what are the policies of IMF and why Pakistan got worst experience

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 The International Monetary Fund (IMF) policies.





1 .Providing financial assistance to member countries experiencing economic difficulties

2 .Promoting international monetary cooperation

3 .Facilitating the balanced growth of international trade

4 .Providing a forum for member countries to consult on economic issues

5 .Collecting and disseminating economic information

6 .Supporting member countries in developing sound economic policies

7 .Encouraging member countries to adopt policies to reduce poverty and inequality.


Countries may default on IMF loans for various reasons.





1 .Economic mismanagement: The country may have failed to implement the necessary economic reforms to restore stability, leading to a worsening of its economic situation.

2 .Unforeseen events: The country may have faced unexpected economic shocks, such as a natural disaster or sudden drop in commodity prices.

3 .Political instability: Political instability can lead to a lack of policy continuity and make it difficult to implement necessary economic reforms.

4 .Unsustainable debt levels: The country may have taken on too much debt and is unable to service it, leading to a default.

5 .Resistance to reforms: The country may be unwilling to implement the reforms required by the IMF as a condition for receiving the loan, leading to a breakdown in the loan agreement.

6 .Lack of financing: The country may not be able to secure additional financing to support its reform efforts, making it difficult to repay the IMF loan.

The worst experience of Pakistan with IMF.




Pakistan has had a tumultuous relationship with the International Monetary Fund (IMF) since the late 1980s. Over the years, Pakistan has turned to the IMF for financial assistance on numerous occasions, and each time, the IMF's conditions and reforms have had far-reaching impacts on the country's economy and society.

One of the most challenging experiences Pakistan had with the IMF was in the late 1990s, when the country was facing a severe balance of payments crisis and a shortage of foreign exchange reserves. In November 1997, Pakistan signed a three-year Extended Structural Adjustment Facility (ESAF) program with the IMF, which aimed to stabilize the country's economy through a range of structural reforms and fiscal adjustments.

The IMF's conditions included reducing the budget deficit, devaluing the currency, liberalizing trade and investment, and privatizing state-owned enterprises. While these reforms were intended to restore stability to the economy, they also had far-reaching impacts on the population. For example, the devaluation of the currency led to a sharp increase in inflation, which hit the poorest households the hardest. The reductions in government spending, including cuts to subsidies, education, and health programs, had a negative impact on social services and contributed to increasing poverty levels.



Another aspect of the IMF program that caused controversy in Pakistan was the requirement to privatize state-owned enterprises, which was met with resistance from trade unions and the public. The privatization of Pakistan Steel Mills, for example, was seen as a controversial move that had a negative impact on employment and industrial production.

Despite the implementation of the reforms required by the IMF, the country's economic performance was disappointing, and the government failed to meet several of the performance targets set out in the program. The IMF suspended the program in 1999, citing the government's failure to implement several key reforms. This led to a further worsening of the country's economic situation, as the absence of IMF support created a loss of confidence among investors and foreign creditors.

The IMF's engagement with Pakistan continued in the 2000s, with several more programs being signed, each with its own set of reforms and conditions. Despite some initial progress, the country continued to face challenges in implementing the reforms and meeting the performance targets set out in the programs. The global financial crisis in 2008 had a significant impact on Pakistan's economy, and the country was forced to turn to the IMF for assistance once again.





The most recent IMF program, signed in July 2019, has been criticized by some as being one of the toughest and most demanding that Pakistan has faced. The program includes a range of reforms aimed at addressing the country's structural imbalances, including reducing the budget deficit, increasing tax revenue, and improving the financial sector. The program has already had an impact on the country, with the devaluation of the currency leading to an increase in inflation and the reductions in subsidies leading to higher prices for essential goods.

In conclusion, Pakistan's experience with the IMF has been mixed, with some periods of stability and progress, and others characterized by controversy and resistance to reforms. The country has faced numerous challenges in implementing the reforms required by the IMF, and the impact of these reforms on the economy and society has been far-reaching. Despite the challenges, however, Pakistan has continued to turn to the IMF for financial assistance, highlighting the difficult economic situation the country faces and the need for continued reforms to restore stability and support economic growth.


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