ISAS Insights

Is it possible that Pakistan has scored an own-goal by allegedly sponsoring the 14 February 2019 terrorist attack on Indian security forces in Pulwama, Kashmir, which took 40 lives? Since the Pakistan-based terrorist group Jaish-e-Muhammed has claimed responsibility for the attack, India has vowed to work on isolating Pakistan economically and diplomatically as a state sponsor of terrorism. This comes at a time when Pakistan is facing an external payments crisis, with only US$7 billion (S$9.5 billion) in reserves – less than two months of import cover – and is in desperate need of a bailout by the International Monetary Fund (IMF). Yet, if India succeeds in convincing major shareholders of the IMF – the United States, the European countries, Japan and China – and international organisations like the terror financing watchdog, the Financial Action Task Force, of Pakistan state’s involvement in these attacks, an IMF bailout of Pakistan, which looked like a distinct possibility just a couple of weeks ago after the meeting between Pakistani Prime Minister Imran Khan and IMF Managing Director Christine Lagarde, could be in jeopardy. Unless Pakistan takes significant steps to convince the G7 and other countries that it is serious about combatting home-grown terrorism, it risks going over the precipice.