PAKISTAN and the Asian Development Bank signed an agreement on Monday under which the latter will provide 1.5 billion dollars to help the country provide social protection, promote food security and support employment for its people amidst the devastating floods.
This liquidity support at a time when the country is faced with unprecedented devastating floods is really critical and goes a long way not only calming the jittery markets but also extending financial support to the flood affected people besides rebuilding climate resilient infrastructure.
The ADB has, over the years, remained a very reliable partner which has extended support to Pakistan without any tough conditions.
The $1.5 billion loan is equal to 20% of the country’s gross foreign exchange reserves of $7.5 billion, underscoring its importance for Islamabad that has been critically reviewed in recent days by the international credit rating agencies.
It is the largest loan tranche that the ADB has ever provided to the country.
Unlike the Bretton Woods Institutions – the World Bank and the International Monetary Fund (IMF), the ADB has traditionally adopted a positive approach in its dealings with Pakistan.
It will also be unfair not to recognize and appreciate the efforts put in by Finance Minister Ishaq Dar to secure the loan after successful negotiations with the top management of the ADB.
Speaking at the agreement signing, the Finance Minister also assured that the government will steer the country out of all challenges.
This indeed was a positive message on the part of Dar to engage with the financial institutions and other important partners.
Given the scale of climate disaster, it is also for the international community to fulfil its responsibility to help the flood victims.
This support must not come in loans but grants as loans will only further burden the country’s economy.
Pakistan requires massive support to rebuild the lives of affected population as well as build a climate resilient infrastructure to avert such horrific disasters in future.
The people of Pakistan will see how the world delivers climate justice at the donor conference to be hosted by France.
