Asian Development Bank Sanctions $500 Million for Pakistan to Combat COVID-19
The Asian Development Bank (ADB) has approved a $500 million loan to support the Government of Pakistan in its efforts to provide social protection programs for the poor and vulnerable, expand healthcare services, and create an investor-friendly tax incentive to boost growth and jobs amidst the COVID-19 pandemic.
ADB’s Commitment to Supporting Pakistan
According to ADB President Masatsugu Asakawa, “The COVID-19 pandemic has hit Pakistan at a critical point in its ongoing stimulus package. We are determined to support Pakistan in this difficult time. This loan will help fill selected financing gaps in the implementation of its countercyclical development plan, including strengthening the country’s social security and healthcare system.”
The COVID-19 pandemic is expected to result in a significant growth slowdown, reduced income collection, and substantial job losses in Pakistan. The country’s health response is hampered by a limited number of healthcare workers compared to the population and insufficient availability of hospital beds.
ADB’s Active Response and Expenditure Program (CARES)
The CARES program will support several government initiatives, including:
- Cash payments to 3 million workers, of which approximately 23% are women
- Support to 7.5 million families under the social protection program, Kifalat
- Purchase of additional fans and COVID-19 protective kits for medical personnel, including personal protective equipment for women
- Support to young entrepreneurs, including at least 25% women, through the state-led youth entrepreneurship program, Kamyab Jawan
The CARES program will be supported by $500 million in parallel funding from the Asian Infrastructure Investment Bank and another $500 million from the World Bank’s Human Resource Development Development (SHIFT) program.
Financing and Collaboration
The loan will be financed through the COVID-19 Pandemic Response Option (CPRO) under ADB’s Countercyclical Assistance Facility. The CPRO was launched as part of ADB’s comprehensive $20 billion COVID-19 response to developing countries’ development assistance announced on April 13.
The CARES program has been developed in close collaboration with development partners, including the International Monetary Fund and other bilateral donors.
ADB’s Integrated Support Package
The CARES program is part of ADB’s Integrated Support Package to support the immediate efforts of the Pakistani government to mitigate the significant adverse health, social, and economic impacts of the COVID-19 pandemic.
On May 19, ADB approved a $300 million emergency assistance to support Pakistan’s response to the public health pandemic and meet the basic needs of vulnerable and impoverished populations. In March, ADB approved $2.5 million in grants to help Pakistan purchase personal protective equipment and other medical supplies.
On April 9, ADB rescheduled $30 million from the National Disaster Risk Management Fund (NDRMF) project, and the NDRMF Board of Directors provided another $20 million to purchase medical equipment to strengthen hospitals and other medical facilities in Pakistan.
Frequently Asked Questions
Here are some frequently asked questions about the ADB’s $500 million loan to Pakistan:
- What is the purpose of the loan? The loan is to support the Government of Pakistan in its efforts to provide social protection programs for the poor and vulnerable, expand healthcare services, and create an investor-friendly tax incentive to boost growth and jobs amidst the COVID-19 pandemic.
- How will the loan be used? The loan will be used to support several government initiatives, including cash payments to workers, support to families under the social protection program, purchase of medical equipment, and support to young entrepreneurs.
- How much funding will be provided by other development partners? The Asian Infrastructure Investment Bank and the World Bank will provide $500 million each in parallel funding.
