ADB approves additional $1.5b support for flood hit Pakistan
Islamabad, The Gulf Observer: The Asian Development Bank (ADB) on Friday approved $1.5 billion for Pakistan in financial help for social protection, promotion of food security, and support employment for its people amid devastating floods and global supply chain disruptions.
The funding, which will be a loan, has been provided under ADB’s Building Resilience with Active Countercyclical Expenditures (BRACE) Program, the bank announced in a statement on Friday.
The $1.5 billion approved will go towards the government’s $2.3 billion countercyclical development expenditure program which is designed to help soften the impacts of external economic shocks, especially those arising from Russia’s invasion of Ukraine – i.e. help bear food security and energy crisis.
“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,” Zhukov said.
The financing will provide the government fiscal space needed to implement a development expenditure package that would prevent it from falling into debt traps and poverty due to the disproportionate impact of inflation and resource shortage.
The fund will allow the federal government expand the number of poor and destitute 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.
Moreover, it will allow the government to promote gender empowerment and climate change adaptation, which have become even more vital in light of the recent floods.
“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.
The bank added , “We are working closely with the International Monetary Fund (IMF) 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 response package to support people, their livelihoods, and infrastructure in Pakistan that is damaged in the recent floods which have affected over 33 million people and caused extensive damage to infrastructure and agriculture.
Dar welcomes fund
Federal Finance Minister Ishaq Dar on Friday welcomed the announcement by ADB to provide Pakistan $1.5 billion under the BRACE program.
Says the funds will be transferred to Islamabad in the week starting October 24.
