In 2022, Pakistan will get the most funding for programs and projects from the Asian Development Bank (ADB), according to Pakistan Today.
According to the ADB Annual Report 2022, which was published on Monday, Pakistan got loans of USD 5.58 billion out of a total payout of USD 31.8 billion to 40 countries.
Pakistan is experiencing a severe economic crisis, and last year, Pakistan received USD 2.67 billion in concessional finance from the bank out of a total loan amount of USD 5.58 billion.
However, Pakistan has avoided default by using these loans. According to Pakistan Today, these loans were contingent upon Pakistan receiving loans from the IMF, which placed its own conditions.
One problem has been that loans have not been used to fund initiatives that may generate income and help repay the loans.
One problem has been that loans haven’t been used to fund initiatives that may generate income and pay off the loans; instead, debt has recently been taken on to pay off prior debt.
The goal is to prevent Pakistan from defaulting and maintain unrestricted access to international financial markets. For further borrowing to cover loan repayments, that access is required.
As Pakistan was also hit by devastating floods that killed more than 1,700 people, directly impacted 33 million people, caused billions of dollars in damages, and exacerbated an already precarious economic situation, the report highlighted the area’s vulnerability to climate change.
The fact that no one appears to have a solid solution to the issue is one of the situation’s most concerning features. It is obvious that one reason for the debt was incurred, despite the fact that theft and corruption also played a part.
Pakistan turned to bilateral assistance from friendly nations in the event that multilateral organizations like the IMF and ADB withdrew. Even those nations now seem to be fed up with pouring more money into what seems to be a bottomless hole and have linked aid to IMF contributions.
Furthermore, the Pakistani Parliament has been so obstinate in asserting its authority in financial matters that it now controls all borrowing.
Foreign borrowing is viewed as a problem with foreign relations, and Parliament is instructed not to worry about it. despite the fact that it will have to spend a lot of money to pay off the debt, according to Pakistan Today.
Meanwhile, the ensuing economic chaos in Pakistan is being caused by political instability and military meddling.