ISLAMABAD: Asia Development Bank (ADB) and Pakistan on Monday signed a $300 million loan agreement to develop the country’s capital markets, promote private investment and help to mobilize domestic resources to finance sustainable growth.
Omar Ayub Khan, minister for Economic Affairs witnessed the signing ceremony of Capital Market Development Program (Subprogram 2) between the Economic Affairs Division and ADB.
The program will strengthen market stability, enhance market facilitation and supply-based measures, and also improve demand-based measures for capital market development, a statement said.
Minister Khan acknowledged the ADB’s continued assistance to Pakistan and also highlighted that the country has recently completed various reforms under ADB’s technical and financial assistance including Trade & Competitiveness Program ($800 million), Energy Sector Reforms & Financial Sustainability Program ($600 million) and Capital Market Development Program ($300 million).
“The government is also committed to introduce reforms in other areas such as domestic resource mobilization, climate change and public-private partnerships,” the minister said. “Domestic resource mobilization would help the government to create fiscal space through enhanced revenue collection and overcome the challenge of fiscal deficit.”
The minister further stressed on using digital tools for effective project management and monitoring. At present, 37 ADB-funded development projects amounting to $ 7.9 billion are under implementation across the country in energy, road and transport, agriculture, urban infrastructure and social sector. During the current fiscal year, ADB has disbursed over $1.1 billion for various development projects and programs.
Yong Ye, country director, ADB acknowledged the Pakistan’s efforts for completing reforms in capital market. He also discussed the ADB’s ongoing portfolio and future interventions.
Ye highlighted the various issues pertaining to energy sector including MFF Power Transmission Enhancement Investment Program II (Tranche 3) and Greater Thal Canal Irrigation Project.
He also shared that ADB will provide support to EAD for development of e-portal for effective project management. Pakistan has successfully completed 19 prior policy actions under Capital Market Development Program.
Under subprogram 1, amendments were initiated to the SECP Act, 1997 to ensure structural changes in the appointment process of commissioners, and enhance operational efficiency by having commissioners operate as a collegiate body, while the National Finance Stability Council was established to deal with issues in cross regulatory domains. A new broker model was introduced to strengthen the brokerage industry by reducing the likelihood of broker defaults.