Abdul Wajid Khan

The Asian Development Bank (ADB) will support Pakistan’s development priorities by improving macroeconomic management, building resilience, and boosting competitiveness and private sector development, reports WealthPK.

According to a report of the bank titled ‘ADB and Pakistan: Fact Sheet’, under the country partnership strategy 2021–2025, the bank’s assistance for domestic resource mobilization, financial inclusion, and energy sector reforms will support macroeconomic management.

Financing for workforce readiness and health will help build resilience, while infrastructure support and urban sector investments will improve rural connectivity and urban municipal services. The report says improving access to finance and supporting public–private partnership will boost competitiveness and private sector development to return the economy to a sustainable growth trajectory.

The bank will also help the country prepare for digital transformation through policy improvements, public institution strengthening, and relevant infrastructure investments. The report further says financing partnerships enable the partner governments or their agencies, multilateral institutions, and private organizations to participate in the ADB projects. The additional funds may be in the form of loans and grants, technical assistance, and non-sovereign co-financing. Cumulative co-financing commitments of the bank in Pakistan include sovereign co-financing and non-sovereign co-financing.

The report says sovereign co-financing included $4.63 billion for 53 investment projects and $105.87 million for 64 technical assistance projects since 1973, while non-sovereign co-financing included $11.72 billion for 21 investment projects since 1993. In 2021, Pakistan received a total of $450 million loan co-financing from the Asian Infrastructure Investment Bank for two investment projects, and $24.48 million grant co-financing from the Education Above All Foundation for the Integrated Social Protection Development Program.

The report highlights that Pakistan supports the knowledge plan in the new country partnership strategy 2021–2025 by increasing collaboration with the local universities, think tanks, and research centres. The bank provided support for international conferences on sustainable development hosted by the Institute of Business Administration (IBA) in Karachi. The IBA library carries ADB’s digital publications under the depository library program.

The report says the Covid-19 pandemic continues to pose major health and economic challenges to Pakistan. Continued efforts toward fiscal consolidation and policy reforms will be key to sustaining improvements in macroeconomic stability, especially in broadening the tax base and improving the business environment. Reforms are required to promote high value-added exports, expand social spending, reinforce the energy sector’s financial and technical sustainability, and implement structural changes that will strengthen institutions and create jobs.

The ADB provides vital support to Pakistan’s Covid-19 pandemic response through vaccination, social protection, public sector management, climate resilience, competitiveness, and private sector development. Pakistan was a founding member of the ADB in 1966. Since then, the bank has helped Pakistan reduce poverty and improve prosperity and resilience by supporting infrastructure, urban services, private sector, energy and food security, transport networks, and social services. The report highlights that aligned with the government’s development vision, the ADB’s strategy 2021–2025 for Pakistan focuses on three priorities —improving economic management, building resilience, and boosting competitiveness and private sector development.

To date, the bank has committed 723 public sector loans, grants, and technical assistance totalling $37 billion to Pakistan. Cumulative loan and grant disbursements to Pakistan amount to $28.27 billion. These were financed by regular and concessional ordinary capital resources, Asian Development Fund, and other special funds. The bank’s ongoing sovereign portfolio in Pakistan includes 48 loans and three grants of worth $8.42 billion. In 2021, the ADB’s loan and grant disbursements to Pakistan amounted to $1.31 billion, comprising $0.3 billion in program lending and $1.01 billion from project lending and $3 million from grants.

The bank’s support to Pakistan’s Covid-19 response in 2021 included a $500 million loan in August to help procure and deploy safe and effective vaccine, and a $603 million loan — of which $3 million is from the ADF — for an integrated social protection program to strengthen Pakistan’s flagship Ehsaas program. The loan is complemented by a $24 million grant from the Education Above All Foundation.

The program builds on an earlier $500 million loan under the ADB’s Covid-19 Active Response and Expenditure Support Program and a $300 million emergency assistance loan to strengthen Pakistan’s public health response to shield the poorest families from the pandemic.

The bank committed $300 million for construction of Balakot hydropower plant on Kunhar River near Balakot City in Khyber Pakhtunkhwa. By 2027, the plant will add 1,143 gigawatt hours of clean energy annually to the country’s energy mix, enhancing the energy sector’s reliability and sustainability.

Another $300 million policy-based loan was committed to support reforms to strengthen Pakistan’s energy sector and improve its financial sustainability. The program will help reduce and manage the accumulated cash shortfall across the power supply chain known as circular debt. The bank continues to strengthen Pakistan’s finance sector, develop competitive capital markets, and encourage private sector investment. It committed a $235 million loan to further upgrade the 222-kilometer Shikarpur–Rajanpur section of the National Highway 55 from two lanes into a four-lane carriageway, linking the ports of Karachi and Gwadar in southern Pakistan with national and international economic centers to the north. The bank committed $385 million loan to improve livability and community health in Khyber Pakhtunkhwa cities including Abbottabad, Kohat, Mardan, Mingora, and Peshawar, benefiting over 3.5 million people.

Credit : Independent News Pakistan-WealthPk