Multi-Pronged Diplomacy in South Asia

What is the issue?

• An international agreement to curtail terror financing by Pakistan was recently reached at FATF - with strong Indian backing.
• Almost simultaneously, the cross border TAPI pipeline project was celebrated in a joint ceremony - symbolising cooperative diplomacy.
• This “Stick and Carrot Approach”, opens up interesting trends in the subcontinent, which simmers hope.

What were the new developments?

• Financial Action Task Force (FATF) recently threatened Pakistan with economic sanctions if it funds terror groups against Afghanistan and India.
• This can be seen as a clear success for India’s coercive diplomacy against Pakistan in international forums.
• At the same time, a ground-breaking ceremony for the construction of the trans-border natural gas pipeline in Afghanistan was also celebrated.
• Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline project is hoped to bring economic prosperity and enhance diplomatic cooperation in the region.
• These events signify that countries seem to be pragmatic with their economic and political engagements, in the current era of globalisation.  
• Although there is no guarantee of success either in the coercive or the cooperative approach, both need to be pursued suitably.

How was the decision at FATF reached?

• Pakistan has traditionally been a difficult country for the international community to coercively force compliance on terror related matters.
• But the current Trump administration has been displaying extra zeal, although there was much scepticism on the possibilities.  
• Recently, Trump announced a major cut in military assistance to Pakistan for its non-compliance on the terror front, but this only saw the spiking of attacks.
• Subsequently, he has now mobilised the international community at FATF to squeeze Pakistan’s terror strategy by choking its finances.
• While China (as a close ally of Pakistan) could’ve blocked the action, it hadn’t done so, which may be indicative of China’s changing worldview.
• Although, Beijing’s position could’ve merely been a temporary aberration, it indeed calls for cheer.

How does the economic cooperation angle look?   

• Facilitating regional economic cooperation would enhance mutual interdependence and ensure lasting peace in the region.
• Notably, India and Pakistan currently have very small and restricted trade due to problems over the Kashmir question.
• Despite these problems, all countries have been showing keen interest in the TAPI pipeline project, which is hoped to be highly beneficial.
• Surprisingly, even non-state actors like Taliban who continue to hold significant clout over regions in Afghanistan have welcomed the project.
• While project is expected to cost $10 billion, no international bank or government appears willing to risk investments in this troubled region.  
• Here too, China could prove crucial, as it is already betting massively in the region through its Belt and Road Initiative. 
• These new dynamics imply that the past might not constrain the future and that structural changes in international relations are inevitable over time.

Quick Fact

FATF

• The Financial Action Task Force (FATF) is an inter-governmental body established in 1989 and is headquartered at Paris, France.
• The objective of the FATF is to combat money laundering, terrorist financing and other related threats to the integrity of the international financial system.
• It nudges nations to legislate on concerned subjects by setting standards for effective implementation of legal, regulatory and operational measures.  
• Currently, FATF consists of 35 member countries and 2 regional organisations, the European Commission (EU) and the Gulf Co-operation Council (GCC).
• Notably, most major economies (including India) are members but Pakistan is not a member.
• The FATF also works in close co-operation with a number of international and regional bodies like the – UN, World Bank and Interpol. 

Source: The Indian Express