Pak may seek US intervention against tough conditions of FATF, IMF

Cash-strapped Pakistan may seek the intervention of the US for relief from the tough conditions of the FATF and the IMF in lieu of its its services for the peaceful exit of American troops from Afghanistan, according to a media report.

Prime Minister Imran Khan is likely to persuade the Trump administration for relief from the FATF and the IMF during his meeting with US President Donald Trump on the sidelines of the United Nations General Assembly session in New York this month.

The anti-money laundering watchdog Financial Action Task Force (FATF) last year placed Pakistan on the grey list of countries whose domestic laws are considered weak to tackle the challenges of money laundering and terrorism financing.

The Paris-based body warned Islamabad to meet its commitment by October or face action, which could possibly lead to the country getting blacklisted.

According to reports, Pakistan fared poorly at the final review of the FATF held in Bangkok ahead of the plenary meeting in October.

"The FATF is going to meet in Paris somewhere in next month of October where it will decide Pakistan's fate. The same month, the IMF will also initiate review of first quarter of Pakistan's output under USD 6 billion programme loan, a Cabinet member told The News.

One of the economic ministers told the daily that Pakistan subscribed the toughest ever IMF loan programme without negotiations and now the economic managers had started feeling the heat of tough conditions.

The government is facing a huge revenue shortfall and it will be left with no option but to come up with a mini-budget with more taxation on the direction of the IMF. The government does not want to impose more taxes (on the masses) and this could only be done if the US plays its role in getting relief from the IMF, the daily said.

"Pakistan wants relaxation in the position of the FATF and the IMF against its services for peaceful exit of US troops from Afghanistan, the minister said.

Though President Donald Trump has cancelled talks with the Taliban following a car bomb attack in Kabul that killed an American soldier and 11 others, the US administration "still hopes that Pakistan is in a position to influence the Taliban for peaceful exist of US troops from Afghanistan", the minister, who was not identified by the report, said.

A top official privy to the development on front of FATF told the Pakistani daily that the country is left with no option but to launch a diplomatic offensive to win support of Saudi Arabia, China, Turkey and Malaysia ensuring the FATF's decision in its favour.

"While initiating diplomatic efforts, Pakistan should also keep India out that wants to place Pakistan in the black list. Under this scenario, the importance of US has increased and Pakistan will during prime minister's visit to US will persuade Trump administration for relief from the FATF and IMF," the daily reported.

There is a slowdown in economic activities in Pakistan in the wake of tough IMF programme, the government has witnessed a huge surge of 8.9 per cent in the budget deficit in the last fiscal year ended on June 30, 2019.

Inflation has entered double digit and because of high interest rate, economic activities have almost come to a standstill. Unemployment is on the rise. Under this scenario, Pakistan wants the US help to dilute IMF conditions, as the US has 15 per cent voting rights in the IMF board.

If the US takes the decision in favour of Pakistan, then the EU and Japan will follow it. The US, the EU and Japan have 51 per cent voting rights in the IMF board, the report said.