The Asian Development Bank (ADB) has backed away from funding the CPEC projects. It has linked the budget support to Pakistan with the International Monetary Fund’s (IMF) economic health certificate.
The ADB Strategy, Policy and Review Department Director-General Tomoyuki Kimura said that ADB cannot take part in bilateral projects like CPEC. On a two-day visit to Pakistan, Kimura said that ADB is a global financing institution, and cannot play a role in China Pakistan EconomicCorridor. At the press conference, the ADB Country Director Xiaohong Yang was also present.
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The DG said that ADB was prepared to support the local initiatives like Belt and Road Initiative (BRI). Basically ADB is dominated by Japanese and Americans while Chinese also have some influence on it.
Yang said that CPEC and Central Asia Regional Economic Cooperation (CAREC) has common objectives. She said that it is important toconnect the economic corridors with the regional initiatives. Furthermore she advisedPakistan to be careful while handling the $8.2 billion CPEC mainline-I project
She said, “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. ADB is aiding Pakistan in reviving the Pakistan Railways.”
Yang said that ADB is willing to give loans to Pakistan but IMF assessment letter is needed for these loans.
Due to deteriorating macroeconomic conditions, ADB and World Bank have suspended the budgetary support to Pakistan.
Kimura said, “ADB supports Pakistan’s agenda of diversifying exports to revitalise the economy and generate jobs. The country needs to continue to improve key infrastructure, energy supply, domestic resource mobilization 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.”
Adding, “Pakistan needs to improve skills and labour market efficiency, enhance financial inclusion and deepening, and promote greater infrastructure, investment, private sector, foreign direct investment, and trade integration.”