It is not surprising that Asian Development Bank (ADB) has refused to finance the CPEC projects. The reason is simple. The western powers are not happy with CPEC. These powers have significant influence in the international financial institutions. The Asian Development Bank (ADB) said that it would not finance CPEC projects, saying that the bank is an international financial institution and since the CPEC is a bilateral initiative, ADB cannot become part of it. This was stated by Tomoyuki Kimura, Director-General for ADB Strategy, Policy and Review Department while talking with journalists.
The lending agency also linked its budgetary support to a good economic health certificate from the International Monetary Fund (IMF). However, the ADB official said that the bank was ready to support regional initiatives like the Belt and Road Initiative (BRI), also a brainchild of the Chinese president. If the bank finds common objectives in any regional project including the BRI, it will extend financing.
ADB’s country director Yang maintained that there were common objectives between CPEC and Central Asia Regional Economic Cooperation (CAREC).She called for linking economic corridors and other regional initiatives. Yang further urged Pakistan to be watchful in handling the mega mainline-I project of the CPEC, which has an estimated cost of $8.2 billion.
The ML-1 is a very expensive mega project and the government needs to explore all possible ways to make sure that the project is financially sustainable,” said the country director.
The ADB and the World Bank suspended Pakistan’s budgetary support due to deterioration in macroeconomic conditions. Yang shared that all the donors came together on the issue of economic stabilization policies that are to be implemented by Pakistan and it was not only about the IMF.
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17 November, 2019