Pakistan came at 1947 from the first day pakistan face the economic problems and uncertainties.In economic sphere the republic's fiscal policy makers adopted various strategies to achieve the rapid economic development and growth.
Pakistan joined IMF in 1950.IMF played a crucial role in the economic history and development of pakistan.The role of IMF can be discussed under the following headings.
1. IMF role in pakistan 1950-69.
Pakistan joined IMF in 1950,according to IMF's quota system pakistan's quota was fixed at equivalent of (special drawing rights) SDR 150 million $.The IMF role in pakstan from 1950 to 1968 remained normal.Pakistan did not utilize any sort of financial assistance as a loan from the fund.
2.IMF in 1969.
At least for 18years since the day of joining the fund pakstan did not utlize the fund.It was the first time in march 1969 when an agreement was reached between the fund and the government of pakistan under the standby agreement pakistan obtaned a sum of special drawiing rights(SDR's 37.5 million $).
3.The funds role from 1970-1978.
During the period ,the fund assisted pakistan n fiscal related policy matters though its expertise and consultation.Beside this,there was small scale disbursement of fund from the IMF the pakistan.
4.In 1979 agreement between pakistan and fund.
In 1979,due to economic and politcal instability in the country,pakistan had to face the balance of payment's problems.The Gerneral Zia government decided to consulat the fund.Thus an agreement extended the loan 256 million $.
5.The November 1980's EFF deal with the fund.
Another agreement was reached between the government and IMF in 1980 for assisting paksitan in agricultural sector.Pakistan received special drawiing right(SDR's worth 81.1 million$ under EFF).
6.The 1983(fixation and quota).
In 1950,the fund had fixed pakistan's quota equivalent to special drawing rights(SDR's)150 million $.In 1983 the fund of pakistan 46.3 million $.
7.The deal with fund 1988 and 1990.
From 1980-87,there was no major deal calculated with fund.however 1988 and 1990 the government reached with the fund on two agreements.In december 1988,the government struck a deal with the fund for loan worth 813 million $.Another agreement reached at 1990 when a loan worth 730 million $.
8.The february 1994 programs.
The 1994 programs once again aimed at a sharp reduction of fixed defict to 4% in 1994-95 and 3% in 1995.the program had to be re-negotiated in 1995 and more realistic targets for 1994 of 5% and 4% for 1995-96 where agreed.the deficit turned out to be 5.8% and there was a break in relations with IMF.40% of original amount of 1.4 billion $ was reached.
9.IMF program in 1997.
Nawaz sharif government in 1997 signed the crucial deal with IMF.MF approved a 3 year financial package for pakistan worth 1137.3/1558 million $.
IMF's reluctant to release tranche.
Under the agreement pakistan got first tranche of 30 millions in 1998,the next tranche worth 280 million $ was due at the end of July 1998,when IMF refused to extend the next tranche.
Several reasons where responsible for the delaying of the tranche.
1. Nuclear blasts may 1998.
2. Kargil episode.
3. 15% general sale tax
4. Meeting between finance minister and IMF officials.
5. Imposition of 15% GST by the government.
6. Privatization of PTCL,KES,HBL and UBL.
In 2000-01 standby agreement for 596 million $,and IMF approved 123 million $ in sixth tranche 2003.
IMF satisfied with pakistan overall economic programs.
Federal minister Shokat aziz visited washington and held meeting with the officials of world bank and IMF.He said pm 18 April 2004 that the world bank and IMF were satisfied with the overall economic performance of pakstan ,Especially in micro economic sector.
