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Infrastructure financing by lending agencies

Infrastructure financing by lending agencies

According to the Asian Development Bank, it is exploring opportunities to fund development projects in various countries, including Pakistan, in collaboration with the Asia Infrastructure Investment Bank. The two giant financial organisations are already co-financing various projects, including construction of roads, clean energy as well as private-sector undertakings. The banks have so far co-financed infrastructure projects, one each in Pakistan, Bangladesh, Georgia and India with total loans of over $700 million. An ADB official claims the banks are cooperating and complementing each other rather than promoting any rivalry between them. The banks are also trying to enhance coordination and hold frequent meetings between their officials.

Unfortunately, instead of relying on the indigenous resources, the so-called developing countries like Pakistan always find solutions to their financial woes in loans and mortgage not only their economy but also independence to the lending agencies. The World Bank, the International Monetary Fund, Asian Development Bank and now the Asia Infrastructure Investment Bank are increasing their areas of influences by lending loans and grants to the poor nations. The loans are always attached with strings which the lending agencies use to recover the money. Practically, no country has so far achieved development with the help of foreign loans and the policymakers of Pakistan know this point pretty well. But it is yet to ascertain what made them to get into the loans programmes with various financial institutions.

The two banks are now joining hands to support each other in loan programmes and only way to exploit their policy is to involve them in the projects launched on Built, Operate and Transfer basis. If Pakistan starts a project of built-train from Lahore to Karachi, the two banks can be involved in the development of the infrastructure. But only getting loans in cash adding burden to the national economy is not plausible. The Asian Development Bank was set up around 50 years ago. Despite being one of its biggest client, none of the Pakistanis ever headed the bank. This is the worth of Pakistan and its economy in the comity of nations. The population of Pakistan is growing and thus emerging into a big consumer market. But the country is still far away from plans and policies which it desperately requires to boost business and the economy. On another note, the financial institutions are continuously doing homework to deal with the emerging situation.