Asian Development Bank’s president says damage could be manageable if the ongoing protests are resolved soon.
Asian Development Bank President Takehiko Nakao warned on Wednesday that an ongoing political impasse could damage Pakistan’s recently stabilized economy, as the country’s finance minister said Islamabad would miss its growth target due to recent floods.
Speaking at a joint press conference, Nakao and finance minister Ishaq Dar praised the government of Prime Minister Nawaz Sharif for improving the macro-economic outlook and pursuing a liberalization agenda.
“Today we are seeing the growth rate is picking up, the inflation rate is becoming more managed, and foreign reserve [has picked up]—and the exchange rate is becoming stabilized so it is really a remarkable achievement by the government,” he said. “What is important is the … continuation of democracy. I am so glad to see the peaceful and democratic transition of government last year,” he added.
Last year’s general elections were the first time a civilian government handed over power to another in Pakistan. But protesters led by cricketer-turned-politician Imran Khan and populist cleric Tahir-ul-Qadri have camped outside Parliament for nearly a month demanding Sharif resign, alleging he rigged the polls, which local and foreign observers rated as credible.
Pakistan’s government has said the crisis has cost the exchequer billions of rupees and deterred foreign investment after ratings agency Moody’s upgraded the country’s outlook from negative to stable.
Speaking to AFP, Nakao said: “It’s a very difficult to tell what should be the impact of this political impasse. We don’t have any estimate about it. If it prolongs there is more damage and if it is solved quickly the damage will be more managed.”
Nakao added that the bank, which is set to provide $5 billion to Pakistan over the next five years in assistance particularly in energy and infrastructure sector, would extend flood relief to the country after an assessment report was completed.
At least 296 people have died in this year’s flooding, which has also damaged 2.2 million acres of farmland in the breadbasket Punjab. Dar said the damage would affect Pakistan’s growth target of five percent for the fiscal. “It will have a bearing on our GDP, we have a major agricultural loss in Punjab. We have budgeted for and projected [growth] at five percent,” he said.