ISLAMABAD: The Asian Development Bank (ADB) has approved a $500 million loan to Pakistan for social protection, health and fiscal stimulus for growth and job creation.

In a statement, the ADB said the loan would deliver social protection programmes to the poor and vulnerable, expand health sector capabilities, and deliver a pro-poor fiscal stimulus to boost growth and create jobs as the country fights the novel coronavirus.

“The Covid-19 pandemic hit Pakistan at a critical point in its ongoing economic recovery programme,” said ADB President Masatsugu Asakawa. “We are fully committed to supporting Pakistan through this difficult period. This loan will help plug selected funding gaps as the government implements its countercyclical development plan, including strengthening the country’s social safety net and health sector capacity.”

The virus is expected to lead to a sharp decline in growth, revenue collection, and significant job losses in Pakistan. The country’s health response is hampered by a low number of health workers relative to the population and inadequate availability of hospital beds.

The ADB’s Covid-19 Active Response and Expenditure Support (CARES) programme will support various government initiatives, including cash assistance payments to three million daily wage workers, of whom approximately 23pc are women, and cash grants to 7.5m families under the Kifalat social protection scheme.

It will also help fund the acquisition of additional ventilators and Covid-19 protective kits for medical staff, including appropriately sized personal protective equipment for women. To prevent job losses, the loan will support young entrepreneurs, including at least 25 per cent women, through the government’s youth entrepreneur scheme, Kamyab Jawan.

ADB’s CARES Programme will facilitate parallel financing of $500m from the Asian Infrastructure Investment Bank and another $500m from the World Bank’s Securing Human Investments to Foster Transformation (SHIFT) development policy credit scheme.

The loan is funded through the Covid-19 pandemic response option (CPRO) under ADB’s Countercyclical Support Facility. CPRO was established as part of the lender’s $20 billion expanded assistance for developing member countries’ pandemic response, announced on April 13.

The CARES programme is part of ADB’s integrated package of support to help the government’s immediate efforts to mitigate the significant negative health, social, and economic impacts of Covid-19. On May 19, the lender approved a $300m emergency assistance loan to strengthen Pakistan’s public health response to the pandemic and help meet the basic needs of vulnerable and poor segments of society.

On April 9, the ADB reallocated $30m from the National Disaster Risk Management Fund (NDRMF) project whose board of directors allocated an additional $20m to procure medical equipment to strengthen hospitals, and other medical facilities in Pakistan. In March, the bank also approved $2.5m in grants to help Pakistan purchase PPE and other medical supplies.

Published in Dawn, June 11th, 2020