Why Turkey joins Pakistan on FATF grey list and how it is a big blow for ‘best buddies’

Following the Financial Action Task Force’s (FATF) three-day plenary on 19-21 October, its current president, Marcus Pleyer, announced that Pakistan would continue to be on the grey list. Pleyer also said that Turkey would be put on the list. Both Pakistan and Turkey are now among 23 countries worldwide that are on the group’s grey list which includes Morocco, Myanmar, Jordan and the Philippines too.

Certainly, these are the most prominent countries to have this dubious ‘distinction’. Pakistan prides itself to be one of the leaders of the Islamic world — the only Muslim country to possess nuclear weapons. Turkey, under President Recep Tayyip Erdogan, is seeking to evoke the memories of Ottoman times when the Turkish sultan led a great empire. For both countries, particularly for Turkey, the FATF decision is clearly galling. The difference is because Pakistan has been on the list since 2018 and Turkey has just been put on it.

Pakistan and Turkey have close ties going back decades. Both countries were part of the US alliance system in the 1950s. This led to the development of strong affinities between the two countries’ armies. In Pakistan Field Marshal Ayub Khan had staged a coup and ousted the civilian government. He also tried to keep the mullahs at bay, even as Pakistan was created on the basis of the two-nation theory. In Turkey, the Army was the real ruler of the country. It zealously guarded the nation’s secular traditions which were put in place by Ataturk, the founder of modern Turkey.

However, times change. In Pakistan, the army transformed its own nature under General Zia-ul-Haq. Moving away from Ayub Khan’s ideas, Zia injected religiosity and reinforced its role as the custodian of Pakistan’s founding ideology. In Turkey, the army remained secular but religious sentiment was growing which was tapped by Erdogan to successfully marginalise the force and establish himself as the undisputed leader of the country. In the process, he abandoned the firm secularism of Ataturk. While both countries changed their ideological course and the US-led alliance system which had also helped in bringing them together had also ended, their strong contacts continued.

Turkey-Pakistan relations have been invigorated during the prime ministership of Imran Khan. In 2018 Khan joined hands with Erdogan and former Malaysian prime minister Mahathir Mohamad to take initiatives to promote the interests of the Islamic ummah. These efforts were considered by Saudi Arabia as a direct challenge to its leadership of the ummah. It leaned on Imran Khan who backed off from trilateral efforts but that did no damage to Pakistan-Turkish ties. Interestingly, Imran Khan is now promoting Turkish culture in Pakistan.

This includes glorifying the achievements of the Ottoman empire. Imran Khan and the Pakistan Army are also grateful to Turkey for its abiding support to their country’s stand on Kashmir. Erdogan has gone out of his way to do so. Pakistan has also relied on Turkey, along with China and Malaysia, to keep itself out of the FATF black list.

To the many issues which have provided a basis for traditionally strong Pakistan-Turkey ties will now be added a shared grievance towards Western countries for using the FATF for putting them in the dock. In Pakistan’s case, FATF has acknowledged that Pakistan has made “significant progress across a comprehensive CFT (Counter financing of Terrorism) action plan” and has completed 26 out of the 27 action items mentioned in the 2018 action plan. However, the FATF has found it lacking in not prosecuting senior leaders of United Nations-designated terrorist organisations.

The fact is that terrorist organisations such as the Lashkar-e-Toiba and the Jaish-e-Mohammad are strategic assets of the Pakistan state and are used against India. Hence, while it may from time to time project that it has initiated action against them in terms of its anti-terrorism laws, it cannot take effective action against them. As long as India, which is one of FATF’s 39 member countries, can convince the group through sufficient evidence of Pakistani laxity against terrorist leaders like Hafiz Saeed and Masood Azhar, it may be difficult for Pakistan to get off the grey list.

Pakistan is aware of its vulnerability in this area; so, its reaction to the FATF decision was soft. Hammad Azhar, currently Pakistan’s energy minister who is former finance minister, tweeted: “We are getting closer to consensus numbers in spite of ‘challenges’. Our technical stance will be vindicated soon InshAllah”. Clearly, the term “challenges” was a reference to India especially as Pakistan has complained in the past that India has politicised a technical body.

In putting Turkey on the grey list, FATF has given out eight technical reasons which show that the country will have to make great efforts in both anti-money laundering and CFT areas if it wishes to get off the grey list. These actions include greater oversight of its money transfer industry, investigations of cases and “prioritising TF (terrorist financing) investigations and prosecutions of UN designated groups”. This is a strong indictment of a country that has the 17^th largest economy in the world and is a G20 member.

No wonder Turkey responded harshly to the FATF decision. Its finance ministry called the FATF action as “unwarranted”. Suleyman Soylu, the country’s interior minister, went further. He said, “We are a country where terrorism inflicts the most costs. The one, who finances and empowers terrorism, is Europe. There can be such brazenness. It can be made contrary to the facts.” Significantly, Erdogan has ordered ten Western countries’ Ambassadors be declared persona non grata on a matter unconnected with the FATF, but it is likely that its greylisting has contributed to his rage leading to this action.

The fact is that both Pakistan and Turkey’s economies are in poor shape. One sign of this is high inflation and the fall in the value of their currencies. The FATF decision led to a further downward push to the Turkish Lira. These economic vulnerabilities will lead both countries’ economic managers to cooperate with the FATF. In Turkey’s case, this may go hand in hand with the political leadership’s grandstanding against the West.

Ultimately the harsh realities of economic factors have a chastening effect except on the most obtuse of leaders — those who are willing to cut their noses to spite their faces!

The writer is a former Indian diplomat who served as India’s ambassador to Afghanistan and Myanmar, and as secretary, Ministry of External Affairs. Views expressed are personal.​