By Staff Reporter
ISLAMABAD: The Asian Development Bank said on Tuesday it is launching a financial support package to help its developing member countries in Asia and the Pacific cushion the economic and financial fallout from the conflict in the Middle East.
President Masato Kanda said the bank will deliver rapid, flexible and scalable assistance to help countries manage immediate pressures and strengthen longer-term resilience, notably through fast-disbursing budget support and trade and supply chain finance to secure the import of essential goods, now including oil. The package builds on the lender’s track record of supporting the region through periods of global uncertainty, Kanda said in a statement.
The ADB has ample resources to safeguard existing and planned operations while expanding emergency support in line with member countries’ needs, including by utilizing its countercyclical lending buffer, the statement said. The bank is closely monitoring global market developments and their potential implications for economies across Asia and the Pacific, particularly energy price volatility, inflationary pressures and external account balances.
Its latest analysis indicates that disruptions to shipping routes have already increased costs and delivery times. Supply risks extend beyond energy to key industrial inputs such as petrochemicals and fertilizers, with serious implications for agriculture and food production, the statement said. Tourism- and remittance-dependent economies face compounding vulnerabilities beyond these initial shocks. The conflict is also increasing uncertainty and tightening financial conditions across the region, putting pressure on currencies and capital flows, it added.
The ADB said it is ready to deploy timely financial and technical support to help developing member countries manage risks, maintain macroeconomic stability and protect vulnerable populations. The intervention has two main components. The first is fast-disbursing budget support for countries facing heightened fiscal pressures, notably the use of the bank’s Countercyclical Support Facility to help governments stabilize their economies and mitigate the impact of shocks on the lives and livelihoods of those most at risk, the statement said.
The second is the Trade and Supply Chain Finance Programme, which supports the private sector to ensure critical imports—including energy and food—continue to flow. The bank has decided to reactivate support for oil imports under the program on an exceptional basis for this limited period, acknowledging that economies and people across the region are being severely affected by the rapid surge in oil prices and supply chain disruptions, it said.The ADB has begun discussions with all severely affected developing member countries on possible immediate support and will continue to work closely with governments, development partners and the private sector to ensure coordinated and effective responses to maintain economic stability and protect the poor and most vulnerable.
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