India's Opposition to ADB's Financial Assistance to Pakistan
India has expressed strong objections to the Asian Development Bank's (ADB) decision to provide $800 million in financial assistance to Pakistan, citing concerns over the potential misuse of funds. At a recent ADB Board meeting, India abstained from voting on this matter.
Concerns Raised by India
- Increased Defence Expenditure: India highlighted Pakistan's rise in defense spending amid a declining tax-to-GDP ratio.
- Lack of Macroeconomic Reforms: Indian officials emphasized that if previous programs by ADB and IMF had been effective, Pakistan wouldn't need a 24th IMF bailout.
- Security Concerns: The Pahalgam terror attack and Pakistan's cross-border terrorism policies have heightened regional security tensions.
- Financial Action Task Force (FATF) Compliance: India pointed out Pakistan's inadequate progress on terrorist financing investigations and actions against UN-designated terrorist groups.
India's Expectations
- Monitoring: India expects ADB to closely monitor policy implementation in Pakistan to ensure intended outcomes are achieved.
- Dependency Concerns: Relying on external support undermines local ownership, creating dependency cycles.
- Ring-fencing Funds: India urged ADB to safeguard financing to prevent misuse.
Statistics and Economic Indicators
- Tax-to-GDP Ratio Decline: From 13% in FY18 to 9.2% in FY23.
- Defense Spending Increase: Notable rise in defense expenditure during the same period.
India's Diplomatic Engagements
- Finance Minister met with ADB President Masato Kanda to seek support for integrated rural prosperity initiatives.
- Kanda also met Prime Minister, expressing support for India’s vision of a "Viksit Bharat" by 2047.