Insulted by World Bank, Pakistan seeks help from…and then…
Despite Pakistan’s claims of self-reliance and progress, the country continues to depend heavily on foreign assistance to sustain its economy. In a recent development, Pakistan secured a $330 million loan from the Asian Development Bank (ADB) under the Integrated Social Protection Development Program (ISPDP). The agreement was signed on Saturday by Kazim Niaz, Secretary of Economic Affairs, and Emma Fan, Country Director for ADB.
World Bank Refused Loan To Pakistan
Earlier, the World Bank had refused to extend financial support to Pakistan, citing unmet conditions and delays in fulfilling critical commitments. This refusal came as a blow to Pakistan’s hopes of securing a $500 million budget support loan. However, ADB stepped in to fill the gap, providing much-needed funds to help Pakistan strengthen its institutional capacity and improve access to essential services like education and healthcare.
How Will Pakistan Use the Loan?
ADB Country Director Emma Fan emphasized the bank’s commitment to assisting Pakistan in improving its social protection systems. The $330 million fund will be directed toward expanding healthcare services for the underprivileged. Skill development initiatives to empower the vulnerable sections of society will be taken. Poverty eradication programs to uplift the country’s struggling population will be conducted.
Why Did the World Bank Deny Support?
The World Bank’s decision to withhold more than $500 million in budgetary support was primarily due to Pakistan’s failure to meet key conditions, including amendments to Power Purchase Agreements under the China-Pakistan Economic Corridor (CPEC).
According to The Express Tribune, Pakistan missed deadlines for crucial reforms linked to CPEC projects, particularly in renegotiating agreements with power plants.
The World Bank also clarified that it would not extend any new budgetary loans to Pakistan during the current fiscal year, dashing hopes of an additional $2 billion in funding.
ADB’s Lifeline To Pakistan
For now, the ADB loan offers a lifeline to Pakistan’s fragile economy, enabling it to focus on critical areas like healthcare, education, and poverty alleviation. The assistance also underscores ADB’s role as a consistent partner for Pakistan, even as other international institutions like the World Bank tighten their purse strings due to the country’s inability to deliver on its commitments.