Imf and Its Effect on Pakistan's Economy

TERM PAPER: IMF AND ITS EFFECT ON PAKISTAN'S ECONOMY

Submission: 23rd April'2009

TABLE OF CONTENTS

Executive Summary 4

Background 5

Prolonged use of IMF resources 6

Reasons to approach IMF 7

History 8

Lending arrangements 9

Extended Fund Facility 1980 9

Late 1980s and 1990s 10

Stand-By Agreement 2000 13

Poverty Reduction and Growth Facility 2001-2004 16

Stand-By Agreement 2008 18

Macro-economic Analysis 20

Other social costs 21

Irrationality on part of IMF 23

Failed IMF goals and conditionalities 27

Cancelling effect of conditionalities 28

Adverse side effects of some policies 28

Lack of institutional reforms 29

Reasons leading Pakistan to IMF 30

Long term solution plan 31

SOME OTHER COUNTRIES WHO TOOK IMF PROGRAMS 34

Argentina: 34

Russia 36

India 37

Senegal 38

Countries that have exited IMF programs 40

Morocco 40

Jamaica 41

END 41

EXECUTIVE SUMMARY

This Term Paper has been prepared for the course: Management and Organization of Pakistan's Economy. The topic of this Term Paper is: International Monetary Fund and its effect on Pakistan's economy. This paper begins with introducing the IMF (International Monetary Fund) and explains its philosophy of existence. Next it talks about the prolonged use of IMF's resources and discusses the reasons why countries have to knock on IMF's door for financial assistance.

The next section of this Term Paper talks about IMF and its role in Pakistan. Here, we discuss the various time periods when Pakistan took IMF's assistance. We discuss Pakistan's agreements with IMF from the time Pakistan first took IMF