World Bank, IMF, And It’s Impacts

8/9/2019 World Bank, IMF, And Its Impacts

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World Bank, IMF,and its impacts o

PAKISTANBY: PARES BIMANI ! "#$"%


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World Bank & IMF:!

P'opl' o(t'n )'t con(*s'd +'t''n t.' World Ba/WB0 and Int'rnational Mon'tar1 F*nd /IMF02 Altt.' IMFs functions complement t.os' o( t.' Bank, it is a totall1 s'parat' or)ani3ation2 W.il' World Bank provides support to developing

countries, t.' IMF aims to stabilize theinternational monetary system and monitoworlds currencies.


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World Bank:!

T.' World Bank is on' o( t.' orlds lar)'st so*rc's o( (*ndin) andknol'd)' to s*pport )o4'rnm'nts o( m'm+'r co*ntri's in t.'ir '5in4'st in6

Sc.ools and .'alt. c'nt'rs

Pro4id' at'r and 'l'ctricit1

Fi).t dis'as' and prot'ct t.' 'n4ironm'nt 'tc2

T.' World Bank is an int'rnational organizationon'd +1 t.' "77IT IS NOT A BANK


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istor1 o( World Bank:!

T.' World Bank as cr'at'd atBretton !oodsin "8%% to l'ndto#uropeanco*ntri's to .'lp t.'m r'+*ild a(t'r World War II2 It orld9s rst m*ltilat'ral d'4'lopm'nt +ank, and as (*nd'd t.ro*)o( World Bonds2 Its rst loans 'r' to Franc' and ot.'r E*rop'an c+*t soon l'nt mon'1 to ;.il',$e%icoand &ndiato +*ild po'r plaraila1s2 B1 "8


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P*rpos' o( t.' World Bank:!The Bank's goal is to "bridge the economic divide between poor and rich countries.

To achieve this goal, the Bank focuses on six areas:

1. Overcome poverty through growth in the poorest countries, focusing on Africa.

2. Offer reconstruction to poor countries emerging from war.

. !rovi"e a customi#e" "evelopment solution to help those mi""le$income countries overcome pro%lems that co

%ack into poverty.

&. 'otivate governments to act on preventing climate change, controlling "iseases, ()*+A*- an" malaria/, ma

international financial crises, an" promoting free tra"e.

0. ork with the eague of Ara% tates to improve e"ucation, %uil" infrastructure an" provi"e micro$loans to sm

the Ara% worl".

3. hare its expertise with "eveloping countries, an" its knowle"ge with anyone via reports an" its interactive on

2


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?otin) ri).ts:!In >$"$, 4otin) po'rs at t.' Stat' Bank 'r' r'4is'd to incr'as' t.' 4oic' o( d'4'lopin)

T.' co*ntri's it. most 4otin) po'r ar' no t.'

@nit'd Stat's /"#27#0,

=apan /27%0,

;.ina /%2%>0,

C'rman1 /%2$$0,

@nit'd Kin)dom /D2


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;riticisms on World Bank:!

n' o( t.' stron)'st criticisms o( t.' World Bank .as +''n t.' a1 iis )o4'rn'd2 W.il' t.' World Bank r'pr's'nts "77 co*ntri's, it is r*nn*m+'r o( 'conomicall1 po'r(*l co*ntri's2 T.'s' co*ntri's /.ic. pro4id' most o( t.' instit*tion9s (*ndin)0 c.oos' t.' l'ad'rs.ip and mana)'m'nt o( t.' World Bank, and so t.'ir int'r'sts dominat' t.'

World Bank Cro*p9s loans and aid .a4' *n(air conditions attac.'d tor''ct t.' int'r'sts, nancial po'r, and ot.'r (actors2 Gik':

W.'n it (orc'd sc.ool (''s on st*d'nts in C.ana in 'Hc.an)' (or a lod'mand'd t.at Tan3ania pri4ati3' its at'r s1st'm6 .'n it mad' pri4ati3ation a condition o( aid (or *rrican' Mitc.6 .'n it d'mand

'Hi+ilit1 in Sri Ganka in t.' a(t'rmat. o( t.' Asian ts*nami6 .'n(or 'liminatin) (ood s*+sidi's in post!in4asion IraJ2


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;ontin*'d:!

