2. Formation:
• Bretton Woods Conference
• On 22nd July 1944
• To prevent the global crises
like the Great Depression
•IMF’s Headquarter is
located in Washington D.C.
INTERNATIONAL MONETARY
FUND
3. • IMF came into existence on December 27, 1945
when 29 countries signed the Articles of Agreement
• It originally had 45 members
But now
•. The IMF describes itself as “an organization of 188
countries, working to foster global monetary
cooperation, secure financial stability, facilitate
international trade, promote high employment and
sustainable economic growth, and reduce poverty
around the world.”
Purpose Of
Formation
4. Fast Facts on the IMF
Membership: 188 countries
Headquarters: Washington, D.C.
Executive Board: 24 Directors representing countries or groups of countries
Staff: Approximately 2,475 from 156 countries
Total quotas: US$360 billion (as of 8/9/12)
Additional pledged or committed resources: US$1 trillion
Loans committed (as of 8/9/12): US$243 billion, of which US$186 billion have not been
drawn
Biggest borrowers (amount agreed as of 8/9/12): Greece, Portugal, Ireland
Biggest precautionary loans (amount agreed as of 8/9/12): Mexico, Poland, Colombia
Surveillance consultations: Consultations concluded for 128 countries in FY2011 and for
117 countries in FY2012
Technical assistance: Field delivery in FY2011—198.2 person years
Transparency: In 2011, about 90 percent of Article IV and program-related staff reports and
policy papers were published
Original aims: Article I of the Articles of Agreement sets out the IMF’s main goals:
promoting international monetary cooperation;
facilitating the expansion and balanced growth of international trade;
promoting exchange stability;
assisting in the establishment of a multilateral system of payments; and
making resources available (with adequate safeguards) to members
experiencing balance of payments difficulties
5. Surveillance
To maintain stability and prevent crises in the
international monetary system, the IMF reviews
country policies, as well as national, regional, and
global economic and financial developments through
a formal system known as surveillance
Financial assistance
IMF financing provides member countries the
breathing room they need to correct balance of
payments problems
Technical assistance
1) Monetary and financial policies
2) Fiscal policy and management
3) Statistics
4) Economic and financial legislation.
ROLE OF IMF IN THE WORLD
7. IMF & The WORLD BANK
The World Bank’s
mandate: The World Bank
promotes long-term economic
development and poverty
reduction by providing technical
and financial support to help
countries reform particular
sectors or implement specific
projects
The IMF’s mandate: The IMF
promotes international monetary
cooperation and provides policy
advice and technical assistance.
IMF loans are short and medium
term and funded mainly by the
pool of quota contributions that its
members provide.
9. History
Pakistan became member of IMF in 1988
11 Loans have been contracted from the IMF
SIX LOANs were drawn during Benazir Bhuttos
era: the SAP, PRGF & Extended SAP
Two loans drawn during Nawaz Shariffs era.
Two Loans during during Mushraffs.
Most recent is the $ 7.8 Billion Loan
10. Common Conditions
IMF Close Monitoring
Reduction Of Government Spending
Increase in Tax to GDP Ratio
Change In Monetary Policy
Removal of duties on Imports
Removal of subsidies on exports
11. Musharaff
Only era to receive full IMF loan installment
Fulfilled all IMF conditions in 2000
Government saw a increased GDP growth
13. Advantages Of IMF Borrowing
Immediate allocation of Funds (Sometimes Entire
Lump sums)
Governments been able to come out of
immediate debt.
Payment of import bills
Aversion of Economic Crisis
14. Disadvantages Of IMF Borrowing
Unsubstantial changes in Economic reforms
Short term breakthrough
Mounting debt and increased Payback interest
rates
15. Is it Beneficial
Government approach for bailout
Continuation of cyclical debt
Intrusive policies
Governments inability to initiate proper reform
16. Conclusion
Government Expenditure
Lack of implementation of reforms by the
government
IMF seen as a support mechanism or fail safe to
bailout government
No IMF loan except Mushrafs extended loans
adopted proper changes and availed full IMF fund
coverage
18. Section of the report
She said that she was feeling awful at that time to
see so much food at the table, suffice for
hundreds of flood victims who were fighting like
crazy to get a small bag of flour and a small bottle
of water. She was ill at ease when she saw the
interior of lavish Premier house and some of the
government buildings and the chartered planes
and other such luxuries, when there was so much
misery outside.
In her report to the United Nations, she has
recommended UN to ask Pakistani government to
first cut down on their expenses and to first cut
down their luxuries before asking aid from the
world. IMF or World Bank.
19. Recommendations
Long – Term
Abolish “Democracy” in its current stature
Encourage the people of Pakistan FOR Pakistan
Substantial decrease in Government spending
Huge investment in Developmental expenditure
Create governmental entrepreneurship and
revenue building sources to meet fund
requirements
Increase tax to GDP growth
Consistent extensive economic reforms.
