MILAN:
The Asian Development Bank (ADB) has expressed concern about the increase in tensions between Pakistan and India, warning that instability in the region could hinder economic growth and disproportionately affect the poor and vulnerable.
“We expect peaceful resolutions in all regions, since the conflict finally harms the most vulnerable populations,” said the president of ADB, Masato Kanda, in response to a question by the Pakistani journalist, Aamir Ghauri, during an informative press session at the annual ADB meeting in Milan.
While avoiding direct comments about political conflicts, Kanda emphasized that the ADB is still committed to support the region through economic cooperation.
The declaration occurs in the midst of India’s decision to prohibit the importation of goods that originate or in transit through Pakistan, as well as prohibiting that Pakistani ships be coupled in their ports. The measure follows a deadly attack against tourists in the disputed Cashmiro region, which has intensified tensions between the two neighbors with nuclear weapons.
“ADB has supported peace and stability through economic cooperation, and we will continue to do so,” he said.
Answering a question of the Express PAkGazette about the possibility of a reduced interest rate for Pakistan after its qualification for an international monetary fund program (IMF), he said: “We maintain an independent research team that evaluates all available data. We have a very good relationship with international organizations, but we apply our own analysis.”
When asked about the reduced growth forecast for Asia in 2026, Kanda recognized the modest ADB projection of a 4.7% growth for emerging Asia, attributing the caution perspective to commercial interruptions and uncertainty in financial markets. “There may be more impact not only for commercial decrease but also instability in financial markets. It is not clear at this time,” he said.
In broader global challenges, Kanda described the current environment as possibly “the most difficult global environment since 1944–45”, as nationalism and fragmentation of trade volcany decades of progress promoted by globalization. He asked to reform international financial architecture to better serve developing countries, emphasizing the need to “improve the regime for the benefit of poor and vulnerable countries.”
From New Delhi, a journalist from Mint asked what India and other emerging economies should do to catch up with the nations developed by 2050. “The reforms to boost domestic demand, reduce inequality and open the economy are essential,” said the president of ADB. He emphasized the importance of private sector development to stimulate innovation and employment creation, while urging governments to invest in high quality and human capital infrastructure, including vocational training.
On the issue of migration and border controls in Western economies, and their effects on the remittances that Kanda said: “Remittances are sometimes the largest source of foreign currency for many countries. This has a huge impact on poor and vulnerable.” He added that, in principle, administered migration can be a “mutual benefit” for global productivity if it is handled properly, although it remains a politically sensitive issue.
In response to a consultation of economic times on defolarization, the head of ADB said that the US dollar remains dominant due to institutional confidence and liquidity, particularly the Federal Reserve. “Although its participation has decreased slightly in reserves, the dollar is still resistant,” he said, while urging countries to maintain confidence in their monetary policies and consider developments in digital currencies.
From Bangladesh, Financial Express asked about the strengthening of regional trade in Asia. Kanda emphasized the need for commercial harmonization, digitalization and customs modernization to boost interregional trade. “This crisis is an opportunity to diversify exports and deepen trade agreements,” he said.
He concluded reaffirming ADB’s commitment to the development objectives of southern Asia through inclusive growth, cooperation and strategic investment.
Increase of $ 26b for Asia-Pacific Food Security for 2030
The president of ADB also announced a wide expansion of $ 26 billion of its food security program in Asia and the Pacific, which raises the total planned investment to $ 40 billion by 2030.
When asked why the ADB is increasing its financing for food at this time since more and more countries are finding greater value for their respective economies through bilateral and private commitments in the sector, Kanda said that the measure responds to “one of the most serious problems for the population”: the increase in food prices, growing hunger and the risk of labor losses. “People are forced to choose between a meal for their families or transport their jobs,” he said.
Kanda, who assumed the position as the 11th President of the BAD in February of this year, said the initiative will channel $ 18.5 billion through governments and $ 7.5 billion through the private sector. “Access to food is critical in these uncertain times,” Kanda emphasized. “The agricultural and food sector uses 40% of the region’s workforce. Our support will help boost employment and increase the growth of agribusiness.”
He also warned that current food systems are degrading the environment. “Food occupies 70% of global water, 50% of habitable lands and causes 80% of biodiversity loss,” he said. “We need to change the way we produce food for a healthy planet, and we can’t wait.”
The expanded ADB support includes digital technology for farmers, soil restoration and a new natural capital fund of $ 150 million to support intelligent climate agriculture.
Asian American and economies
The president of ADB also discussed the challenges raised by US tariffs under the Trump administration, urging Asian economies to turn these uncertainties into opportunities. “Asian countries are more exposed to clashes, but they are stronger than in the past,” he said. Kanda pointed out the need for economic policies to “safeguard stability” and improve “regional connectivity.”
