Crisis piles on crisis in Pakistan, three among the latest being the Supreme Court’s denial of the three-year extension to the Army chief, the death sentence awarded to Pervez Musharraf, and still more recently the potential blacklisting of a failed nation by the Paris-based Financial Action Task Force for its failure to rein in the terrorists. The fact that a normally sensitive government is yet to respond to the charge levelled by the global watchdog for terror financing would suggest that any strained explanation would be a feeble defence of an ugly truth.

The risk of Pakistan being placed on the ‘Black List’ if it does not respond to 22 points in a list of 27 questions is damagingly real. There has now emerged the possibility of terror financing impinging on the country’s torpid economy, if Tuesday’s IMF report is any indication. If in due course of time Pakistan is blacklisted by the FATF, it could result in a freeze on capital flows and lower investment in the country.

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Both probabilities are bound to deepen the economic crisis, caused in part by Islamabad’s game of playing footsie with the terrorists. The report is explicit on the point that the IMF programme continues to face significant risks, “both from domestic and external factors”. While Pakistan continues to be in the list of “FATF’s jurisdictions with “serious deficiencies”, blacklisting could imply slow progress in refinancing/re-profiling loans from major bilateral creditors, and “increasing headwinds from a weaker global economic backdrop”.

The subtext of the FATF report must be the assessment that the country’s “existing efforts to tackle terror were inconsistent with the level of risks and greater effectiveness needs to be demonstrated”. The IMF has been remarkably specific in spelling out its conditions to Pakistan. Its government has been told to show a substantive level of effectiveness to the IMF by March 2020, and this should be consistent with FATF’s “Immediate Outcome 9” on terrorism financing investigations.

The other point of reference is “Immediate Outcome 10 on targeted financial institutions”. While on the face of it, this might appear to be the IMF’s jargon, a distressing signal has been emitted to Pakistan. Given the dismal domestic scenario, the IMF has cautioned that the “failure to meet programme objectives could jeopardise the availability of external financing”.

The warnings by FATF and IMF would suggest that Pakistan now contends with a forbidding cocktail of a stuttering economy and terror financing. The fact that Pakistan is poised to graduate from the FATF’s Grey list to the Black reaffirms that Imran Khan has turned out to be a rather ineffectual Prime Minister. There is a contretemp too many on his road to Naya Pakistan.