T.' Pr'sid'nt o( t.' Bank is ala1s a citi3'n o( t.' @nit'd Stat's2Gack transpar'nc1 to 'Ht'rnal p*+lics2

It is an instr*m'nt (or t.' promotion o( @2S2 or W'st'rn int'r'sts2


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World Bank & Pakistan:!

n =*l1 "", "8#$ Pakistan =oin'd World Bank2

'st(a)istan (ro*ect+

n Marc. >2 Proc*r'm'nt o( a)ric*lt*ral mac.in'r1

D2 ;onstr*ction o( a nat*ral )as transmission lin' (rom s*i to S*kk*r1d'ra+ad to Karac.i2


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;ontin*'d22World +ank (*nd'd man1 pro'cts in Pakistan lik': Karac.i po'r pr)as pro'ct, 'st Pakistan 'd*cation pro'ct, Ind*strial import pro'national 'Hpr'ssa1s, at'r s*ppl1 pro'ct, transport s'ctor pro'cman1 ot.'r d'4'lopm'nt pro'cts2

,ecently in -'/, orld +ank (*nd'd a pro'ct o( ENAN;E N@TFR MTERS AN ;IGREN2 Total cost o( t.at pro'ct is @SL ##million2 T.is pro'ct consists o( (o*r compon'nts:

"2 Addr'ssin) )'n'ral n*trition in om'n and c.ildr'n2>2 Addr'ssin) micron*tri'nt maln*trition ill s*pport 4itamin and mint'r4'ntions (or om'n and 1o*n) c.ildr'n2

D2 Addr'ssin) t.' '4'lopm'nt

%2 Str'n)t.'nin) instit*tional capacit1


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R'c'nt Goan (rom World Ban

n Ma1 >, >$"%:T.' World Bank .as appro4'd a L"> +illion loan (or Pakistant.at

dis+*rs'd o4'r 4' 1'ars2

T.' ministr1 said t.' mon'1 ill tar)'t 'n'r)1, 'conom1, /).tin)'Htr'mism and 'd*cation, it. L" +illion +'in) trans('rr'd to Paki

n'Ht ''k2

T.' loan ill carr1 a > p'rc'nt int'r'st rat' and is r'pa1a+l' a(t'r D
http://www.reuters.com/places/pakistan?lc=int_mb_1001http://www.reuters.com/finance/economy?lc=int_mb_1001http://www.reuters.com/places/pakistan?lc=int_mb_1001http://www.reuters.com/places/pakistan?lc=int_mb_1001http://www.reuters.com/finance/economy?lc=int_mb_1001http://www.reuters.com/places/pakistan?lc=int_mb_1001


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World Bank o4'rall impacts oPakistan:!

&mpact on #%ternal 0ebt+EHt'rnal d'+t do*+l's t.an t.' last 1'

,educe &nvestment+ As most of our 4* goes in paying off "e%ts we are una%investments whereas, our private sector "oesn5t have incentives an" they sei#e their

hile, pu%lic sector has little fun" left.

,educe 1aving+ 6oreign capital inflows have %een use" entirely to finance con'oreover, the increase in foreign capital lower our saving %y same magnitu"e. Thus

almost nothing to growth.Negative &mpact on (rivate sector+ *n or"er to finance "eficits governinterest rates to such extent that the private sector woul" fin" it unaffor"a%le to inves

out.


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istor1:!

The *nternational 'onetary 6un" (*'6/, like the orl" Bank, was conthe Bretton oo"s conferencethat sought to re%uil" 7urope after or

8nlike the Bank, its goal was to help countries maintain the value of th

currencies without resorting to tra"e %arriers an" high interest rates.


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;ontin*'d:!The #%tended ;redit :acility 3#;:4s*cc''ds t.' Po4'rt1 R'd*ction and Cro

/PRCF0 as t.' F*nds main tool (or pro4idin) m'di*m!t'rm s*pport to GI;s it. +alanc' o( pa1m'nts pro+l'ms2 Financin) *nd'r t.' E;F c*rr'ntl1 carri's a zerrate, it. a grace period of 8< years= and a >nal maturity of ' years.

1tructural Ad*ustment :acility 31A: ? #1A:4 @nd'r t.'s' (aciliti's t.' F*nr'so*rc's on conc'ssional t'rms to support medium term macroeconomic and structural reforms in lo!incom' co*ntri's (acin) protract'd BO( problrat' o( int'r'st on SAF and ESAF loans is .8 percent= and repayments are mto ' years.

1pecial 0rawing ,ights 310,s4 T.' SR is an int'rnational r's'r4' acr'at'd +1 t.' IMF in "88 to s*ppl'm'nt its m'm+'r co*ntri's9 ocial r's'r4'is n'it.'r a c*rr'nc1, nor a claim on t.' IMF .o'4'r it can +' 'Hc.an)' (or c*to a1s:"0 Arran)'m'nt o( 4ol*ntar1 'Hc.an)'s +'t''n m'm+'rs

>0 M'm+'rs it. stron) 'Ht'rnal positions p*rc.as' SRs (rom m'm+'rs it.

