GP Team

The World This Week # 90, 25 October 2020, Vol 2, No 42

Abigail Miriam Fernandez, Lakshmi V Menon and Minhaj Khan

Pakistan: To stay on the 'grey list' until February 2021. FATF wants Islamabad to do more
What happened?
On 23 October, the Financial Action Task Force (FATF) announced that Pakistan would remain on the increased monitoring list, the so-called grey list for another four months. The Global watchdog stated, "to date, Pakistan has made progress across all action plan items and has now largely addressed 21 of the 27 action items. As all action plan deadlines have expired, the FATF strongly urges Pakistan to swiftly complete its full action plan by February 2021." Adding, "the FATF takes note of the significant progress made on several action plan items." Further, FATF president, Dr Marcus Pleyer, president of the FATF while appreciating the efforts made by the country said, "It needs to do more" adding, "Pakistan needs to complete six outstanding items" which are all very serious and that risks are not over until the government of Pakistan repairs all six outstanding items.
Pakistan welcomed the decision calling it is indicative of the "confidence of the FATF" on the efforts of taken by the government of Pakistan. The decision comes after the three-day virtual plenary FATF session, which started on 21 October. The next plenary is due on 21-26 February.

What is the background?
First, Pakistan has been under pressure since June 2018, following an unsatisfactory evaluation of its compliance with FATF's parameters. Since then, Pakistan made efforts to work with the FATF and the Asia Pacific Group (APG) to strengthen its Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) regime. 

Second, complying with the full FATF action plan has been challenging. Pakistan was to comply with a 27-point action plan as per the interim deadlines in January and May 2019, and a final deadline in October.  In June, Islamabad got an unexpected breather after the global watchdog temporarily postponed all mutual evaluations and follow-up deadlines due to the pandemic. In October 2020, the APG submitted a Mutual Evaluation report on Pakistan to the FATF, along with its own assessment of Islamabad's efforts, in which it stated that the efforts were inadequate. However, Pakistan believes that it had developed monitoring and enforcement mechanisms. Following the latest meeting, the FATF has strongly urged Pakistan to complete its full action plan. The October 2019 deadline was then extended to February 2020. Pakistan once again received a four-month grace period to complete its 27-point action plan. 

Third, Pakistan's efforts thus far have been substantial but not enough. Pakistan's political commitment has led to progress in several areas in its action plan, including taking action to identify and sanction illegal Money or Value Transfer Services, implementing cross-border currency and bearer negotiable instruments controls, improving international cooperation in terrorist financing cases, passing amendments to the Anti-Terrorism Act to increase the sanctioning authority, financial institutions implementing targeted financial sanctions and applying sanctions for AML/CFT violations, and controlling facilities and services owned or controlled by designated persons and entities. 

Fourth, several crucial strategic deficiencies remain to be addressed. This includes the following:
to demonstrate that law enforcement agencies (LEAs) are identifying and investigating the widest range of TF (terrorist financing) activity;
to address TF prosecutions result with effective and proportionate sanctions;
to effectively implement financial sanctions against all designated terrorists;
and to look into enforcement against targeted financial sanctions (TFS) violations. 

What does it mean?
Exiting the FATF's 'grey list' has been the top priority for the Pakistan government. Continuation on the 'grey list' has made it increasingly difficult for the country to get financial aid from the International Monetary Fund (IMF), World Bank, Asian Development Bank (ADB) and the European institutions. Given the dire economic situation and the current economic climate of the pandemic, Pakistan is keen to attract investments, and also desperately requires these funds.
Further, the PTI government has taken efforts with a series of FATF specific legislations. It appears, more efforts will have to be taken to complete the remaining items in line with its strategy by February 2021 and also establish mechanisms to maintain these commitments. 

Sudan: To normalize relations with Israel, following UAE and Bahrain
What happened?
On 24 October, the US President Donald Trump announced that the Sudanese Prime Minister Abdalla Hamdok and Israeli Prime Minister Benjamin Netanyahu agreeing to normalize relations. The joint communique issued by the three states read: "The leaders agreed to the normalization of relations between Sudan and Israel and to end the state of belligerence between their nations". After the United Arab Emirates and Bahrain, Khartoum is the third Arab government to normalize ties with Israel in the last two months.

Palestinians called it a "new stab in the back". 

