Anxiety grips Afghan financial market as Pakistan faces terror listing

In this file photo, Afghan men wait to withdraw money from the Kabul Bank in Kabul. Afghanistan’s Chamber of Commerce warned traders and business community this week from dealing with Pakistan currency fearing the placing of Pakistan on FATF’s gray list. (SHAH MARAI/AFP)
Updated 13 June 2018
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Anxiety grips Afghan financial market as Pakistan faces terror listing

  • Afghan traders and money-changers using Iranian currency are struggling with the fallout of US sanctions on the Islamic Republic
  • In about a dozen provinces, Afghans rely on rupees for their daily transactions, despite government moves to ban the use of foreign currency in routine transactions

KABUL: Afghanistan’s traders fear the expected placing of Pakistan on a global terrorist financing watchlist could seriously affect bilateral trade, which is mostly conducted in Pakistani currency.
The traders are already facing financial losses from the recent re-imposition of US sanctions on neighboring Iran.
The US and its European allies recently co-sponsored a motion calling for nuclear-armed Pakistan to be placed on a gray list of nations deemed to be doing too little to comply with anti-terrorist financing and anti-money laundering regulations under Financial Action Task Force (FATF).
The motion is expected to be enforced this month.
Afghan traders and money-changers, conducting transactions in Iranian currency, are already reeling from the fallout of US sanctions on the Islamic Republic. 
Afghanistan’s Chamber of Commerce fears the placing of Pakistan on FATF’s gray list will have an even more devastating effect on the country’s foreign-reliant economy.
“In general, our concern is that sanctions on Iran and the inclusion of Pakistan on the gray list without doubt will damage trade and transaction,” Khan Jan Alokozai, deputy head of Chamber of Commerce and Industries, told Arab News on Wednesday.
“We are worried about it, about its effect on our trade,” he said.
Afghanistan’s exports to Pakistan, one of the country’s main trading partners, is conducted in Pakistani rupees, he said.
In about a dozen of the provinces, Afghans normally conduct their daily transactions in the markets by rupee, despite repeated government moves to ban the use of foreign currency in routine transactions.
Alokozai said his organization has not formally suggested that traders avoid stocking rupees or halt the currency’s use in daily business.
 Afghan money traders fear for their business if Pakistan falls on FATF’s gray list again. However, they continue to trade in rupees.
“We are aware of this, but people extensively use rupee like before. We do not know of any government announcement or policy in this regard,” Hajji Farooq, a money dealer in Kabul, told Arab News.
The inclusion of Pakistan in the gray list is part of a broader US strategy to pressure the country to cut its alleged links with militants fighting in Afghanistan.
Pakistan denies any links and has shrugged off a US aid suspension worth $2 billion. But inclusion on the FATF watchlist could inflict real damage, bankers and government officials say.
Islamabad has sought to head off the motion by amending its anti-terrorism laws and by taking over organizations controlled by Hafiz Saeed, who is blamed by Washington for the 2008 Mumbai attacks that killed 166 people.
Pakistan’s $300 billion economy is expanding at its fastest rate in a decade at above 5 percent, but could lose steam if the country is placed on the FATF watchlist.


Pakistan's leading political party faces jolt

Updated 24 June 2018
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Pakistan's leading political party faces jolt

  • Former PM Nawaz Sharif may not be able to spearhead PML-N's election campaign
  • The three-time premier is a crowd-puller and could help the beleaguered PML-N, but only “if he returns to Pakistan and leads the election campaign,” political analyst Tahir Malik told Arab News on Sunday

ISLAMABAD: The electoral success of the Pakistan Muslim League-Nawaz (PML-N) hangs in the balance as its most charismatic leader, former Prime Minister Nawaz Sharif, is outside the country and may not lead his party’s campaign ahead of the July 25 polls, analysts say.
“If Sharif doesn’t return from London to Pakistan by next week, his party may face huge losses in the upcoming elections,” political analyst Tahir Malik told Arab News on Sunday.
The three-time premier is a crowd-puller and could help the beleaguered PML-N, but only “if he returns to Pakistan and leads the election campaign,” Malik said.
Sharif is in London visiting his wife Begum Kalsoom Nawaz, who has been on a ventilator since June 14 and has been undergoing treatment for throat cancer since August 2017.
“Do you think it is appropriate for me to return to Pakistan when Begum Kalsoom is fighting for life?” Sharif asked on Saturday.
He said he had planned a four-day trip to London, but is now unsure about returning to Pakistan due to her health. Sharif and his daughter Maryam Nawaz have been in the UK since June 15.
“The Sharif family is passing through a difficult time, and the situation could adversely impact their party’s electoral prospects,” Malik said.
An accountability court hearing three separate corruption references against Sharif, Nawaz and others is scheduled to conclude the trial by July 9, as per the Supreme Court’s instructions.
In July 2017, the Supreme Court disqualified Sharif from holding the prime minister’s office, and directed the National Accountability Bureau (NAB) to file corruption references against him and his family members.
“Even after being disqualified from holding any public office, Sharif still enjoys public support,” political analyst Rasul Bukhsh Rais told Arab News.
But if the accountability court convicts Sharif in the graft cases before the elections, this would demoralize his party and PML-N voters, Rais said.
His younger brother, who has become the party’s president after Sharif’s disqualification, “may not be able to run an effective election campaign,” Rais added.
Sen. Mushahidullah Khan, the PML-N’s information secretary, said Sharif and his daughter will return to Pakistan to lead the party’s election campaign once his wife’s health improves.
“Our detractors will be disappointed. The PML-N will win a clear majority in the elections under the leadership of Nawaz Sharif,” Khan told Arab News.