FATF and the Future: Pakistan at a Crossroads of Reform and Reputation

Pakistan’s recent close call with being placed on the Financial Action Task Force’s grey list was
no accident. It was the result of shrewd diplomacy, strategic maneuvering, and a diplomatic but
determined domestic re-forging of how the state behaves on the world stage. To most analysts,
the action was a shock, even an improbability, for a country that has had a rocky history
handling international standards of counterterrorism. But in its wake, it is apparent that
Islamabad is acquiring the new vocabulary of power.
This was not the product of a single ministry or single smooth diplomat. It was a cross-
pollination of several vectors rather: an international-facing campaign against terrorism, a fresh
compliance approach, and most importantly, the establishment of tactical relationships in
major power capitals. What had long been a foreign policy stuck in between Washington and
Beijing now has elements of innovative diversification.
The Chinese vote within FATF deliberations was to be expected; it has been sustaining Pakistan
for years as a strategic ally. But Japan’s behind-the-scenes lobbying and Turkey’s vocal
championing are symptoms of a larger change. They are not ideological friends. They are
pragmatic players who concluded that Pakistan had served long enough to warrant a diplomatic
indulgence. Their lobbying is a sign of a willingness in international diplomacy to diverge from
scripted playbooks—especially ones penned during India’s protracted campaign against
Pakistan’s international comeback.
India’s version—based on sustaining threats of terror and historical evidence—is analytically
accurate but strategically fixed. It has legitimate concerns but not exaggerated ones, and its
tendency to discuss Pakistan in only the terms of what it does to us is no longer persuasive.
With geoeconomic intricacies piling up, the international community demands less diplomatic
score-keeping and more genuine movement.
That movement, indeed, is not unconditional. Critics grumble that the current counterterrorism
effort by Pakistan is vague in intent and operation, yet really a creation of optics and not
substance. But even optics can become substance if sustained and institutionalized. Operation
Banyan Marsus and the changes in the laws which it brought demonstrate that Pakistan is at
least trying to turn the page. Its success in making that endeavor look genuine is evidence of an
evolving diplomatic skill set.
In all certainty, the most dramatic part of this shift is the rise of unconventional
diplomats—compliance specialists, financial specialists, and mid-level bureaucrats who now
lead Pakistan’s cause abroad. The ability to speak in the language of technical standards rather
than political grievance has been a dividend. It has allowed Islamabad to frame its case on
measurable improvement rather than rhetorical denials.
The FATF move is not the end of scrutiny. In fact, it heightens the stakes. If Pakistan slips again,
the cost will be higher. The nation cannot relax now and pop champagne bottles at home.

Instead, it needs to double its efforts on transparency, institution control, and sustained
reform.
This also requires a strategic reorientation. Pakistan needs to keep bridging beyond its comfort
zones. Europe and North America are not yet irrelevant. Working with Brussels and
Washington, rather than solely Beijing and Ankara, will decide how far this diplomatic rebirth
can extend. Global legitimacy cannot be based on local patronage.
And finally, FATF’s action is a test—no, not merely of Pakistan’s technical skill, but of its political
maturity. Can it convert a tactical diplomatic victory into strategic credibility over time? The
answer will determine not only Pakistan’s place in the global calculus, but the way multilateral
institutions handle transition countries.
It was not a triumphal procession. It was a beginning. Whether Islamabad parades through
it—or walks alongside it—will decide where it is in the next world order.