IMF:
IMF was founded in 1944 during world war II period out of Bretton Woods USA conference.
In this conference 44 countries including US, UK and Russia sent their delegations.
Pakistan became member of IMF on 11 July 1950. Presently IMF compromises of 190 member countries.
IMF was founded to stabilise the world economy taking in account the after shocks world war II weighing heavy on European countries.
How countries get membership of IMF?
Any country can become member of IMF by meeting certain requirements like sharing information about economy and by paying certain amount called qouta subscriptions.
Wealthy member countries pay more subscriptions as compared to poor member countries.
Loans are issued to member countries based on their qouta subscriptions.
What is SDR?
Special Drawing Rights has been defined in terms of basket of currencies in July 1974, initially consisting of 16 currencies and in 1981 basketball of currencies curtailed to five.
What are the IMF's missions ?
According to IMF's website there are three missions of IMF.
- Furtherance of international monetary cooperation.
- Encouraging the expansion of trade and economic growth.
- Discouraging the policies that would harm prosperity.
To achieve these missions member countries work collaboratively with each other and other international bodies.
Who is the managing director of IMF?
Balgarian national Charistalina Georgieva is the managing director of IMF since 2019 who took charge of IMF from Charistina Legard.
Charistalina Georgieva belongs to a poor european country Balgaria and the first from her country to reach the post of IMF's managing director who was earlier chief executive of world Bank.
IMF a curse or Cure for ailing economies
The main motive of establishing IMF during world war II was to stabilise the economies of poor european countries reeling under war effects. But later on its scope widened to all over the world with 190 countries as its members.
IMF is not only a lending organisation but also give valuable advice to stabilise the economies. IMF is last ray of hope for poorer countries to whom no one give loan, then give them loan.
IMF had helped many countries in their time of crisis like Sri Lanka during his default period giving her loan to run the country affairs.
In year 2018, Argentina 🇦🇷 a South American country borrowed biggest ever money from IMF amounting to rupees $57bn.
In year 2002 Brazil 🇧🇷 got loan from IMF to rescue herself from default and emerged from the crisis and returned the loan amount two years earlier than the fixed time.
Pakistan and IMF
IMF is a blessing for countries like Pakistan who has to rely heavily on IMF to shave off looming danger of default and streamline the balance of payments.
According to some financial experts Pakistan can't survive without IMF due huge foriegn debt servicing and widening current account deficit.
IMF impose stiff conditions over Pakistan for the betterment of economy like, slashing subsidies, increasing electricity prices, widening the tax net base to generate more revenue, curtailment of non developmental expenditures.
If IMF loan programme didn't materialise then no any other lender will give loan Pakistan. IMF is door opener for other multi and bilateral donors as well as friendly countries.
Before sanctioning loan Saudis first discuss with IMF then issue loan.
Loan history of Pakistan with IMF
Pakistan entered with IMF in 24th programme since its membership.
In 1958 Pakistan got approved first IMF programme amounting to $2.5 crore.
Later on loan programmes contained under different governments.
- Ayub Khan's government entered into three IMF programmes.
- Pakistan peoples party government under Zulfiqar Ali Bhutto reached in four IMF programmes.
- Military ruler General Zia ul Haq entered into two IMF programmes.
- PPP's Benazir Bhutto entered into two IMF programmes in first tenure.
- Nawaz Sharif in his first stint in power entered into one IMF programme.
- Benazir Bhutto in his second tenure entered into three IMF programmes.
- Nawaz Sharif in second tenure entered into two IMF programmes.
- In Military ruler General Pervaiz Musharaf's tenure Pakistan entered into two IMF programmes.
- During PPP's government from 2008 to 2013 Pakistan entered into one IMF programme, while PMLn under Nawaz Sharif entered into one IMF programme.
- Imran khan led government entered into one IMF programme which was left incomplete and further run by PDM Government led PM Shahbaz Sharif after the ouster of Imran Khan from power corridors through a no confidence move.
- PDM led Government entered into 24th IMF programme under stand by arrangements to the imminent default.
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