Everyone and Charlie’s aunt is congratulating himself for getting Pakistan off the FATF “grey list”. Hina Rabbani Khar, the state minister for foreign affairs representing the PPP in the PDM government, who led the lobbying team that went to Brussels, has given a pat on the back to “joint efforts” that led to success. Not to be left behind, the PTI has reminded everyone that the legal and organizational hurdles in satisfying the remaining stiff criteria were overcome during the last three years of its regime after Pakistan was bunged back into the grey list in 2018 after the departure of the PMLN government. Now we have the PTI’s Ali Zaidi sharing kudos with Sultan Ali Allana, President of Habib Bank Ltd (an Aga Khan enterprise), who funded a team of experts in finance, law and anti-terrorism operations to do the research and prepare a solid brief for the EU.
Not to be outdone, however, the ISPR has stepped up to praise the untiring efforts of the army chief, Qamar Javed Bajwa, in putting a khaki team to work at GHQ whose job was to coordinate and stitch up the various efforts undertaken by different groups to clinch the matter.
Thus congratulations are in order all round. This was a scary noose dangling over the Pakistani state since 2008 for acts of omission and commission. The consequences of being shunted back to the “black” zone and slapped with a bagful of sanctions would have been disastrous for a country struggling to end international isolation and financial bankruptcy. But a review of the timeline on FATF interventions over the years makes for a revealing perspective.
Pakistan was put into the grey “monitoring” zone in 2008 after the elections put the PPP into office, and off it in 2010 when the Zardari regime passed an anti-money laundering law demonstrating progress in improving its AML/CFT regime. It went back into the grey zone in 2012 for not being fully compliant with FATF requirements. Progress was made in 2015 and Pakistan slipped out of the grey zone during the Nawaz Sharif period when the FATF acknowledged that “the country had established the legal and regulatory framework to meet the commitments in its action plan.”
But in June 2018 when the country was transitioning to a new government after elections in July , the FATF sent Pakistan reeling back into the grey list for failing to act on the export of terrorism from its soil. The FATF’s Asia Pacific Group led by India under Narendra Modi now began to tighten the screws on Pakistan. The “banned outfits”, mainly anti-India, pro Kashmir jihad groups like Jaish-e-Mohammad, Jamaat ul Dawa, Lashkar-e-Taiba, etc., were labelled as “high risk”.
During the PTI regime, the FATF insisted on the implementation of 29 conditions and by October 2020 Pakistan had complied with 21 out of these by a flurry of laws and ordinances involving the FBR, SECP, Customs, etc., and both houses of parliament. Then, in December 2020, Pakistan finally arrested Hafiz Saeed, chief of the Jamaat ul Dawa and self-confessed mastermind of the Mumbai attack in 2008, and put him on trial. This was one of the core outstanding demands of the FATF. Still, there was no reprieve. Two months later, it arrested Zia ur Rahman Lakhvi, a Lashkar-e-Taiba leader involved in the Mumbai attack. In January 2021, the State Bank of Pakistan also amended its rules and regulations to cater to FATF requirements.
It has taken another year to fulfil the last three remaining conditions. The FIA and NAB have got into stride and the banks have started to monitor and restrict transactions by Politically Exposed Persons. After Hafiz Saeed was sentenced to 33 years in jail in April 2022, the FATF finally relented. On June 14th, following a four day plenary session in Berlin, Germany, the FATF acknowledged that Pakistan had complied with all 34 items on its action plan. Now it is sending a team to Islamabad to pat Pakistan on the back, curiously when there is a new government in office towards which the EU and USA are less unfavourably inclined than the outgoing PTI regime despite the fact that the most progress was made in the last two years.
This turn of events would suggest that there is truth in the ISPR claim that the impetus behind pushing the PTI regime to “do more” came from GHQ rather than Imran Khan who is generally anti-India, anti-EU and anti-US. But then, by the same logic, it might reasonably be asked why the same approach to terrorism related issues was not dictated by GHQ from 2008 onwards when there has never been any doubt about who was training and funding the anti-India jihadi organisations helping the Kashmiris resist Indian occupation and repression. Indeed, the Miltablishment’s inflexible approach to India after the exit of General Pervez Mushharf in 2008 – he staked his all on “resolving” Kashmir by means of a historic compromise — to mediating conflict with India was part of the problem for many years until COAS General Qamar Javed Bajwa signalled a shift from “geo-strategy” to “geo-economics” in 2020 and succeeded in paving the way for a calibrated rapprochement with India by cementing a ceasefire along the LoC.
In this context one seminal development may be recalled that has had a profound impact on this narrative. When PM Nawaz Sharif wanted to open channels of rapprochement with Narendra Modi in 2014-2016, he was actively thwarted by the Miltablishment led by COAS Raheel Sharif, DGISI Lt Gen Rizwan Akhtar and PTI leader Imran Khan. Nawaz Sharif paid the price for this. The irony is that when COAS General Bajwa later wanted to focus on geo-economics, Imran Khan was fixated on outdated geo-strategy.
The Miltablishment has just started to fix the seventy year old problem because the free American lunch has gone and we are drowning in debt. It is time to take the painful Mother of all U-Turns. Thankfully, too, the new civilian PDM regime is favourably disposed to focussing on geo-economics as its top priority. But without long term civil-military complementarities to become a constitutional, non-aligned, normal trading state, the project won’t succeed.