ADB supports developing countries in importing oil amid Middle East conflict

The Asian Development Bank (ADB) has confirmed that oil is one of the essential commodities whose imports must be secured so that developing economies can cope with the pressures of conflict.

On March 24, the Asian Development Bank (ADB) announced a financial support package aimed at helping developing member countries mitigate the economic and financial impacts of the conflict in the Middle East, amid rising risks to energy, inflation, and supply chain disruptions.

The ADB's Developing Countries (DMCs) comprise approximately 50 economies in the Asia- Pacific region, including Viet Nam.

According to ADB President Masato Kanda, the organization will deploy "rapid, flexible and scalable" support to help economies handle short-term pressures while strengthening long-term resilience.

The focus is on fast-tracking budgetary support, along with trade and supply chain financing, to ensure imports of essential goods, including oil.
ADB stated that it maintains sufficient resources to both protect ongoing programs and expand emergency support tailored to individual country needs, including the use of counter-cyclical lending buffers.

The latest analysis by the ADB shows that conflicts in the Middle East are increasing costs and prolonging shipping times due to disruptions on maritime routes. Supply risks are not limited to energy but extend to critical inputs such as petrochemicals and fertilizers, thereby putting pressure on agricultural production and food security.

Economies that rely on tourism and remittances are considered the most vulnerable, facing a "double shock" from declining external demand and rising import costs.

According to the analysis, the conflict is also increasing instability and tightening financial conditions across the region, putting pressure on currencies and capital flows.

The ADB's support package consists of two main components. The first is fast-tracking budgetary support, which includes the use of countercyclical support mechanisms to help governments mitigate the impact of economic shocks on people's lives, especially vulnerable groups.
Secondly, there is the Trade and Supply Chain Finance Program (TSCFP), which aims to support the private sector in maintaining the flow of imports of essential goods.

The ADB also decided to reactivate support for oil imports under this program on a special and time-limited basis, in response to the rapid rise in oil prices and the risk of supply disruptions.

As part of this support package, ADB has begun working with hard-hit countries to identify urgent support needs, while coordinating with development partners and the private sector to ensure a synchronized policy response.

Source: TuoiTre