Pakistan’s economy might take a blow if global finance group puts them on notice

By Middle East Affairs

A global finance group is considering placing Pakistan on its watchlist of nations that financially support terrorist groups — a move which could hurt Pakistan’s economy, Reuters reports.

The Financial Action Task Force, which consists of the United States and European countries, will meet in Paris to discuss a co-sponsored motion that would put Pakistan on an effective “gray list.”

It doesn’t mean companies are barred from investing in the country, but it certainly makes it a riskier move, as Pakistan will lose its credibility.

The move is intended to pressure Pakistan into cutting ties with Islamist militants in Afghanistan.

Pakistan denies those ties and didn’t seem to be moved by a repercussion last month when the U.S. suspended a $2 billion aid.

This move, however, would bring “extra scrutiny from regulators and financial institutions that can chill trade and investment and increase transaction costs,” according to Reuters.

Pakistan’s economy, which sits at nearly $300 billion and is rapidly expanding, could “lose steam” if it ends up on the same list it was removed from in 2015, the news agency reports.

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