On Financial Governance and Freedom of Faith in Pakistan

September 30, 2022

Charles Ramsey, Senior Fellow for RFI’s South and Southeast Asia and Middle East Action Teams, wrote a piece published on the LSE Religion and Global Society blog this week called, “On Financial Governance and Freedom of Faith in Pakistan.” Through the lens of covenantal pluralism – a philosophy that envisions a paradigm of citizenship characterised by equal rights and responsibilities and a culture of relational engagement and mutual respect – Ramsey explores how policy changes enacted by the government of Pakistan have impacted religious liberty across the country. He writes:

Amidst headlines of a Taliban resurgence and devastating floods, it would be easy to overlook some less dramatic and yet promising news coming from Pakistan. The Financial Action Task Force (FATF) released its report indicating significant gains in financial governance. The FATF, though not a name known to many, is an important inter-governmental agency tasked with combating systemic money laundering and terrorist financing. It is tasked with assessing the integrity of a country’s financial system, and as such serves as the door keeper for international investment. According to FATF the Pakistani government has succeeded in implementing 35 of the 40 FAFT recommendations issued in 2020, and the country is now on track to move off the infamous “grey list,” pending a successful onsite visit later this year. Countries on the list can be subject to economic sanctions from institutions like the International Monetary Fund (IMF) and the World Bank, and most experience adverse effects on trade, as this scares away foreign investors. The Pakistan economy has been in a critical state, with low foreign reserves, a widening current account deficit, and a 24% depreciation of the rupee against the US dollar. Following the report, the Saudi and Qatar governments have promised to invest over $4 billion this year alone, and for those concerned with financial governance in Pakistan and the future of this nation’s fragile economy, this is good news indeed.

But more than the immediate relief, reforms of this nature are also good news for those concerned with the social and political difficulties, particularly in the arena of religiously motivated violence, that have plagued the nation. The causes of religious repression and conflict in Pakistan are complex, and a sometimes-overlooked dimension is that of the state’s capacity to limit the use of its financial markets to fund violent extremism. Extremist groups, sometimes in collusion with elements in the government and armed forces, have exploited failures in governance to embezzle funds, launder money, and finance terrorism. This is a blight on the nation’s reputation that is holding them back from an otherwise promising future.

In a recent article for The Review of Faith & International Affairs, I explored the issue of religious liberty in Pakistan through the lens of covenantal pluralism (CP). This is a philosophy that envisions a paradigm of citizenship characterised by equal rights and responsibilities and a culture of relational engagement and mutual respect. The framework underscores the necessity of three interlocking “conditions of possibility” for CP to flourish in a society: equal protection for freedom of religion or belief under transparent rule of law, the promotion of religious literacy, and the social demand for virtues of mutual respect. I argued that whereas the third condition continues to hold promise (though it is being severely tested), the first two are constrained in Pakistan primarily due to the complex challenges of governance.

Read the full article: “On Financial Governance and Freedom of Faith in Pakistan.”