Friday, January 15, 2021

Asian Development Bank Rejects Funding For “Bilateral” CPEC Project

Asian Development Bank will not finance the CPEC Project (China-Pakistan Economic Corridor). Asian Development Bank (ADB) is an international financial institution and cannot become part of any bilateral initiative like the CPEC, said ADB Strategy, Policy and Review Department Director-General Tomoyuki Kimura.

Asian Development Bank Warns 8 Nations Against Chinese Debt Trap via BRI Project

Kimura maintained that the Asian Development Bank was ready to support regional initiatives like the Belt and Road Initiative (BRI), also an initiative of the Chinese president. He stated that if the ADB found common objectives in any regional project including the BRI, it would readily finance such schemes.

The Asian Development Bank is dominated by Japan and the US, while China also has some influence. Nonetheless, Yang maintained that there were common objectives between CPEC and Central Asia Regional Economic Cooperation (CAREC).

She pointed out that it was high time to link economic corridors and other regional initiatives. Yang is a Chinese national. Yang further advised Pakistan to be watchful in handling the mega mainline-I project of the CPEC, which has an estimated cost of $8.2 billion.

“The ML-I is a very expensive mega project and the government needs to explore all possible ways to make sure that the project is financially sustainable,” said the country director. “ADB is aiding Pakistan in reviving the Pakistan Railways.”

To a question, Yang replied that the ADB was ready to provide policy loans to Pakistan but it needed the IMF assessment letter to dispatch these loans.

The ADB and the World Bank suspended Pakistan’s budgetary support due to deterioration in macroeconomic conditions. Yang shared that all the donors came together on the issue of economic stabilisation policies that are to be implemented by Pakistan and it was not only about the IMF.

CPEC Loan to Pakistan Soars to Whopping $62B; Repayment Extremely Challenging: ADB

The DG informed that the government has a broad-based commitment to structural reforms and the ADB would support these reforms through policy lending.

For the next three years, the Manila-based lender has proposed to provide $2.4 billion or 32% of the total loans for budgetary support to Pakistan. The DG backed the Pakistan Tehreek-e-Insaf (PTI) government’s stance on the privatisation of loss-making power distribution companies.

A long time ago, the donors pushed the privatisation policies but the ADB is now taking a different approach on this issue, said Kimura. Sometimes privatisation might be good but often it is very difficult to privatise loss-making enterprises due to their financial conditions, stressed the DG policy.

The country director said that the ADB was adopting a bottom-up approach on the privatisation of loss-making enterprises. She added that the power distribution companies have to be financially viable before these can be privatised.

She further highlighted that the ADB was working on an integrated energy policy to address Pakistan’s energy sector problems. A timeline is also being developed to address the issue of circular debt in the power sector.

Moving further, Kimura briefed about the ADB’s long-term strategic framework, the Strategy 2030, introduced in July. He said that the new strategy has been developed in light of evolving economic conditions in Asia and the Pacific region.

The strategy 2030 enables ADB to respond better to Pakistan’s transforming development needs, he added. The DG told the participants that ADB shared Pakistan’s vision to accelerate sustainable and inclusive economic growth by promoting innovative technologies and delivering development solutions through a mix of public and private sector operations.

“ADB supports Pakistan’s agenda of diversifying exports to revitalise the economy and generate jobs,” he emphasised. “The country needs to continue to improve key infrastructure, energy supply, domestic resource mobilisation and the cost of doing business to ensure higher levels of competitiveness and productivity, and to link up with the global production networks and value chains.”

He encouraged Pakistan to resolve structural impediments to economic development through reforms that revive and diversify exports for job creation. “Pakistan needs to improve skills and labour market efficiency, enhance financial inclusion and deepening, and promote greater infrastructure, investment, the private sector, foreign direct investment, and trade integration,” he quoted.

Under Strategy 2030, the ADB will focus on seven operational priorities aimed at addressing remaining poverty and reducing inequalities. The other pillars are accelerating progress in gender equality, tackling climate change, building climate and disaster resilience and enhancing environmental sustainability, making cities more liveable, promoting rural development and food security. Strengthening governance and institutional capacity and fostering regional cooperation and integration are also pillars of the new strategy.

Other Stories at EurAsian Times



Why Should Pakistan Be ‘Very Worried’ By India’s New Role At The UN Security Council?

India, which has begun its stint as a non-permanent member of the UN Security Council for 2021-22, will be chairing three key UN sanctions...

Indian Air Force Chief Compares LCA Tejas With Pakistani / Chinese JF-17 Thunder

Drawing a comparison between India's LCA Mk1A ‘Tejas’ and Pakistan's JF-17 fighters, Indian Air Chief Marshal RKS Bhadauria said that the Indian jets are...

After Russian S-400, India Inks Pact With The UK To Acquire STARStreak Air Defense System

The Indian Army has moved a step closer to acquiring the STARStreak air defense system as the British company Thales and India's Bharat Dynamics...

Turkey Inaugurates New Consulate Building In Pakistan’s Karachi

Turkish Foreign Minister Mevlut Cavusoglu on Thursday inaugurated the country’s new consulate building in Pakistan's commercial capital Karachi. Addressing the inauguration ceremony, Cavusoglu said the...

Vietnam Beats China, India to Become Next Manufacturing Hub: Reports

Vietnam has emerged as an attractive foreign direct investment (FDI) destination in Asia by beating China and India, a report by the Economist Intelligence...