Asian Development Bank releases $1.5 billion to Pakistan

Federal Finance Minister Ishaq Dar has said that Asian Development Bank (ADB) has released $1.5 billion funds to Pakistan under Building Resilience with Active Countercyclical Expenditures (BRACE) programme for the credit of Government of Pakistan’s account with State Bank of Pakistan, reported 24NewsHD TV channel. 

Ishaq Dar made the announcement in a tweet posted on Wednesday along with the ADB press release.

Asian Development Bank has released funds $1.5 billion to Pakistan under BRACE program for the credit of Govt of Pakistan’s account with State Bank of Pakistan.
AlhamdoLilah!

— Ishaq Dar (@MIshaqDar50) October 26, 2022

The Asian Development Bank (ADB) has approved $1.5 billion in financing to help the Government of Pakistan provide social protection, promote food security, and support employment for its people amid devastating floods and global supply chain disruptions.

The loan, provided under ADB’s Building Resilience with Active Countercyclical Expenditures (BRACE) Program, will help fund the government’s $2.3 billion countercyclical development expenditure program designed to cushion the impacts of external shocks, including the Russian invasion of Ukraine.

“Pakistan’s recovery from the COVID-19 pandemic has been impeded by external shocks,” said ADB Director General for Central and West Asia Yevgeniy Zhukov. “Increasing business costs and rising living expenses are affecting millions of Pakistanis, especially the poor and vulnerable. ADB’s program will help the government manage the impacts of high prices, increasing food insecurity, slowing business activity, and reducing income for vulnerable groups, many of whom are also reeling from the devastating floods.”

ADB’s financing will provide the fiscal space needed for the government to implement its countercyclical development expenditure package, which is designed to target the poorest families in Pakistan who are often disproportionately affected in times of crisis. The government’s support includes specific measures to promote gender empowerment and climate change adaptation, which have become even more important in light of the recent floods.

ADB’s assistance will help to expand the number of families receiving cash transfers from 7.9 million to 9 million, increase the number of children enrolled in primary and secondary schools, and enhance geographic coverage of health services and nutritional supplies for pregnant and lactating mothers and children under 2 years old.

“The program is part of a comprehensive and well-coordinated package of support. It will help the government deal with the impact of the immediate shocks to the economy, while, in parallel, continue the structural reforms that are necessary to improve the country’s medium- to long-term macroeconomic prospects,” said ADB Director for Public Management, Financial Sector, and Trade Tariq Niazi. “We are working closely with the International Monetary Fund and other development partners to ensure that our support through policy dialogue, technical assistance, and program lending is well-coordinated and that, ultimately, we are able to help the government improve Pakistan's resilience to shocks.”

ADB’s $1.5 billion countercyclical support is part of a significant response package to support people, livelihoods, and infrastructure in Pakistan in the wake of the recent floods which have affected over 33 million people and caused extensive damage to infrastructure and agriculture.

Pakistan was a founding member of ADB. Since 1966, ADB has committed over $37 billion in loans, grants, and other forms of financing to promote inclusive economic growth in Pakistan and improve the country’s infrastructure, energy and food security, transport networks, and social services.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.

Pertinent to note that Finance Ministry and the Prime Minister’s Office on Tuesday said that the prime minister witnessed the signing ceremony of the loan agreement of $1.5 billion under the BRACE programme of the ADB.

The premier acknowledged the role of development partners, especially, the ADB and thanked the ADB Board for approving US$ 1.5 billion budget support for Pakistan under the BRACE programme.

He also acknowledged ADB President Masatsugu Asakawa and his team for helping Pakistan deal with the recent climate change-induced flood disasters. 

According to the post-damage needs assessment (PDNA) carried out by the ADB, World Bank, EU and the United Nations in partnership with the government of Pakistan, the recent floods have caused $30 billion loss to Pakistan’s economy.

The premier expressed the hope that ADB’s $1.5 billion loan would help ease Pakistan’s economic woes.