What is the background?
First, the US pressure and incentives. On 19 October, following months of negotiations between the US administration and the transitional Sudanese government, Trump in a tweet, menitioned about his decision to remove Sudan from the State Sponsors of Terrorism (SST). He wrote, "New government of Sudan, which is making great progress, agreed to pay $335 million to US terror victims and families. Once deposited, I will lift Sudan from the State Sponsors of Terrorism list. At long last, Justice for the American people and a big step for Sudan!" Sudan's PM Hamdok responded by appreciating Trump's statement and said that Sudan was looking forward to Trump's "official notification to Congress rescinding the designation of Sudan as a state-sponsor of terrorism, which has cost Sudan too much." The US Congress is yet to approve any such move.

Second, Sudan's economic interests. The removal from the SST could help Sudan avail the much-required international investment that could address the country's spiralling inflation. As per Sudan's Central Bureau of Statistics, Sudan's annual inflation peaked to 212.29 per cent in September 2020 from 166.83 per cent in August. With the de-listing, Sudan will be relieved of its debts under the World Bank's and International Monetary Fund's Heavily Indebted Poor Countries (HIPC) Initiative. 

What does it mean?
First Sudan has been internally skewed on the normalization, the de-listing and the economic gains mean much larger than the Palestinian cause for a country with rampant poverty, $60 billion in international debt and a crumbling economy. Moreover, the benefits will mollify the domestic criticism that could lead to the breakdown of Sudan's friable democratic transition.

Second, national interests and personal interests. For Israel, which has already approved the resumption of settlement construction, it means garnering more Arab support and furthering the interests of greater Israel. For Trump, it means a significant foreign policy score ahead of the upcoming US presidential elections. However, the nascent deal's success largely depends on the US Congress' decision. Thus, Sudan has insisted on holding the promised $335 million in victims' compensation in escrow until the Congress grants legal immunity.

Japan: Prime Minister Suga's State visits to Vietnam and Indonesia
What happened?
During 18-21 October, Japan's Prime Minister Suga Yoshihide undertook a four-day State visit to Vietnam and Indonesia—his first as Prime Minister. Japan and Vietnam agreed on a deal to allow Japan to export defence-related equipment and technology to Vietnam. Both also agreed on the movement of people to help reopen the two economies. While they emphasized on the necessity of a Free and Open Indo-Pacific, both countries refrained from mentioning China in their opening statements. Twelve bilateral agreements were signed between the two countries relating to energy, infrastructure, environment, health, and innovation. Japan agreed to provide Vietnam equipment worth 300 million yen to 'combat terrorism', and a loan of 4 billion yen to combat the COVID-19 pandemic. At his speech at the Vietnam-Japan University, Suga emphasized on Japan's policy of relocating supply chains to ASEAN, the importance of ASEAN-Japan ties, and Japan's policy on opposing any form of instability in the South China Sea.

In Jakarta, Suga agreed to provide Indonesia with a loan of 50 million yen for disaster prevention measures. Suga asserted that Southeast Asia is essential in realizing a Free and Open Indo-Pacific. Japan and Indonesia agreed to have "two-plus-two" foreign and defence ministerial-level talk. Japan has such an arrangement only with India, Australia, and the US. Both countries have also agreed to work on the possibility of Japan exporting defence-related equipment and technology. Japan also agreed to provide Indonesia with a loan of 50 billion yen for the pandemic-hit economy. Further, Suga asserted in his press statement that he met with representatives of Japan's businesses in Jakarta and agreed that Japan would vehemently focus on its supply chains there.

What is the background?
First, Japan's pursuit of the Indo-Pacific and Southeast Asia. Tokyo promulgated the "Free and Open Indo-Pacific" strategy in 2016; it envisions Japan's goals to have the Oceans in the Indo-Pacific open for uninterrupted commerce and freedom of navigation. Part of this policy envisions the South China Sea and the East China Sea free of conflict. ASEAN centrality is the cornerstone for this approach, thereby seeking close political, economic, and strategic links between Japan and ASEAN countries. 

Second, Japan has sought to use FOIP policy as a check and balance over China's rise in the region. This has led to measures recently such as Japan's proposal of moving supply chains away from China and into ASEAN, India, and Bangladesh by giving firms various economic incentives to do so.
Third, Japan has sought to expand its defence industry by revoking its arms export ban in 2014. So far, Japan has signed agreements with eleven countries, including Vietnam, as potential countries for exporting arms and defence-related technology. 

What does it mean?
Japan seeks to woo ASEAN countries into its existing security frameworks, such as the Quadrilateral security dialogue. Judging by Indonesia's interest and hitherto close ties with Japan's primary ally, the United States, it seems highly likely that Indonesia may soon show interest in expanding security cooperation with Japan.
However, Vietnam's extreme dependence on Chinese investments may restrict security cooperation with Japan only as far as its primary zone of contention lies - the South China Sea, where Vietnam controls a large part of the disputed territory. 

