Islamabad, October 1, 2008 (IANS)

The Asian Development Bank (ADB) has approved a $500 million loan for Pakistan to help the troubled nation tackle the increasing poverty and deteriorating economic conditions in the wake of the ongoing global financial crisis, the Online news agency reported Wednesday. The loan will help Pakistan in dealing with the current food and fuel price rise and resurrect the country's economic woes, Juan Miranda, director general of ADB's Central and West Asia Department, said while announcing the loan in Manila Tuesday.

"Addressing the impact of fuel and food price increases unleashes immediate benefits to Pakistan's people and to markets," Miranda said in a statement. "The ADB loan will support ongoing changes in the energy and agriculture sectors, and will help lay the foundation for a radical transformation of the economy by diversifying, deepening and expanding a competitive industrial sector, and creating much-needed jobs for Pakistan’s young and growing labour force."

According to the agency, the ADB support comprises a key part of a global financing plan underpinning the Pakistan's economic stabilisation programme. The stabilisation plan includes actions to shore up and manage foreign reserves, improve monetary policy, trim the fiscal deficit and its financing gap, and cut back on government borrowing from the State Bank of Pakistan.

The stabilisation plan is also focused on protecting the poor through special safety net programmes, and reassuring financial markets through fiscal and monetary discipline. The stabilisation plan was formulated by the government led by Prime Minister Yusaf Raza Gilani, with technical advice from other parties.

"ADB financing takes place within the context of this stabilization framework," added Miranda. "We are one of several parties contributing to the financing of this plan; others will soon follow with their own financing and programmes."

The Manila-based bank is a major financial partner of Pakistan and focuses on the areas of infrastructure development, power, energy, financial sector intermediation and capital markets development.