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INSIGHT: Pakistan’s Exit from FATF List and Modi Predicaments

DESPARDES — There’s a bright chance of Pakistan exiting the Financial Action Task Force ‘grey list’ at the FATF plenary on February 16 in Paris, according to some media reports — it dents Delhi expectations that Islamabad was hanging on the abyss and perilously close to being ‘black-listed’ for money laundering and terror financing.

“Quite obviously, it can no longer be kept from public view that the ground beneath the feet of Indian diplomacy has been shifting in recent months, largely due to the US-Pakistan rapprochement”, says former foreign service veteran and ambassador M K Bhadrakumar in his recent analytical article.

Delhi is grudgingly making adjustments to the compelling reality, he sayss.

According to him, “There is a mental block (in Delhi) in acknowledging that Pakistan might indeed have made efforts to improve its FATF standing” and says Delhi thinks the vast improvement in Pakistan’s FATF standing is due to ‘heavy lobbying by China and with the help of a private consultant who is an FATF veteran.’

That may not be the case, the analysis reveals.

According to media reports, the sticking points at FATF have significantly narrowed down to two areas, namely, cash couriers and convictions in terror financing cases.

The sea change in the situation around Pakistan has India’s policy pundits scratching their heads, observes the former Indian envoy who worked at the foreign office for over 29 years.

Once the FATF lets Pakistan off the hook, “which is to be expected, it would signify a big boost to Pakistan’s standing in the fight against terrorism.”

“Delhi, on the other hand, loses the propaganda advantage.”

According to him, Indian officials had thought that the FATF was like a Damocles’s sword hanging on Pakistan’s neck, pointing out that Prime Minister Imran Khan personally took up the matter with US President Donald J Trump at their meeting in Davos.

This cautious optimism, says Bhadrakumar, was also reflected in the meeting in Islamabad between Interior Minister Ijaz Shah and the visiting US delegation led by Alice Wells, acting assistant secretary of state where the latter applauded the progress made by Islamabad.

And, in President Trump’s evaluation, the US has never been as close to Pakistan as it is today.

When all these go for closing, a full-fledged resumption of US aid and investment in the Pakistani economy in the period ahead cannot be ruled out. The US-Taliban talks are also progressing with Pakistan help, the article points out.

Bhardakumar observes that #1: A clearing of the deck seems to be in the works. “The US stance is pragmatic while the Indian stance is dogmatic”.

#2: “India’s position on dialogue with Pakistan is becoming increasingly untenable. Pakistan’s FATF moment highlights the Indian predicament.”

#3: Another untenable position: “Delhi is rejecting third-party mediation in Kashmir, but in the same breath also vows not to bilaterally engage with Pakistan to resolve differences peacefully through dialogue.”

#4: Modi government continues to portray the enemy image of Pakistan as it helps it to derive advantages in domestic politics especially during election time.

May be not. A recent analysis in The Diplomat says Modi government’s brutal approach to India’s domestic affairs has cast a long shadow on Indian diplomacy.

A former Pakistani ambassador who has authored several books including one on India-Pakistan affairs, says India is getting more and more isolated in the world, and Islamabad should launch a diplomatic offensive, expose Modi-led right-wing government’s jingoistic narratives following annexation of Jammu & Kashmir and enactment of contentious laws which aims to transform the world’s largest democracy into a Hindu nation — a view highlighted by The Economist in its cover story ‘Intolerant India‘.

The envoy’s view, The Diplomat report and Bhadrakumar’s observations — all added up together — dampen things for Modi moves going forward.

Fareed Zakaria recently said on his TV show in the US, “India’s domestic troubles are the greatest problems for its foreign policy.”

That “Pakistan is the favorite whipping boy of the ruling elite” (as the former Indian envoy’s analysis observes) may have reached the point of diminishing returns.