Can Trump’s coercive Pakistan policy work?

Can Trump’s coercive Pakistan policy work?


Pakistan used to be on a list of countries that were weak in countering money laundering (AML) and terrorist financing. In February 2015, however, the Financial Action Task Force formally removed the country from its list, declaring it to have “established the legal and regulatory framework to meet its commitments in its action plan regarding the strategic deficiencies FATF had identified.”
The reason for Pakistan’s graduation from the list was simple: since 2010 it has constantly added to its AML and CTF laws and regulations, and has allocated the substantial resources to the central bank to make its financial system better at identifying and restricting terrorist financing and money laundering.
This is why many Pakistanis were surprised to learn that the country will be placed back on the FATF gray list in June this year. Has Pakistan’s financial system suddenly taken a step backwards? Not at all. The real reason for Pakistan’s re-listing by FATF has very little to do with the strength of its financial systems. It has everything to do with Pakistan’s deteriorating relationship with the United States. The tool used by America to drive home its displeasure with Pakistan is an enduring instrument of international relations established in 1999: United Nations Security Council Resolution 1267.
UNSC Resolution 1267 predates the 9/11 attacks, the attack on the USS Cole, and, by almost a decade, the Mumbai attacks in India. Passed unanimously by the Security Council on Oct. 15, 1999, Resolution 1267 was the international community’s response to the dire security and human rights situation in Afghanistan as the Taliban had taken over most of the country, giving refuge and unabashed freedom to Al-Qaeda in the process.
When FATF rewarded Pakistan for its improved financial systems in February 2015, it urged Pakistan to continue strengthening its systems, and explicitly demanded that it fully implement UNSC Resolution 1267.
For most Pakistanis, references to what is known as the Al-Qaeda sanctions list are an affront. Pakistan has killed and captured more Al-Qaeda terrorists than perhaps any country in the world. Pakistani generals and soldiers are not wrong to feel wounded when a resolution meant to fight Al-Qaeda is thrown in their face. Few countries have suffered as much of Al-Qaeda’s wanton appetite for destruction as Pakistan .

The US’s new posture could create further problems by pushing the country further away.

Mosharraf Zaidi

But the Al-Qaeda Sanctions Committee List, which constitutes the operative teeth of UNSC Resolution 1267, is not just a list of Al-Qaeda core operatives. Since 2005, the list has included Lashkar e Tayyaba (LeT), a terrorist group accused of multiple terror attacks against India, and, since 2008, it has included Hafiz Saeed, the founder of LeT. For more than a decade now, Saeed, the LeT and two other UNSC 1267-listed organizations (the Jaish e Muhammad (JeM) and the Haqqani Network) have constituted a trifecta of toxins that are ruining Pakistan’s relationship with the United States.
The US effort to put Pakistan back on the FATF gray list is essentially a shot across the bow. The FATF listing is a demonstration of US resolve to follow through with the threats made by President Donald Trump and his administration, not only through his preferred tool of diplomacy (his Twitter account), but also through US diplomats working on the relationship. 
Pakistan is a growing economy, and a contested and vibrant (albeit compromised) democracy. Its inclusion in the FATF gray list will, for the time being, not trigger an economic apocalypse. But it does signal the capacity of the US to play the international system to squeeze and punish Pakistan. In an election year, with significant fiscal challenges, this kind of vulnerability is a problem.
Given the growing belief in Pakistan that India has influenced recent American policy, Pakistan’s instinct will not be to cave in to the pressure, but instead to resist. For years, Pakistan and the US have managed relations through a careful and intricate negotiation of each other’s interests. The FATF listing represents a material change in circumstances. Six months into President Trump’s aggressive new approach to Pakistan, and America has drawn first blood.
America’s problem is that it doesn’t quite know what the outer limit of its coercive capacity is with Pakistan. China is heavily invested in Pakistani stability and economic growth. Russia’s recent bets in the Arabian Gulf, South Asia and, most importantly, Central Asia, all indicate its growing affinity towards Pakistan. The Arabian Gulf countries themselves, including Iran and Saudi Arabia, also have significant stakes in Pakistan’s stability.
At FATF America was able to overcome those stakes and deliver a stinging rebuke to Pakistan. The ostensible objective of the FATF listing was to pull Pakistan in towards being more acquiescent with US demands. But the new American posture towards Pakistan could just as easily have the opposite effect too — of pushing Pakistan further away. That would be a terrible outcome, not only for Pakistan and the US, but for all the countries that have interests in the region.
— Mosharraf Zaidi is a columnist and policy analyst. He works for the education campaign, Alif Ailaan. He previously worked for Pakistan’s Ministry of Foreign Affairs. 
Twitter: @mosharrafzaidi

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