compliance with the FATF’s recommendations and other efforts to contain terror financing and militant groups.

Temporarily, the country’s government has been able to contain groups whose politics are tied to the issue of Kashmir. However, it’s unclear what happens in the coming months if Pakistan’s case gets knocked down at the forum. It’s important to note that the current government in Pakistan is trying to implement the FATF’s plan at a time when religious hardliners in the country have everything to gain from what’s happening in the neighborhood, particularly in Jammu and Kashmir.

Over the last year, Pakistan has taken verifiable actions against militant groups, including the Lashkar-e-Taiba (Let) and implemented tough laws to curtail terror financing. All of this has not been verifiable in the past. Moreover, the emerging narrative within Pakistan’s policymaking circles is one that focuses on discouraging and delegitimizing the so-called Afghan or Kashmir focused jihadi groups and their politics. Prime Minister Imran Khan’s recent statements that anyone trying to enter Jammu and Kashmir will be an enemy of Pakistan and Kashmiris are unprecedented and point toward the change that the world has demanded from Islamabad over the last couple of decades.

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Moreover, it is unprecedented that there has not been a single major street protest calling for jihad in the wake of New Delhi’s decision to abrogate Article 370/35A of the Indian constitution – a decision that put Khan in a very tough position domestically. Arguably, even if Pakistan is taking all these actions due to the looming pressure from the FATF, it’s something that is encouraging and shows that such pressure can produce sustainable results.

In the context of these developments, the international community invested in seeing a nuclear Pakistan becoming a democratic and politically stable state, should ensure that Islamabad stays away from the blacklist. The acknowledgment of the country’s efforts will assist in undermining hardliners among the ruling elite and the extremist groups that want to go back to its previous policy of using militants as a tool of foreign policy.

The prospect of Pakistan’s blacklisting may end up reviving far-right religious groups that have called for the revival of the state’s jihad Policy in the region, particularly in Kashmir.

Moreover, such an outcome may force Islamabad to go back to its old policy of keeping the low-intensity conflict alive as any efforts otherwise won’t entail favorable outcomes. Additionally, a negative outcome may also lead to domestic political instability. An announced protest by a religious group later this month is expected to target the government and its support base in different institutions over its Kashmir policy and an adverse FATF decision will only provide additional fodder.

Pakistan’s compliance so far may not be enough to get Islamabad off the FATF grey list but can certainly pave a way for such an effect in the coming months. The international community needs to build stakes for Islamabad in the process and give space to the country’s ruling elite to take the current policy forward.