Islamabad: Pakistan has been hit with massive losses to its GDP worth $38 billion because of the Financial Action Task Force’s (FATF) decision to retain the country on its grey list since 2008, according to a research paper published by the Islamabad-based independent think-tank, Tabadlab.
The paper titled, “Bearing the cost of global politics — the impact of FATF grey-listing on Pakistan’s economy”, has been authored by Naafey Sardar.
This comes against the backdrop of a fresh grey listing tag for Pakistan.
Pakistan was retained on the grey list, or list of countries under “increased monitoring”, as the Paris-based UN watchdog judged it deficient in prosecuting the top leadership of UN Security Council-designated terror groups.
The list includes Lashkar-e-Taiba, Jaish-e Mohammad, Al Qaeda and the Taliban.
As per the paper, results suggest that FATF grey-listing, starting in 2008 and till 2019, may have resulted in cumulative real GDP losses of approximately $38 billion.
Moreover, estimates indicate that a large proportion of this response (58 per cent) was driven by reduction in consumption expenditures (both household and government).
Read also: Drugs bring darkness, destruction and devastation: Modi
Exports and inward foreign direct investment are also partially responsible for this decline in GDP, with associated cumulative losses of $4.5 billion and $3.6 billion respectively. These results point to the significant negative consequences associated with FATF grey-listing.
