ISLAMABAD: The Asian Development Bank (ADB) on Wednesday signed a $500 million loan agreement with Pakistan to support first phase of the Trade and Competitiveness Programme in the country.

The loan agreement was signed by Economic Affairs Division Secretary Noor Ahmed and ADB’s Country Director Xiaohong Yang. Minister for Economic Affairs Muhammad Hammad Azhar witnessed the loan signing ceremony and requested the ADB to further scale up its assistance to Pakistan both for programme lending and project financing.

The Trade and Competitiveness Programme is targeted to help Pakistan promote macroeconomic stability, improve export performance and boost economic growth by facilitating improved trade competitiveness, an official statement said.

Under this programme, the government has introduced important tariff and tax related policy reforms to support the country’s export sector and improve its competitiveness internationally and strengthen key institutions involved in facilitating trade, including accreditation bodies Export-Import Bank of Pakistan (EXIMBP) and the National Single Window.

Azhar appreciated the ADB’s support and pointed out that the country’s exports were concentrated in less sophisticated and value-added products and lacked diversification and innovations. He said the ADB’s policy-based lending will not only strengthen the foreign exchange reserves but will also provide fiscal space to the government and boost economic activities in the country.

Azhar promised that the government would remain fully committed to improve governance, bring economic reforms and achieve sustainable development. “The government aims to put Pakistan’s economy on the path of sustainable and balanced growth and increase per capita income”, he said and requested the ADB to further scale up its assistance to the country both for program lending and project financing.

Yang said the ADB was one of the leading development partners of the country and fully supported government’s vision and policies. She said the ADB was providing its support for policy reforms and project financing in the key priority areas such as energy, road, social sector, water and irrigation and urban services.

She also reiterated the ADB’s strong commitment to further strengthening and expanding its partnership with the country while adding that the policy lending would support reforms to improve trade competitiveness and exports as a defence against external shocks and to help finance the country’s trade deficit. The ADB also approved a $750,000 technical assistance package to support preparation and implementation of programme.

“ADB has a 53-year history of strong partnership with Pakistan and we are pleased to be in a position to provide this important support for the country’s economic reform program,” said ADB Vice-President Shixin Chen adding that “moving forward, ADB is committed to providing wide-ranging support to strengthen Pakistan’s economy and reduce the risk of external economic shocks.”

Supported by the International Monetary Fund, ADB, and other development partners, the government has now committed to a range of structural reforms to the country’s trade environment to improve its export performance, reduce the current account deficit, and drive economic growth.

“Trade is an important pillar in Pakistan’s overarching development objective to foster economic stability and sustainable high growth,” said ADB Director General for Central and West Asia Werner Liepach.

“The Trade and Competitiveness Programme will help define and implement key reforms to help tackle these development challenges and bring livelihood opportunities to the people of Pakistan.”

Published in Dawn, August 8th, 2019