INCHEON: The Asian Development Bank (ADB) has advised Pakistan to offer targeted subsidies to mitigate inflationary pressure on people, bring about necessary structural reforms and boost tax to GDP ratio to come out of existing chaos and uncertain and economic situations and steer the economy towards a sustainable growth trajectory.
In a joint interview with APP at the sidelines of ADB’s 56th Board of Governors meeting at Incheon South Korea, Director General, Central and West Asia Department Yevgeniy Zhukov and Country Director for Pakistan Resident Mission, Yong Ye, with one-voice, emphasised the significance of targeted subsidies to assist downtrodden segments of the society and effective mobilisation of domestic resources to assist improve the national economy which ADB predicted would grow at just 0.6 percent this year, coming down from last year’s 6 percent growth.
The IMF (International Monetary Fund) has also been pressing for the provision of targeted subsidies, which were very important, Yong Ye stressed to support BISP, improve its verification system and make the package more affordable for Pakistan by reaching to only the deserving people.
ADB Supports to Pakistan
Director General Yevgeniy Zhukov said the bank was in contact with the BISP since 2016 while it has provided support of $600 million since 2021 as conditional cash transfers in the areas of education and health besides $1.5 billion, under the Countercyclical assistance facility of the substantial part would be going through the same program to provide the much-needed support to the masses most affected by the ongoing situation.
Zhukov was of the view that the country should work on improving revenue collection as at present it has one of the lowest tax-to-GDP ratios standing at only 10 percent while there are states in the region having Tax to GDP ratio of about 20 to 25 percent.
Country Director Yong Ye said there was a mechanism to materialise and expedite the Geneva pledges being made with Pakistan after it faced catastrophic floods last year, adding that the next meeting of the Geneva conference was planned to be held by the end of this month while the countries who pledged would report progress, adding the core group including World Bank, European Union, ADB and United Nations could assist Pakistan monitor commitments made in July 2022.
Zhukov said that ADB was working with Pakistan and other development entities including World Bank and IMF, to help the government introduce major and basic structural reforms in various areas, including public finance management, energy sector reforms and domestic resource mobilization.
He further said the bank was keen on working with all partners and with the Pakistani government to ensure this reform agenda was taken forward. APP
