The Asian Development Bank (ADB) and global credit agency Moody’s have raised concerns over escalating tensions between Pakistan and India following the deadly April 22 terrorist attack in Pahalgam, Indian-administered Kashmir.
During the ADB’s 58th annual meeting in Milan, ADB President Masatsugu Asakawa emphasized the need for peace and political stability in South Asia, stating that sustainable development in the region hinges on regional cooperation and conflict resolution. While ADB avoids involvement in political disputes, Asakawa stressed the importance of dialogue and multilateral cooperation.
Tensions have intensified after India blamed Pakistan-based groups for the Pahalgam attack. Pakistan denied the allegations and called for an impartial international investigation. The situation worsened when India suspended the Indus Waters Treaty and Pakistan responded by canceling the Simla Agreement, cutting trade ties, and closing its airspace to Indian aircraft. Pakistan’s Information Minister confirmed readiness for any potential military escalation.
Moody’s warned that continued regional conflict could impact overall stability and development in South Asia. While India’s economy may remain largely unaffected due to limited trade exposure with Pakistan, the report noted that rising defense spending could affect India’s fiscal management.
ADB’s president also highlighted future regional challenges, including climate change, food security, and connectivity. He announced an additional $26 billion in agricultural funding over the next five years, aiming to bring the total to $40 billion by 2030, with 27% expected from private sector contributions.
Experts caution that if tensions persist, regional development efforts could suffer, ultimately affecting ordinary citizens the most.
