ADB chief advises Pakistan to stick to economic reforms

ISLAMABAD: Witnessing the signing of two project loans of over $800 million for Sindh and KP, the Asian Development Bank’s visiting President Masatsugu Asakawa Monday asked Pakistan to stick to the path of a strenuous economic reform agenda.

He outlined the major reforms for achieving sustained growth including enhancing tax revenues, improving the financial sustainability of the energy sector, reducing untargeted subsides, and scaling up social protection.

Top official sources confirmed to The News that the visiting ADB President undertook an important visit as the Manila-based lender committed a financing portfolio of $2 billion for the current fiscal year.

The ADB has committed concessional lending of COL loans with a fixed rate of 2 percent while remaining 50 percent loan portfolio rate will be determined on OCR. The revised regulations under COL loan had become effective and now apply to loans and grants under the ADB’s sovereign operations approved on or after 1 January 2022.

“Pakistan has requested a climate resilience related loan program of $500 million and is expected to get approval from the ADB’s Board within this ongoing calendar year,” top official sources said.

The ADB president would leave the country Tuesday morning (today). In a post on X, Asakawa wrote, “I am in Pakistan where 2022 floods have compounded challenges posed by structural risks and economic shocks. Pakistan is bouncing back and over the next three days my discussion with government leaders will focus on critical areas including economic reforms, climate resilience and infrastructure development to support this process. Also looking forward to visiting an @ADB_HQ-backed program that aids vulnerable families and witnessing the signing of new projects focused on flood recovery and rural development projects”.

According to official announcement made by the Economic Affairs Division (EAD), Masatsugu Asakawa met with Ahad Cheema, Federal Minister for Economic Affairs, to discuss the country’s development priorities and macroeconomic reforms.

Asakawa, lauded the government for undertaking comprehensive reforms leading to progressive signs of economic recovery. He reaffirmed the ADB’s continued support to Pakistan for complementing its development and reform agenda.

Appreciating the ADB’s long-standing and steadfast support to Pakistan, Minister Ahad Cheema briefed the ADB president on a series of reforms introduced by the government. The key reforms include enhancing tax revenues, improving financial sustainability of energy sector, reduction in untargeted subsides and scaling up social protection.

The ADB president reposed his trust in Pakistan’s reform agenda and appreciated the required tough stabilization measures taken by the government to bring about macroeconomic stability in the country.

Asakawa assured Pakistan of its continued support in the areas of public private partnership, climate and disaster resilience enhancement, domestic resource mobilization, promoting women inclusive finance and energy sector reforms.

Mr. Asakawa together with Secretary Economic Affairs Kazim Niaz attended the ground-breaking ceremony of a new ADB office building in Islamabad. The new building will house the ADB’s Pakistan Resident Mission which on completion is expected to serve as ADB’s development and coordination hub responding to evolving country and regional context. Speaking on the occasion, Kazim said the ADB’s own building in Islamabad would mark a new exciting chapter in its enduring and trusted partnership with Pakistan since 1966.