India red-flags $800 mn ADB aid package to Pak

New Delhi: India has vehemently opposed the Asian Development Bank’s (ADB) financial assistance of $800 million to Pakistan, raising concerns about the potential misuse of ADB resources, sources said.

India abstained from voting on the package at a recent Board meeting of the ADB. Indian officials cautioned the ADB on Pakistan’s rising defence expenditure, its declining tax-to-GDP ratio, and the lack of demonstrable progress on key macroeconomic reforms.

The ADB on Tuesday approved an $800 million programme to strengthen fiscal sustainability and improve public financial management in Pakistan.

In Islamabad, Pakistani Finance Minister Muhammad Aurangzeb’s advisor Khurram Schehzad confirmed the development. In a statement posted on social media, Schehzad said the ADB’s financial aid includes a $500 million programme-based guarantee and a $300 million policy-based loan.

Calling out the doublespeak of Pakistan in harbouring the terrorists and safeguarding the terror infrastructure in the country, sources added that New Delhi “expressed strong reservations about Pakistan’s existing governance system, which poses a continuing severe threat to regional peace and security.”

“India also highlighted that the economic fragility of the borrowing country (Pakistan) poses credit risks to the ADB too. Pakistan’s continued reliance on external debt raises concerns about the long-term sustainability of future exposures, especially in view of the high debt-to-GDP ratio and poor credit rating of the country. Therefore, India urged ADB to be vigilant to safeguard the bank’s financial health and long-term prospects,” sources also said.