ADB approves $500m loan to support economic reforms

The Asian Development Bank (ADB) Wednesday approved a $500 million policy-based loan to support the government's reforms to improve trade competitiveness and exports as a defense against external shocks and to help finance the country's trade deficit.

ADB also approved a $750,000 technical assistance package to support the preparation and implementation of the program, said a press statement of the bank.

"ADB has a 53-year history of strong partnership with Pakistan and we are pleased to be in a position to provide this important support for the country's economic reform program," said ADB Vice-President Shixin Chen.

"The Trade and Competitiveness Program focuses on addressing structural issues obstructing Pakistan's export competitiveness through reforms in the areas of tax and tariff rationalization, as well as institutional strengthening," Chen added.

He said that, ADB was committed to providing wideranging support to strengthen Pakistan's economy and reduce the risk of external economic shocks.

Supported by the International Monetary Fund, ADB, and other development partners, the government has now committed to a range of structural reforms to the country's trade environment to improve its export performance, reduce the current account deficit, and drive economic growth, the statement added.

The Trade and Competitiveness Program will introduce important tariff and tax-related policy reforms to support Pakistan's export industries and increase their competitiveness internationally and also to strengthen key trade facilitating institutions such as accreditation bodies, the EXIM Bank of Pakistan, and the National Single Window.

"Trade is an important pillar in Pakistan's overarching development objective to foster economic stability and sustainable high growth," said ADB Director General for Central and West Asia Werner Liepach.

"The Trade and Competitiveness Program will help define and implement key reforms to help tackle these development challenges and bring livelihood opportunities to the people of Pakistan," Liepach added.

Meanwhile, Federal Minister for Economic Affairs Division Hammad Azhar expressed the hope that the proceeds of this facility will boost foreign exchange built up and give much needed budgetary support to government of Pakistan.

The minister tweeted that more significantly, budgetary support program from a long term development partner i.e ADB has been restored after a gap of more than 2 years.

"I am thankful to ADB and it's President for their support and reposing confidence in the present Govt's reform agenda," he added.