Pakistan’s sentencing of wanted terrorist chief Hafiz Saeed last Friday was one of economic necessity. The country is riding the shockwaves of a chaotic political transition and teetering dangerously close to a credit default after the recent ousting of former Prime Minister Imran Khan.
As in the past, investors predict an IMF bailout is the most likely exit ramp to its downward spiral.
Pakistan is on the Financial Action Task Force’s (FATF) grey list for terrorism financing, which throws an awkward spanner in the works, potentially threatening its access to the global credit it needs most. The listing has reportedly already cost the country $38 billion and its financial reserve coffers are now almost empty. Fortunately for Islamabad, there is a chance to get off the list when the FATF reviews Pakistan’s status again in June.
Given its dire economic straits, it is little wonder Islamabad’s Anti-Terrorism Court threw the book at Saeed, the founder of Lashkar-e-Taiba (LeT) and alleged mastermind of the 2008 Mumbai terror attacks. His sentencing, along with Islamabad’s recent tough talk on the Taliban, is meant to signal to international institutions the country is making a break with its checkered past.
Yet there is ample evidence to suggest otherwise. State-backed terrorism has a pattern of reemerging in Pakistan and the military’s deep ties with extremist groups have survived crackdowns before. Far-reaching reform and strong control over the military will be needed if Pakistan’s new civilian government is to have a chance of rooting out the problem once and for all. The FATF should sustain regulatory pressure to ensure it does so.
This is not the first time Saeed has faced the bench – he has been in and out of the courts for quite a while.
Saeed’s latest sentencing found him guilty in two cases of terrorism financing, with a combined 31 years of prison time. This comes in addition to a 15-year sentence for analogous crimes in 2020. Given his multiple sentences will run concurrently, the total time Saeed is in for remains unclear but the 71-year-old may not need to spend many more years behind bars, according to lawyers familiar with the details of the case.
If the new sentences are merely symbolic then, it raises questions as to what the country’s Anti-Terrorism Court is trying to achieve through the rulings. Pakistan’s courts may simply be trying to make up for lost time.
Despite being designated a terrorist by the U.N., EU, and half-a-dozen countries in the 2000s, Saeed was neither charged nor extradited over nearly two decades. He was merely detained on a few occasions for several months at a time, sometimes confined to his home.
When Washington put up a $10 million reward for Saeed’s arrest in 2012, Islamabad did not sweep in either. News of the bounty triggered thousands of protesters to hit the streets across Pakistan, burning American flags and chanting their support for Saeed. Islamabad judged it best to wait and watch.
While Saeed damaged Pakistan’s international image, he brought perceived benefits on another front. In Kashmir, his organization was strategically expedient to the Pakistani military in gaining an asymmetric advantage against conventionally superior Indian forces.
The Pakistani Directorate for Inter-Services Intelligence (ISI) first co-opted the group as a proxy in its formative years in the 1990s. There is also ample evidence that the LeT carried out the Mumbai attacks in 2008 with the consent and support of at least some members of the Pakistani intelligence agency.
Besides the Mumbai terror attack, LeT also staged the 2001 attack on India’s Parliament House and the 2016 attack on Indian military headquarters in Uri.
LeT’s maximalist agenda that promoted the fight in Kashmir as a global jihad aligned, for a time, with hawkish factions in the Pakistani establishment desperate to wrest control of India’s portion of the region away from New Delhi.
It was not until early 2018, when the Trump White House threatened to suspend military aid and allies China and Saudi Arabia withdrew their support for Pakistan at the FATF, that Islamabad shifted gears and started to rein in Saeed.
President Mamnoon Hussain amended the country’s Anti-Terrorism Act to place Jamaat-ud-Dawa (JuD), the LeT’s charity front, on the country’s banned organizations list and seized its assets. The delayed crackdown came ten whole years after JuD had been declared a terrorist front group by the U.N. Security Council in 2008.
Saeed’s arrest in 2019 (this time leading to his first sentencing), was on the eve of a visit by Khan to Washington. Unaware Saeed was not in hiding and was highly visible in Pakistani public life, a jubilant Trump at the time tweeted “Great pressure has been exerted (on Pakistan) over the last two years to find him!”
Just as that arrest was timed for diplomatic opportunism, this second sentencing now aims at economic realism.
Prime Minister Shehbaz Sharif has inherited an economic mess. Inflation is spiraling higher than 12 percent, Pakistan’s trade deficit heading to a record $45 billion, and the remaining forex reserves are being spent on food and energy imports. Without a bailout, Islamabad is fast approaching a fiscal cliff.
A recent editorial by Dawn, a newspaper started by Pakistan’s founder Ali Jinnah that remains the voice of the country’s political mainstream today, described Saeed’s sentencing as a “somber reminder of the state’s erstwhile policy of embracing militant groups” and hoped “the establishment has learned its lesson and will never again encourage jihadi actors.”
Yet Pakistan tends to regress on anti-terror commitments and its recent actions suggest it remains selective about enforcement. Entering into tougher economic times (often peak seasons for terrorist recruiting), Islamabad will need to maintain zero tolerance.
Upholding the integrity of global standards on anti-terror financing remains vitally important in steering Pakistan further down the path of reform. Sustained pressure from the FATF will send a clear signal to its new administration that the international community will not compromise on the issue going forward.