The Asian Development Bank (ADB) has endorsed a new 5-year country partnership strategy (CPS) to help restore economic stability and growth in Pakistan by enhancing people’s well-being and expanding economic opportunities as the country works to overcome the Covid-19 pandemic, according to a report published by the regional development bank on Wednesday.
According to the report, the pandemic has interrupted the macroeconomic recovery in Pakistan, resulting in a sharp contraction in growth, a rise in public expenditures, and a loosening of monetary policy to mitigate the health and economic impacts.
“As with many countries in the region, Covid-19 has affected Pakistan, revealing the extent to which the population is exposed to economic and social vulnerabilities,” said ADB Director General for Central and West Asia Eugene Zhukov. “The new CPS 2021–2025 will build greater resilience of the population and help tackle Pakistan’s persistent structural challenges.”
The report states that ADB’s assistance would prioritise support for three interlinked pillars: improving economic management, building resilience through human capital development and social protection, and boosting competitiveness and private sector development.
In this regard, ADB has committed to supporting macroeconomic stabilisation in Pakistan and maintain support for reforms to improve the country’s trade prospects and external positions whereas it will also continue to help improve the energy sector through reforms and sovereign and nonsovereign investments, and also continue deepening and diversifying Pakistan’s financial markets to promote investment, growth, and private sector development.
Under the CPS, ADB will expand investments and help accelerate reforms in secondary education and technical and vocational education and training. ADB will address the challenge of out-of-school children and target children from poor and vulnerable households, bolster evidence-based policy formulation through a newly established policy research unit, improve health care and continue to help manage public health issues, including the Covid-19 pandemic.
To boost competitiveness and private sector development, ADB will focus on building livable cities, promoting renewable energy and energy efficiency, and investing in rural infrastructure. ADB will seek to strengthen agricultural value chains, improve connectivity, and increase access to finance.
“The government has expressed its strong commitment to the ongoing International Monetary Fund Extended Fund Facility programme,” said ADB Country Director for Pakistan Xiaohong Yang. “The CPS places a strong focus on combining reforms with physical and social investments to improve sustainability and generate lasting development impact.”
ADB will play a pivotal role in supporting Pakistan to attract private sector investment in renewable energy, small and medium-sized enterprises, trade, and supply chain finance. Through its recently issued local currency Karakoram bonds, ADB expects to expand opportunities for financing priority sector projects in which the bank was not previously present, including agribusiness and social sectors.
In addition, ADB will explore more public-private partnership opportunities for Pakistan.
It will continue to promote women’s economic empowerment and enhance women’s resilience to external shocks. The bank aims to increase women’s access to financial services, raise women’s skills and education levels, and bolster social protection under the Ehsaas Kafalat programme.
Moreover, it will continue to boost Pakistan’s resilience to climate change and strengthen adaptation and disaster risk management.
Under the Central Asia Regional Economic Cooperation Programme, the bank will continue to promote regional connectivity and trade with Pakistan’s neighbours by developing economic corridors and improving border crossings. This will facilitate cross-border trade and supply-chain efficiency by simplifying customs procedures and setting up a Pakistan single window.