<p>Pakistan’s continued support from its military and political leadership for terrorists — recruited internationally, sheltered and trained on its soil — has become well known. Field Marshal Munir, Pakistan’s Chief of Army Staff, once again raised the Kashmir issue, just two months after Operation Sindoor. Speaking at the Pakistan Naval Academy’s passing-out parade on June 28, he reaffirmed support for what he termed the “legitimate struggle” of the Kashmiri people. He described the April Pahalgam shooting as Kashmiris’ freedom struggle, despite knowing it was carried out by cross-border terrorists from Pakistan. Obviously, his remarks were emboldened by public praise from US President Donald Trump during a lunch hosted in recognition of Munir’s efforts to halt Operation Sindoor.</p>.<p class="bodytext">At the political level, India last week refused to sign a joint statement at the Shanghai Cooperation Organisation (SCO) Defence Ministers’ meeting over the issue of terrorism. Defence Minister Rajnath Singh objected to attempts by China and Pakistan to drop references to the Pahalgam shooting. Further, reports indicate that Pakistan is covertly rebuilding terrorist infrastructure using sophisticated technology.</p>.<p class="bodytext">On May 9, the International Monetary Fund (IMF) held its monthly board meeting and made two decisions regarding financial assistance to Pakistan. During the board debate, India raised objections, saying that Pakistan has been diverting loan funds to support cross-border terrorist activities. As IMF procedures do not allow for a formal ‘no’ vote, India abstained. With no other country objecting, the IMF decided in favour <br />of Pakistan. A total of $2.4 billion was made available (as the second tranche of the bailout loan last September and through a new loan). </p>.<p class="bodytext">Pakistan ranks fifth among the top 10 most indebted IMF member countries. As of May 19, its outstanding credit is $6.86 billion. The May 9 loan marked the 25th instance of IMF assistance to Pakistan, aimed at settling old debt burdens (principal and interest). Pakistan has failed to implement the required reforms, and IMF funds have largely been wasted. On the other hand, India has not been <br />a debtor to the IMF since 2001, having cleared its obligations from the two loans taken in 1991 and 1993 to avert a financial crisis.</p>.<p class="bodytext">The world now recognises that the cross-border shootings, which killed 26 tourists, were instigated by Pakistan. Such acts of terrorism are often overlooked by advanced member countries, whose responses are guided by self-interest, trade and military relationships. As a result, terrorist-related activities are frequently met with silence.</p>.<p class="bodytext">In this context, the Financial Action Task Force (FATF), though not a United Nations organisation, does a great service. Established in 1989 by the G7 nations, FATF sets international standards for combating financial crimes, including money laundering and terrorist financing, by identifying such countries. </p>.<p class="bodytext">While the FATF lacks the legal authority to prohibit any UN member state from receiving funds from international institutions, it wields considerable influence in delaying loan approvals. <br />It is known for its regular and thorough verification of <br />evidence in annual plenary sessions and specially designated committees. </p>.<p class="bodytext">The FATF maintains two lists: a blacklist for countries that fail to comply with international standards, and a grey list for those under heightened scrutiny. Pakistan has been placed on the grey list three times and subsequently removed (during February 2008–2012, February 2015–2017 and October 2019–2022).</p>.<p class="bodytext">With limited options available, India has turned to the FATF. On May 23, it submitted documents related to the April 22 Pahalgam incident, urging the re-inclusion of Pakistan on the grey list for violations of terrorist financing regulations. The FATF is expected to consider India’s plea during its upcoming plenary session in October.</p>.<p class="bodytext">On June 16, 2025, the FATF released a report summarising the findings of a year-long study titled ‘Strengthening Efforts to Combat Terrorist Financing’. With specific reference to the Pahalgam attack, the report stated: “Terrorist attacks kill, maim and inspire fear around the world. The FATF notes with grave concern and condemns the brutal terrorist attack in Pahalgam on April 22, 2025. This, and other recent attacks, could not occur without money and the means to move funds between terrorist supporters.”</p>.<p class="bodytext">At the end of their July 1–2 meeting, the foreign ministers of the four-nation maritime group known as Quad (comprising Australia, Japan, India and the United States), which is committed to a free, secure and Indo-Pacific region, issued a joint statement. Among other points, they condemned the Pahalgam shootings. Apparently, they left the task of naming the perpetrator to the FATF, which has got the dossier on Pakistan’s involvement.</p>.<p class="bodytext"><span class="italic">(The writer is former senior economist, Asian Development Bank)</span></p>
