Pakistan announces action plan to get off FATF grey list within a year, says Miftah Ismail

Dr. Miftah Ismail. (REUTERS)
Updated 13 April 2018

Pakistan announces action plan to get off FATF grey list within a year, says Miftah Ismail

  • He says the steps they take will address the concerns of the international community
  • Rules out seeking financial assistance from IMF to bridge the current-account deficit

KARACHI: In an attempt to allay the concerns of Financial Action Task Force (FATF), Pakistan has stated that it will have an action plan ready by June this year. The country hopes that as a result it will be off the organization’s grey list within a year.
In an exclusive interview with Arab News, Dr. Miftah Ismail, the adviser to the prime minister on finance, said that the plan would be formulated and executed within three months to allay the concerns of the international community.
“Yesterday, I talked to the representative of FATF and assured him that we would make an action plan,” he said. “By implementing that action plan, Pakistan will be off the grey list within a year.”
The FATF was established in July 1989 by a Group of Seven summit in Paris. Its objectives are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.
Pakistan is due to be added to the FATF grey list in June, despite the country’s attempts to reassure the international community.
“During our meetings with the representatives of FATF, Pakistan presented its point of view, but western countries, particularly the United States, were not ready to listen to us,” said Ismail.
A recently announced tax-amnesty scheme had added to FATF concerns about Pakistan, but Ismail said this was being addressed.
“They simply wanted us to give them assurance in writing that we were not violating anti-money laundering laws,” he said. “We have given them assurance in writing that the amnesty scheme is not for criminal offenses, but for tax evasion.”
Ismail said that the addition of Pakistan to the grey list of would only increase the accounting requirements.
The country is facing a burgeoning current-account deficit that has risen to $10.4 billion, mainly due to increased imports and a fall in exports.
However, he said the government saw no need to seek financial assistance from the International Monetary Fund, given the recent devaluation of the rupee and signs that exports were starting to rise again.
Ismail ruled out a further devaluation of currency, after the already-completed 10 percent depreciation, saying the market has positively responded to the government’s move.
“People were expecting a 10 percent devaluation of the Pak rupee, which was achieved without increasing the rate of inflation in the country,” he said.
“We feel that there is no need for further devaluation.
“We have twice devalued our currency and our exports increased by 24 percent in March. We think that we are moving on the right path to reduce the current-account deficit. Obviously, remittances are also increasing.”

In addition, he ruled out the possibility of floating bonds/Sukuk on the international market during the current fiscal year.

“If we are elected and form the next government, we will go to the international market in November or December to raise funds,” he said, without giving any further details.
However, Ismail did not rule out the possibility of asking friendly countries for deficit financing, though he added that no such move was under discussion at present.
“We can go to any country,” he said. “For example, if we want to go to Saudi Arabia we will ask them for oil-export credit but no present talks are going on about this.”
Regarding the shifts in economic policy since the departure of former finance minister Ishaq Dar in November 2017, he said the only change was the devaluation of the currency.
“I did what I deemed best in the interests of Pakistan,” he added.
Ismail also addressed the frequent power outages in the port city of Karachi, despite the government’s claim of adding nearly 10,000 megawatts of electricity to the national grid.
“The load shedding in Karachi is the result of a tussle between the Sui Southern Gas Company and K-Electric,” he said.
He added that the government was “trying to resolve the issue as soon as possible.”
Looking ahead to the budget that will be presented on April 27, Ismail confirmed that the duty imposed to discourage imports of finished goods will remain, though it would be abolished for intermediate goods.
“This budget will be appreciated by all political parties,” he said. “The next government can make small changes to it, but 90 percent of the budget will be the one we have at present.”


Boko Haram kill 19 Nigeria herders in clashes

Updated 4 min 42 sec ago

Boko Haram kill 19 Nigeria herders in clashes

  • The fighting sparked outside Fuhe village, close to the border with Cameroon
  • The herders tried to repel an earlier attack by the militia and killed one of them
KANO, Nigeria: Boko Haram militants gunned down 19 cattle herders Saturday in northeast Nigeria, civilian militia sources and residents told AFP on Sunday.
Ethnic Fulani herders, besieged by a spate of armed attacks targeting their cattle, pursued Boko Haram, sparking a fierce gunfight outside Fuhe village, near Ngala close to the border with Cameroon.
“The insurgents killed 19 of the herdsmen in the fight,” a militia leader Umar Kachalla told AFP.
Bodies of the slain herders were brought to the police by militiamen, Kachalla said.
The herders had earlier repelled an attack by Boko Haram fighters who invaded the village to steal livestock, killing one of the militants, Mada said.
The herders then decided to pursue the militia and fight them “once and for all,” Mada said, but were overwhelmed.
“The herdsmen were subdued by the better armed Boko Haram gunmen,” he said.
Militants then returned to Fuhe village and burnt homes and food supplies while herds fled, according to Ngala resident Abubakar Yusuf, who saw the dead bodies at the police station.
Boko Haram has increasingly targeted farmers, herders and loggers, accusing them of spying and passing information to the military and the local militia fighting them.
They have also been raiding herding communities, seizing cattle — a valuable commodity in the region — to fund their operations.
Boko Haram and rival Islamic State West Africa Province (ISWAP) are known to operate in areas around Ngala and the neighboring town of Gamboru.
ISWAP has focused on targeting military installations and troops since 2018 while Boko Haram faction is notorious for indiscriminate attacks on civilians.
However, ISWAP has been blamed for a recent increase in attacks on civilians.
In August 2014 Boko Haram seized Ngala and Gamboru, a trading hub, but Nigerian troops retook both towns in September 2015 with the help of the Chadian military.
Despite the recapture of the area, militants continue to launch sporadic attacks, ambushing troops and vehicles, as well as attacking and abducting farmers.
In November last year Boko Haram abducted around 50 loggers at Bulakesa village outside Gamboru.
The decade-long conflict has killed 35,000 people and displaced around two million from their homes.
The violence has spread to neighboring Niger, Chad and Cameroon, prompting the formation of a regional military coalition to fight the militants.