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Express Tribune
06-05-2025
- Business
- Express Tribune
ADB warns against long-term protectionism
Listen to article The Asian Development Bank (ADB)'s Chief Economist, Albert Park, has expressed support for Pakistan's efforts to successfully complete its International Monetary Fund (IMF) Extended Fund Facility (EFF), noting that such a move would likely enhance Pakistan's standing with other international lenders, including the ADB itself. However, he warned that any hopes of a sharp drop in interest rates purely due to an IMF qualification may be unrealistic. Responding to questions from The Express Tribune on the sidelines of the ADB's 58th Annual Meeting in Italy, the bank's chief economist said that an IMF deal acts as a "signal" of macroeconomic discipline and stability. "If the IMF comes to an agreement with Pakistan, that's important for the ADB. It means we feel Pakistan is more fiscally sound," the official explained. However, they added that while such agreements impact lending confidence, they do not automatically translate into lower interest rates from multilateral agencies like the ADB. ADB lending decisions, he noted, are primarily based on a country's level of development and debt sustainability. "We don't want to lend to countries with unsustainable debt burden. But once there is a reform agreement in place, it opens up avenues for deeper engagement," the official said. The ADB also weighed in on the ongoing debate in Pakistan about whether it should pursue protectionist industrial policies to shield local industriesat least in the short termbefore liberalising trade. Addressing this, the official said that while historical examples exist of countries like Japan, India and South Korea using temporary protectionism during their early industrial phases, in many cases such protection becomes entrenched. "In theory, temporary protection might help an industry grow, but in practice, protections often become permanent due to vested political interests," Park warned. "That leads to inefficiencies and higher costs, especially in today's globalised world where foreign direct investment depends on openness and predictability." Instead, ADB official stressed that Pakistan and other South Asian economies, including India and Bangladesh, should focus on boosting exports, improving ease of doing business, and attracting foreign investment. Trade liberalisation and participation in global value chains were identified as long-term strategies for sustained economic growth. On India, He said the country is well-positioned to benefit from shifting global supply chains, especially post-COVID. However, India needs to address infrastructure bottlenecks, reduce trade barriers, and improve its regulatory environment. "India remains relatively protectionist," said Park, cautioning that high tariffs on intermediate goods could make domestic industries less competitive globally. In Bangladesh's case, officials noted that the country's slow integration into regional and multilateral trade blocs— such as ASEAN and RCEPlimits its export diversification potential. Currently, Bangladesh has only one bilateral trade pact, a preferential trade agreement (PTA) with Bhutan. ADB attributed this hesitation to fears of heightened competition, but stressed that greater openness could lead to long-term benefits. The ADB also flagged growing concerns over escalating trade tensions globally, particularly involving the United States and China. The bank's April outlook forecasted Asia's growth at 4.9% this year and 4.7% for 2026, admitting that those figures did not account for recent reciprocal tariffs announced by Washington. "The uncertainty itself is harming investment and production across Asia," the official said. "Increased volatility, especially from shifting trade policies, has led to a slowdown in manufacturing and weakened business confidence."
Hans India
06-05-2025
- Business
- Hans India
ADB vows total support to India
New Delhi: Asian Development Bank (ADB) President Masato Kanda, in his meeting with Union Finance Minister Nirmala Sitharaman, has expressed the Bank's full support to India's development priorities, guided by Prime Minister Narendra Modi's vision of Viksit Bharat 2047, the Finance Ministry said on Monday. FM Sitharaman also reiterated that India focuses on private sector-led economic growth and has been consistently creating a conducive policy and regulatory ecosystem. The Finance Minister is leading an Indian delegation from the Department of Economic Affairs of the Ministry to attend the 58th Annual Meeting of the Board of Governors of the ADB in Italy's Milan from May 4 to 7. In a post on social media platform X, the ministry said that she met ADB President Kanda in Milan.
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Business Standard
06-05-2025
- Business
- Business Standard
No Pakistan-related issues discussed: ADB on meeting with FM Sitharaman
The Asian Development Bank on Monday said that issues related to Pakistan were not discussed during the bilateral meeting with ADB President Masato Kanda and Finance Minister Nirmala Sitharaman. "The Asian Development Bank (ADB) is aware of media reports claiming that issues related to Pakistan were discussed during the bilateral meeting between ADB President Masato Kanda and Indian Finance Minister Nirmala Sitharaman on the sidelines of the 58th ADB Annual Meeting in Milan, Italy," said the multilateral development bank as per an official release. Finance and Corporate Affairs Minister Nirmala Sitharaman on Monday met ADB President Masato Kanda and Italian Finance Minister Giancarlo Giorgetti on Monday and talked about the initiatives India is taking to foster economic growth. Finance Ministry officials also said that there was no discussion on issues related to Pakistan with ADB President and the Italian Finance Minister. In her meeting with Masato Kanda during the 58th ADB Annual Meeting in Milan, Sitharaman reiterated that India focuses on private sector-led economic growth and has been consistently creating a conducive policy ecosystem through bold initiatives. Tensions have risen between India and Pakistan following the Pahalgam terror attack. The government has said that perpetrators will face severe punishment. FM Sitharaman is in Milan to attend the 58th Annual Meeting of the Board of Governors of the Asian Development Bank (ADB), scheduled to take place in Milan, Italy, from May 4 to 7, 2025.
