Pakistan urges ADB to ease exposure limits, scale up financing for high-need economies

Pakistan has called on the Asian Development Bank (ADB) to review its lending policies, warning that tighter country exposure limits could constrain financing for economies with high development needs.

According to a news report, the position was conveyed by Noor Ahmed, Executive Director at ADB and Temporary Alternate Governor, during the bank’s 59th annual meeting. He represented Pakistan in the absence of Governor Ahad Khan Cheema and Alternate Governor Muhammad Humair Karim, who did not attend under austerity measures.

Ahmed said the 2023 Capital Adequacy Framework review created additional lending capacity of $100 billion over the next decade, but the introduction of country exposure limits has made lending more conservative, particularly for low-income and high-concentration countries.

He noted that these limits are largely tied to sovereign risk ratings, with limited consideration for factors such as population size, economic scale and poverty levels. As a result, several developing member countries are approaching their exposure ceilings, which could affect future ADB financing.

Pakistan urged the bank to adjust these limits in the ongoing review and expand private sector operations to ensure continued access to funding.

Ahmed said the region is facing renewed economic pressure due to the Middle East conflict, which has disrupted energy supplies and trade flows while increasing transport costs and inflation. He added that these external shocks are placing strain on fiscal and external balances, particularly in import-dependent economies.

He emphasised that timely and scaled-up support from development partners, including ADB, is needed to mitigate the impact of these challenges.

Ahmed also said Pakistan is pursuing diplomatic efforts to support de-escalation between the United States and Iran, highlighting the country’s focus on regional stability.

He added that Pakistan is implementing a stabilization and reform programme focused on fiscal consolidation, energy sector efficiency, governance of state-owned enterprises, and improvements in trade and investment.

The government has also advanced its privatisation agenda, including developments related to Pakistan International Airlines Corporation Limited, while continuing coordination with international partners such as the IMF, World Bank and ADB.