Also in the news…
by Harini Madhusudan, Rashmi Ramesh, and Abigail Miriam Fernandez

East Asia and Southeast Asia This Week
Australia: High Commissioner says, a 'mistake' to have walked out of Quad in 2008
On 23 October, Australian High Commissioner to India said, Australia should not have walked out of the Quad, and subsequently the Malabar exercises with India and was "delighted" at New Delhi's invitation in this year's naval exercises, in November. 2017. Since the revival of Quad in 2017, the Australian government has requested India to rejoin the exercises. "I can say that, with the benefit of hindsight, clearly that it [withdrawing from Malabar] was a mistake. I suspect earlier in the piece, that became a stumbling block, and that was not forgotten in terms of reassembling Australia as part of that exercise," he said in an interview to The Hindu. 

Thailand: Government withdraws the emergency decree
On 22 October, the Thailand government withdrew the emergency decree that was introduced in Bangkok the previous week. Emergency measures included a ban on political gatherings of five or more people or publishing news that could "affect security," and was announced with an intent to end months of protests against the government and monarchy. However, it served only to inflate the anger and draw tens of thousands of people onto the streets. An official statement said, "The current violent situation that led to the announcement of the severe situation has eased and ended to a situation in which government officials and state agencies can enforce the regular laws."

Malaysia: PM Yassin seeking to announce a state of emergency
On 23 October, the local media in Malaysia reported that Prime Minister Yassin is seeking to declare a state of emergency to suspend parliament and focus on battling the fresh coronavirus outbreak. Speculations of the same are said to have intensified after he held a special Cabinet meeting and sought an audience with the king. A new wave of coronavirus in Malaysia has put the confirmed cases tally at more than 24,000 in just three weeks. Simultaneously, the opposition leader Anwar Ibrahim had met the king the previous week to show that he has enough support from lawmakers to topple the Muhyiddin government, who has only a two-seat majority in the Parliament.

Brunei: Australia announces a resident defence advisor in Brunei
On 23 October, Australian Defence Minister Linda Reynolds announced that Brunei would permanently host an Australian defence adviser, as part of broader commitment to deepen regional cooperation, and appointed Lieutenant Colonel Daniel Hauser to this newly created role. The visit also coincided with the 75th anniversary of the Australian troops landing in Brunei as part of the Oboe VI landings during the final stages of World War II and Minister Reynolds paid her respects to the Australians who lost their lives. As a part of her broader tour of the Indo-Pacific, the minister is expected to visit Japan and Singapore following Brunei. 

South Asia This Week
Sri Lanka: Parliament passes 20th Amendment
On 22 October, the Sri Lankan Parliament passed the controversial 20th Amendment with a two-thirds majority, following a two-day debate over the concerns that were expressed from various corners. In the 225-member House, 156 members voted in favour of the Amendment, while 65 of them voted against it. Notably, eight MPs from the opposition parties voted in favour of the legislation, though their parties vehemently opposed it and challenged it in the Supreme Court.
The Amendment has been passed after the Supreme Court ruled that a two-thirds majority was sufficient in the House. However, four clauses need a referendum. It is not clear if the government will refer it to the public for their approval.

Nepal: PM uses the old map, indicates a softening stand
On 23 October, Nepal's Prime Minister KP Sharma Oli, while greeting the nation on the festival of 'Vijaya Dashami', used the old map of Nepal, instead of the new political map that included the disputed territories of Limpiyadhura, Lipulekh and Kalapani. While it probably indicates a softening stance of Kathmandu towards India, the move drew criticism within Nepal. Opposition leaders demanded the use of the new map that was approved in the Parliament on 13 June 2020.

Bangladesh: International actors pledge $597 million for Rohingyas
On 22 October, the international community led by the UN High Commission for Refugees (UNHCR), UK, European Union and the US, pledged $597 million as humanitarian assistance for the Rohingyas. The Conference on Sustaining Support for the Rohingya Refugees Response was hosted by the four actors and saw the participation of 50 countries.
However, Bangladesh received less than half the budget that was planned for assisting the Rohingyas. The initial budget that was $877 million rose to $1 billion, due to the prevailing pandemic and its effects.