<p>Pakistan’s continued support from its military and political leadership for terrorists — recruited internationally, sheltered and trained on its soil — has become well known. Field Marshal Munir, Pakistan’s Chief of Army Staff, once again raised the Kashmir issue, just two months after Operation Sindoor. Speaking at the Pakistan Naval Academy’s passing-out parade on June 28, he reaffirmed support for what he termed the “legitimate struggle” of the Kashmiri people. He described the April Pahalgam shooting as Kashmiris’ freedom struggle, despite knowing it was carried out by cross-border terrorists from Pakistan. Obviously, his remarks were emboldened by public praise from US President Donald Trump during a lunch hosted in recognition of Munir’s efforts to halt Operation Sindoor.</p>.<p class="bodytext">At the political level, India last week refused to sign a joint statement at the Shanghai Cooperation Organisation (SCO) Defence Ministers’ meeting over the issue of terrorism. Defence Minister Rajnath Singh objected to attempts by China and Pakistan to drop references to the Pahalgam shooting. Further, reports indicate that Pakistan is covertly rebuilding terrorist infrastructure using sophisticated technology.</p>.<p class="bodytext">On May 9, the International Monetary Fund (IMF) held its monthly board meeting and made two decisions regarding financial assistance to Pakistan. During the board debate, India raised objections, saying that Pakistan has been diverting loan funds to support cross-border terrorist activities. As IMF procedures do not allow for a formal ‘no’ vote, India abstained. With no other country objecting, the IMF decided in favour <br />of Pakistan. A total of $2.4 billion was made available (as the second tranche of the bailout loan last September and through a new loan). </p>.<p class="bodytext">Pakistan ranks fifth among the top 10 most indebted IMF member countries. As of May 19, its outstanding credit is $6.86 billion. The May 9 loan marked the 25th instance of IMF assistance to Pakistan, aimed at settling old debt burdens (principal and interest). Pakistan has failed to implement the required reforms, and IMF funds have largely been wasted. On the other hand, India has not been <br />a debtor to the IMF since 2001, having cleared its obligations from the two loans taken in 1991 and 1993 to avert a financial crisis.</p>.<p class="bodytext">The world now recognises that the cross-border shootings, which killed 26 tourists, were instigated by Pakistan. Such acts of terrorism are often overlooked by advanced member countries, whose responses are guided by self-interest, trade and military relationships. As a result, terrorist-related activities are frequently met with silence.</p>.<p class="bodytext">In this context, the Financial Action Task Force (FATF), though not a United Nations organisation, does a great service. Established in 1989 by the G7 nations, FATF sets international standards for combating financial crimes, including money laundering and terrorist financing, by identifying such countries. </p>.<p class="bodytext">While the FATF lacks the legal authority to prohibit any UN member state from receiving funds from international institutions, it wields considerable influence in delaying loan approvals. <br />It is known for its regular and thorough verification of <br />evidence in annual plenary sessions and specially designated committees. </p>.<p class="bodytext">The FATF maintains two lists: a blacklist for countries that fail to comply with international standards, and a grey list for those under heightened scrutiny. Pakistan has been placed on the grey list three times and subsequently removed (during February 2008–2012, February 2015–2017 and October 2019–2022).</p>.<p class="bodytext">With limited options available, India has turned to the FATF. On May 23, it submitted documents related to the April 22 Pahalgam incident, urging the re-inclusion of Pakistan on the grey list for violations of terrorist financing regulations. The FATF is expected to consider India’s plea during its upcoming plenary session in October.</p>.<p class="bodytext">On June 16, 2025, the FATF released a report summarising the findings of a year-long study titled ‘Strengthening Efforts to Combat Terrorist Financing’. With specific reference to the Pahalgam attack, the report stated: “Terrorist attacks kill, maim and inspire fear around the world. The FATF notes with grave concern and condemns the brutal terrorist attack in Pahalgam on April 22, 2025. This, and other recent attacks, could not occur without money and the means to move funds between terrorist supporters.”</p>.<p class="bodytext">At the end of their July 1–2 meeting, the foreign ministers of the four-nation maritime group known as Quad (comprising Australia, Japan, India and the United States), which is committed to a free, secure and Indo-Pacific region, issued a joint statement. Among other points, they condemned the Pahalgam shootings. Apparently, they left the task of naming the perpetrator to the FATF, which has got the dossier on Pakistan’s involvement.</p>.<p class="bodytext"><span class="italic">(The writer is former senior economist, Asian Development Bank)</span></p>