'Ht'rnal positions2


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Ad4anta)'s to Pakistan o( IMFinancin):!

:inancing from the &$: will contribute to +

Easin) t.' pac' o( ad*stm'nt, as 'll as

To r'storin) macro'conomic sta+ilit1 and in4'stor cond'nc'2

Fillin) t.' 'Ht'rnal nancin) )ap

R'+*ild int'rnational r's'r4's, and catal13' additional 'Ht'rnal ass(rom Pakistans d'4'lopm'nt partn'rs2

Additional assistanc' (rom donors is 'ss'ntial to nanc' t.' 'Hpansa('t1 n't and

Allo (or .i).'r sp'ndin) on d'4'lopm'nt pro)rams2


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;riticisms:!'any o%servers comment on the fact that the *'6 has a 9one si#e fits all9 men

whatever the situation the *'6 prescri%es %asically the same set of policies.

*'6 "oes not a"euately monitor the impact of its "ecisions on the poor.

ome of 8.. critics say, *'6 is an incre"i%ly wasteful organi#ation that takes valu

an" pours it "own the "rain of "eveloping economies whose lea"ers %ecome fa%uoff the money without any intention of ever helping out anyone.

The *'6 has no effective authority over the "omestic economic policies of its mem


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IMFs Assistanc' to PakistanAn 4'r4i'

Sinc' "8#$ .'n Pakistan +'cam' m'm+'r o( IMF, almost twelve arrangements /incl*din) t.' r'c'nt IMF loan o( L#2D +illion EFF in.a4' tak'n plac' *nd'r 4ario*s IMF (aciliti'sOpro)rams2

Almost si% loan arrangements'r' mad' d*rin) t.' rBenazir Bhutto incl*din)

Stand+1 arran)'m'nt,Str*ct*ral Ad*stm'nt Pro)rams /SAP0,

Po4'rt1 r'd*ction and Crot. Facilit1 /PRCF0 and

EHt'nd'd SAP2


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;ontin*'d:!Three IMF loan arran)'m'nts 'r' mad' d*rin) Nawaz 1harifs r')im'

@ardaris r')im' and twostand+1 a)r''m'nt and PRCF *nd'r $usharrto sta+ili3' t.' 'conom12

It is important to not' t.at in t.' t'n*r' o( last to d'cad's, on a4'ra)' ao( t.' total l'ndin) amo*nt .as +''n dran (rom t.' ori)inal 'a)r''o( t.' failure o( t.' )o4'rnm'nt to act *pon t.' strict m'as*r's d't'rmin

For t.' rst tim' in >$$$, t.is traditionas bro)enin M*s.arra( r')im' M*s.arra(s )o4'rnm'nt successfully implementedt.' conditions propand s*cc'ss(*ll1 dr' t.' .ol' l'ndin) amo*nt o( L"2D +illion2

It is also 4'r1 int'r'stin) to not' t.at only two loan arran)'m'nts 'r' mt.' military regime .'r'as tenIMF a)r''m'nts /incl*din) t.' r'c'nt I'r' mad' d*rin) t.' civilian regime2


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IMF 'Hp'ct'd loan:!

Pakistan is 'Hp'ctin) a loan o( L"2" Billion on'c'm+'r "< as Pakistan (*lll'd IMF conditionst.' d'adlin' .ic. is No4'm+'r D$, >$"%2


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IMF impacts on Pakistan:!In last d'cad', Pakistan (ollo'd str*ct*ral ad*stm'nt pro)ram t.at l'ad to lo'st )rot. rat' in t.

Pakistan2;onditions o( IMF 'r' not )ood (or t.' 'conom1, T.'s' conditions totall1 c.an)'d t.' )o4'rnm'nt

R'd*c' S*+sidi's

Pri4at' s'ctor r'4i4'

R'd*c' ir'ct Co4t2 rol' in 'conom1

Negative impact on (rivate sectors+ For nancin) d'cits )o4'rnm'nt incr'as'd int'r'st rat'2 Wa5orda+l' +1 Pri4at' s'ctor2

:aced iCuidity (roblem+ Pakistan incom' +i))'r part is ala1s *s'd to pa1 'Ht'rnal d'+t .ic. c

to (ac' a lot o( liJ*idit1 pro+l'ms2

,upee is depreciating+Takin) loan (rom anot.'r co*ntr1 dir'ctl1 a5'cts t.' c*rr'nc1 4al*'2

Pakistan ala1s n''ds (r's. (or'i)n mon'1 (or +ootin) (or'i)n 'Hc.an)' r's'r4's and to 'as' donpak r*p''2


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World Bank, IMF, And It’s Impacts

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