The Middle East and Africa This Week
Egypt, Greece and Cyprus: The Tripartite Summit
On 21 October, The Presidents of Cyprus and Egypt, and the Prime Minister of Greece held a tripartite summit. The summit focussed on cooperation and coordination on common issues, and follow-up on joint projects that are being implemented as part of the trilateral cooperation mechanism. The Egyptian President remarked that the three countries "have decided to counter acts of provocation and violations in the Middle East", targeting Turkey indirectly for committing violations, escalating conflicts and obstructing peace and stability in the region.

Iran and the US: Sanctions on Iranian groups for influencing elections
On 22 October, the US sanctioned five Iranian groups including the IRGC, IRGC's Quds Force, Bayan Rasaneh Gostar Institute, Iranian Islamic Radio and Television Union, and International Union of Virtual Media, accusing them of playing a role in the US elections scheduled to be held on 3 November. The US Department of the Treasury noted that these groups "have directly or indirectly engaged in, sponsored, concealed, or otherwise been complicit in foreign interference" in the election. The sanctions aim to freeze the assets of the five groups.

Iran: Tehran imposes sanctions on the US Envoy to Iraq
Iran has imposed sanctions on the US ambassador to Iraq, accusing him and two other American diplomats for resorting to acts of terror against Iran. The Iranian Foreign Ministry stated that the three diplomats "have effectively engaged in organizing, financing, leading and committing terrorist acts against the interests of the government or citizens." The primary accusation has been regarding their involvement in the killing of General Qassem Soleimani in January 2020. Tehran's move comes after Washington blacklisted its envoy to Iraq, for being a "close advisor" to Gen Soleimani.

Northern Cyprus: Rightwing and Turkey-backed Ersin Tatar sworn in as President
On 23 October, the rightwing leader Ersin Tatar was sworn in as the President of the Turkish Republic of Northern Cyprus. He was elected as the new leader on 18 October. The swearing-in ceremony was attended by the Turkish Vice President Fuat Oktay and extended wishes on behalf of Ankara's leadership. Tatar is scheduled to visit Turkey on 26 October, his first state visit. Turkey is TRNC's guarantor power.

Libya: Rival parties announce a permanent ceasefire
On 23 October, the warring sides in Libya signed an agreement for a permanent ceasefire in Geneva, representing a step forward in diplomatic efforts to resolve the conflict. As per this new agreement facilitated by the UN, all foreign mercenaries and armed forces will have to withdraw within the next 90 days, and the parties also agreed that any violations in the ceasefire would be dealt by a joint military force, which will be under a unified command. The agreement has also established a Joint Police Operations room which will implement and propose special arrangements. Although many have expressed this deal being a 'ray of hope' which may help finally reach a lasting peace, some are scepticism over whether the truce will last, as previous truce deals over the years have failed to end the fighting.

Europe and the Americas This Week
Bolivia: Presidential elections give a landslide victory to the left
On 18 October, Luis Arce, Bolivia's progressive candidate from the Movimiento al Socialismo (MAS) party retained its majorities in both houses of congress while beating his nearest rival by about 20 points. The primary reason for the Mas victory is being attributed to the popularity of its policies. The elections in Bolivia come almost a year after Evo Morales, was overthrown in a police-military coup in November 2019, that installed the rightwing evangelical Jeanine Áñez as Bolivia's president. The elections were made possible after the protests in Bolivia where large numbers of working-class participate in strikes and road blockades bringing Bolivia to face a combination of mass disruption, parliamentary pressure by Mas legislators and global scrutiny.

The US: Presidential Debate with a new format and a different moderator
On 22 October, candidates Donald Trump and Joe Biden engaged in the second and final televised debate, 12 days ahead of the Presidential elections. With over 45 million already having voted, the discussions ranged between Trump's tax returns, the debate on race in America and with the Coronavirus situation taking majority space. The debate was marked for being more formal than the previous one with, both parties using respectful tones.

Europe: To cross 250,000 deaths amid the surge in cases 
On 24 October, according to a Reuters tally, Europe became the second region after Latin America to surpass 250,000 deaths. With record numbers of daily COVID-19 infections from the past two weeks, Europe reported 200,000 daily infections for the first time on 22 October. The United Kingdom, Italy, France, Russia, Belgium and Spain account for two-thirds of the 250,000 deaths registered from a total of 8 million cases across Europe. Europe accounts for nearly 19 percent of global deaths and about 22% of global cases. 

About the authors 
Abigail Miriam Fernandez is a Research Assistant at NIAS. Lakshmi V Menon is a Research Consultant at NIAS. Minhaj Khan is a PhD Scholar with the Centre for East Asia Studies, JNU. Harini Madhusudan and Rashmi Ramesh are PhD Scholars at the School of Conflict and Security Studies at NIAS. 
 

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