India's diplomatic efforts against cross-border terror bearing fruit

For the Indian government, the past week has been one in which it can claim some success in terms of foreign policy, especially with regard to the need for addressing terrorist threats to national security. In the joint statement that emerged from the meeting of Prime Minister Narendra Modi and his Canadian counterpart, Justin Trudeau, for example, terrorism was a highlight. The statement said the meeting “reaffirmed the breadth and scope of Canada-India relations, based on the fundamental principle of respect for sovereignty, unity and territorial integrity of the two countries”, a not-so-subtle nod to concerns that Canada harbours on its soil those who are a little too sympathetic to the Khalistan movement, which has long been rendered irrelevant in Punjab. The statement included India’s preferred wording on terrorism, including the crucial clause that “no country should allow its territory to be used for terrorist and violent extremist activities”, a reference to Pakistan. Work on a bilateral framework on countering violent extremism was announced, as was an institutionalised dialogue between the national security advisors of the two countries. Peace and reconciliation in Afghanistan also found a mention, alongside the “dismantling of infrastructure of support to terrorism from across borders of Afghanistan”.

Another piece of news from the plenary meeting in Paris of the international Financial Action Task Force, or FATF, too, is encouraging. The FATF, originally founded in 1989 to deal with cross-border co-operation to counter money laundering, now also deals with addressing the misuse of the international financial system to fund terrorist operations. One big topic of discussion in Paris last week was whether Pakistan was doing enough in this respect. Although Pakistan was not mentioned in the FATF’s official statement at the close of the meeting, which listed countries with strategic deficiencies posing a risk to the international financial system — currently Ethiopia, Yemen, Iraq, Syria, Serbia, Sri Lanka, Trinidad & Tobago, Vanuatu, and Tunisia — it has been reported that Islamabad, in co-operation with the FATF, will have to finalise an action plan by June to counter deficiencies in its financial system with respect to the financing of terrorism. If this is not completed, then Pakistan will be put on a watch list by the FATF. This will significantly increase regulatory scrutiny of Pakistan-related transactions and increase transaction costs for the external sector in that country.
 

An increase in costs and in the risk profile of Pakistan-related transactions will impose significant economic pain, and raise incentives to fix terror financing within the Pakistani system. Initial reports indicate that while Islamabad’s usual backers in Beijing and Riyadh initially supported it, this support petered out when a second and unscheduled vote was called by the US. However, even though the move has been led by the US, Indian diplomatic efforts need to be credited for their sustained pressure on leading countries to act on terror. Prime Minister Narendra Modi has not spared a single opportunity to underscore the unequivocal message that the world needs to stop distinguishing between good terror and bad terror. The timing of India’s diplomatic offensive could not have been better as the US, under the Trump Administration, has progressively demanded greater accountability from Pakistan for its actions, or lack of them, against the spread of terror. New Delhi, however, must follow up this opportunity smartly and ensure that Beijing and Riyadh do not abandon their current position come June.