Express Tribune
05-05-2025
- Business
- Express Tribune
Pak seeks stronger ADB support
Pakistan andtr India laid out contrasting yet complementary visions at the 58th Annual Meeting of the Asian Development Bank (ADB) in Milan, on Monday, with India focusing on digital transformation and long-term development, and Pakistan calling for stronger support to sustain its economic recovery amid structural reforms. Contrary to claims made by some Indian media outlets that the Indian Finance Minister, Nirmala Sitharaman, called on the ADB to stop lending to Pakistan, India emphasised its roadmap to becoming a developed nation by 2047, under the "Vikasit Bharat" mission led by Prime Minister Narendra Modi. The Indian delegation lauded the ADB president's client-centric, agile approach and welcomed the bank's capital adequacy reforms and new targets under ADB's Strategy 2030. Notably, India highlighted its progress in bridging the digital divide through initiatives like Digital India, which their finance minister said reshaped education, healthcare, governance, and financial services. "It's an old adage that time is money. It holds relevance even today. Process reforms for reduction in processing time, both for sovereign and non-sovereign operations, shall benefit the developing member countries significantly," suggested Indian Finance Minister, Nirmala Sitharaman. Meanwhile, Pakistan, whose Federal Minister of Economic Affairs Ahad Cheema was absent, underscored the need for greater aid effectiveness and a merit-based, transparent approach to development financing. The country warned that despite a macroeconomic turnaround driven by International Monetary Fund (IMF), World Bank and ADB-backed reforms, it remains vulnerable to debt burdens, climate shocks, and limited fiscal space. "Fragile economies continue to grapple with daunting levels of debt servicing, shrinking trade possibilities, costly climate events and persistent poverty levels. Pakistan is no exception to these challenges," said Dr Kazim Niaz, Secretary for the Ministry of Economic Affairs and Pakistan's temporary-Governor for ADB. "Resource availability is shrinking due to competing priorities. We strongly advocate renewed focus on synergies and institutional integrity in aid delivery," he said. Acknowledging ADB as a trusted partner, Pakistan urged the bank to increase both financial and technical assistance, especially in finalising a long-term Country Partnership Framework tailored to national and sub-national development needs. Pakistan also pushed for greater private sector engagement and policy-based lending, alongside structured collaboration among multilateral partners like the World Bank. Voicing a similar call from many other countries including the United States and United Kingdom, Niaz said, "We expect ADB to step up its efforts to promote private sector activities and enhancing the footprint of private sector operations." US-China standoff Tensions also flared as the United States and China exchanged pointed remarks over the institution's priorities and lending policies. The US representative, in a sharp address, welcomed the ADB President Masato Kanda but warned that the bank was straying from its core mission. The US urged the ADB to refocus on poverty reduction and private sector-led, job-rich growth, and to stop what it termed "coercive and opaque lending" practices by other creditors. Calling for greater efficiency, the US demanded a firmer implementation of the bank's graduation policy, explicitly naming the People's Republic of China. "Concrete steps must be taken to put China on a clear path to graduation," the US governor declared, arguing that higher-income countries with access to global financing no longer require ADB loans. This mimics a call made just weeks ago by the US Treasury Secretary Scott Bessent, who had also urged the ADB president to take concrete steps towards ending loans to China and financing civilian nuclear energy. In a strong rebuttal, China's representative slammed the US position, calling it "unacceptable" and contrary to ADB rules. China insisted that it remains the world's largest developing country and has not met the criteria for graduation under ADB's own assessments. "China is not just a borrower but also a major contributor," the Chinese official said, highlighting the country's 30% share in recent global growth. Beijing urged the ADB to uphold multilateralism, resist politicisation, and continue financing climate goals and technological innovation. ADB appoints new chair Member countries' governors approved a sweeping set of recommendations, including key financial reports, budget updates, and the 2027 annual meeting schedule. Uzbekistan was elected Chair of the Board of Governors for 202526, with Norway and Thailand named Vice-Chairs. Newly appointed ADB President Masato Kanda delivered his first annual address, warning of mounting challenges across Asiaincluding geopolitical tensions, debt burdens, and economic uncertaintythreatening hard-won development gains. He reaffirmed ADB's commitment to support vulnerable member countries with expanded financing, crisis-response tools, and policy coordination. Kanda announced that recent capital management reforms have boosted the ADB's lending capacity by $100 billion over the next decade, allowing a 50% scale-up in operations.
Economic Times
05-05-2025
- Business
- Economic Times
India demands Italy cut financing to Pakistan
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel India has demanded that the Italian government cut the financing to Pakistan, as New Delhi continues to extend its punitive moves against Islamabad in the aftermath of the Pahalgam terror attack Sources told that the demand was made at a meeting between Finance Minister Nirmala Sitharaman and her Italian counterpart Giancarlo Giorgetti , on the sidelines of the 58th ADB Annual Meeting in Italian city of per United Nations Development Programme website, the Italian Development Cooperation is an essential UNDP partner in Pakistan and across the world. "Some of Italy's major initiatives and contributions are in Pakistan," UNDP website a separate meeting with the Asian Development Bank (ADB), India has demanded that the regional development bank cut funding for has sharply downgraded diplomatic ties with Pakistan after the April 22 terrorist attack on tourists in Jammu and Kashmir's Pahalgam, leading to the death of 26 individuals and several other injured, mostly suspended the Indus Waters Treaty of 1960, which would over a period of time will severely reduce Pakistan's water sources told ANI that India will also approach FATF (Financial Action Task Force) to include Pakistan in the grey is leading the Indian delegation of officials from the Department of Economic Affairs, Ministry of Finance for the 58th Annual Meeting of the Board of Governors of Asian Development Bank (ADB), scheduled from May 4 to 7 in to an official statement from the Ministry of Finance, the meetings will be attended by official delegations of the Board of Governors of ADB, official delegations of ADB members and international financial institutions. The Union Finance Minister will participate in the Annual Meeting's focal events like the Governors' Business session, Governor's Plenary Session and as a panelist in the ADB Governors' Seminar on "Cross-Border Collaboration for Future Resilience".
