New Delhi: The Financial Action Task Force (FATF) in its latest meeting in Paris has decided to put Pakistan on a “grey list” for not taking adequate action against proscribed terrorist entities and individuals.
The motion, brought forth by the United States, was supported by countries like UK, France, and India. The FATF voted 36 to 1 to grey list Pakistan.
The only country that voted in favour of Pakistan was Turkey. Not even traditional friends and allies like China and Turkey voted in favour of Pakistan.
This will make it difficult for international financial institutions and banks to do business in Pakistan. Conversely, it will also make it difficult for Pakistani businesses to raise money overseas.
Pakistan will also find it hard to service its debt obligations. Pakistan has about 300 billion dollars of sovereign debt which it needs to service by the end of June, failing which it could be in for a sovereign ratings downgrade by international rating agencies like S& P Moody’s and Fitch.
Domestically, opposition parties the Pakistan Tehreek-e-Insaf (PTI) and Pakistan Peoples Party (PPP) are expected to use this development to attack the ruling PML(N)and its failure to convince the international body. It could also have a negative effect on the PML (N) in the upcoming general elections.
There was a report on Friday that China, Saudi Arabia and Turkey, three close allies of Pakistan, have joined hands to block a move by the Trump administration to place Islamabad on an international terror-financing watch list.
While Pakistan has claimed a victory of sorts, the US was working behind the scenes during the ongoing Paris meeting of the Financial Action Task Force (FATF) to take action against the country which it believes has not acted against terrorist financing and the implementation of the UN Security Council resolutions.
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