Pakistan secures $330m from ADB to expand poverty alleviation efforts

ISLAMABAD: The Asian Development Bank (ADB) has approved $330 million in additional financing to strengthen Pakistan’s federally administered social protection programmes and services.

According to the ADB’s announcement on Wednesday, the result-based loan for the ongoing Integrated Social Protection Development Programme (ISPDP) will expand grassroots-level social protection efforts to alleviate poverty among poor women and their families.

The programme aims to enhance the institutional capacity of the Benazir Income Support Programme (BISP), Pakistan’s flagship social protection agency, by transitioning to adaptive and climate-resilient social protection measures. This includes improving access to education for children and youth from impoverished families and increasing access to health services and nutrition supplies for beneficiaries in disaster-prone areas.

“This programme strengthens Pakistan’s efforts to improve human capital development and reduce intergenerational poverty, especially for women who are disproportionately affected during economic hardships,” said ADB Director General for Central and West Asia Yevgeniy Zhukov.

“ADB’s additional financing will boost the government’s ability to reach more of the poorest and most vulnerable in Pakistan.”

Initially approved in December 2021, the ISPDP includes a $600 million loan from ADB’s ordinary capital resources, a $3 million grant from the Asian Development Fund, and a $24.48 million co-financing grant from the Education Above All Foundation. The $627 million programme, implemented in 2022, has achieved significant milestones.

“The programme is performing well. It has increased access to primary and secondary education for children and adolescents from poor families and improved access to health services and nutrition supplies for women and adolescent girls,” said ADB Country Director for Pakistan, Emma Fan. “Steady progress has also been made in enhancing financial management, procurement practices, internal controls, and the information management system for BISP, which implements cash transfer programmes.”

Pakistan was a founding member of ADB, and since 1966, ADB has committed over $52 billion in public and private sector loans, grants, and other forms of financing to promote inclusive economic growth in the country. This has included improvements in infrastructure, energy and food security, transport networks, and social services.

The ongoing ISPDP aims to alleviate poverty among poor women and their families through three key outputs:

Strengthening institutional capacity for social protection and climate resilience.

Improving access to primary and secondary education for children and adolescents from underprivileged families.

Enhancing access to health services and nutrition supplies for women, adolescent girls, and children from poor families.

The additional $330 million in financing will expand the scope and coverage of the ISPDP, enabling BISP to deliver programmes and services at the grassroots level through an integrated system. It will support access to education pathways for children and youth from impoverished backgrounds and increase access to health services and nutrition for beneficiaries in disaster-prone areas, with a focus on improving poverty targeting.

Since the 1980s, Pakistan has experienced cyclical periods of high economic growth followed by crises. Periods of growth have often been characterised by disproportionately high import levels, while exports as a share of GDP declined from a peak of 17% in 1992 to 10% in 2023. This widening trade deficit has exerted pressure on foreign reserves, necessitating macroeconomic measures that slowed growth and reduced fiscal space for productive investments.

This cycle of boom and bust has hindered sustained economic and human capital development, with Pakistan’s human capital outcomes becoming more comparable to those of Sub-Saharan Africa than its South Asian peers, the ADB report said.