KARACHI: The Asian Development Bank (ADB) on Tuesday announced a financial support package to help its developing member countries (DMCs) mitigate the economic and financial impacts resulting from the ongoing conflict in the Middle East.
The bank said it was closely monitoring global market developments and their potential implications for economies across Asia and the Pacific, particularly regarding energy price volatility, inflationary pressures and external account balances, amid US-Israeli war against Iran.
ADB analysis indicates disruptions to shipping routes have already increased costs and delivery times, while supply risks extend beyond energy to key industrial inputs such as petrochemicals and fertilizers, with serious implications for agriculture and food production, according to the bank.
Tourism- and remittance-dependent economies face compounding vulnerabilities beyond these initial shocks. Furthermore, the conflict is increasing uncertainty and tightening financial conditions across the region, putting pressure on currencies and capital flows.
“ADB will deliver rapid, flexible, and scalable assistance to help countries manage immediate pressures and strengthen long-term resilience, notably fast-disbursing budget support and trade and supply chain finance to secure the import of essential goods, now including oil,” ADB President Masato Kanda said in a statement.
“This builds on our strong track record of supporting Asia and the Pacific through periods of global uncertainty.”
Founded in 1966, ADB is a leading multilateral development bank supporting sustainable, inclusive, and resilient growth across Asia and the Pacific. It is owned by 69 members, including 50 from the region.
There are two main components to ADB’s intervention. The first is fast-disbursing budget support to help DMCs 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, according to the bank.
The second is ADB’s Trade and Supply Chain Finance Program (TSCFP), 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.
“ADB has begun discussions with all severely affected DMCs 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,” it said.
