ECONOMICS

PAKISTAN’S ECONOMY & THE

ROLE OF IMF & WORLD BANK ON
IT

Nauman Ayubi
 ECONOMICS

TABLE OF CONTENTS
2010

SR. TOPICS PAGE NO.

NO.

1. Economy of Pakistan 3

3
2. History of Pakistan’s economy
5
3. The economy today
6
4. Factors effecting economy
9
5. Sectors of Pakistan’s economy
13
6. World bank
13
7. International monetary fund
14
8. Difference between imf & world bank
14
9. Imf assistance to Pakistan

10 World bank assistance to Pakistan 18

.
Suggestion 20
11
. bibliography 21

12
.

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First of all we should understand Pakistan’s economy and on what factors it

depends. In that we can easily understand the role of IMF and World Bank on our
economy. 2010

Economy of Pakistan

The economy of Pakistan is the 27th largest economy in the world in terms
of purchasing power, and the 48th largest in absolute dollar terms. Pakistan is the
second largest economy in South Asia. Pakistan's economy mainly encompasses,

• Textiles

• Chemicals

• Food processing

• Agriculture

and other industries.

Economic History
At the time of independence in 1947, Pakistan was a very poor country and its
economy majorly depends on agriculture. Since independence, Pakistan's
average economic growth rate has been higher than the average growth rate of the
world economy during the period. Average annual was 6.8% in the 1960s, 4.8% in
the 1970s, and 6.5% in the 1980s. Average annual growth fell to 4.6% in the 1990s
with significantly lower growth in the second half of that decade. Industrial-sector
growth, including manufacturing, was also above average. During the 1960s,
Pakistan was seen as a model of economic development around the world, and
there was much praise for its economic progression.

The table which gives every five years progress of GDP, US Dollar Exchange Rate,
Inflation Index, and Per Capita Income is given on the next page.

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2010
Per Capita
Gross Domestic Inflation Index
Year US Dollar Exchange Income
Product (2000=100)
(as % of USA)

196
20,058 4.76 Pakistani Rupees 3.37
0

196
31,740 4.76 Pakistani Rupees 3.40
5

197
51,355 4.76 Pakistani Rupees 3.26
0

197
131,330 9.91 Pakistani Rupees 2.36
5

197
283,460 9.97 Pakistani Rupees 21 2.83
8

198 16.28 Pakistani

569,114 30 2.07
5 Rupees

199 21.41 Pakistani

1,029,093 41 1.92
0 Rupees

199 30.62 Pakistani

2,268,461 68 2.16
5 Rupees

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200 51.64 Pakistani

3,826,111 100 1.54
0 Rupees

2010
200 59.86 Pakistani
6,581,103 126 1.71
5 Rupees

The economy today

Pakistan raised back its Foreign Reserves to a handsome $16.4 billion by October
2007. Exceptional policies kept Pakistan's trade deficit controlled at $13 billion.
Pakistan’s exports increased to $18 billion. The revenue generation increased to
become $13 billion and attracted foreign investment of $8.4 billion. Since the
beginning of 2008, Pakistan's economy has a downfall due to war on terror.
The War on Terror has created great instability and led to a decline in FDI from a
height of approximately $8bn to $3.5bn for the current fiscal year. Combined with
high global commodity prices, the dual impact has shocked Pakistan's economy,
with gaping trade deficits, high inflation and a crash in the value of the Rupee,
which has fallen from 60-1 USD to over 80-1 USD in a few months. For the first
time in years, it may have to seek external funding as Balance of Payments
support.

Economic Comparison of Pakistan 1999-2009

Indicator 1999 2007 2008 2009

$ 185
GDP $ 75 billion $ 160 billion $ 170 billion
billion

GDP Purchasing Power $ 580.6

$ 270 billion $ 475.5 billion $ 504.3 billion
Parity (PPP) billion

GDP per Capita Income $ 450 $ 925 $1085 $1250

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Rs. 1.05
Revenue collection Rs. 305 billion Rs. 708 billion Rs. 990 billion
trillion

2010
Foreign reserves $ 700 million $ 16.4 billion $ 10 billion $ 14 billion

$ 18.45
Exports $ 7.5 billion $ 18.5 billion $ 19.22 billion
billion

Indicator 1999 2007 2008 2009

Textile Exports $ 5.5 billion $ 11.2 billion - -

KHI stock exchange $ 5 billion at $ 75 billion at $ 56 billion at

(100-Index) 700 points 14,000 points 9,000 points

Foreign Direct
$ 1 billion $ 8.4 billion $ 5.19 billion $ 4.6 billion
Investment

Debt servicing 65% of GDP 26% of GDP - -

Poverty level 34% 24% - -

Literacy rate 45% 53% - -

Rs. 880
Development programs Rs. 80 billion Rs. 520 billion Rs. 549.7 billion
billion

Factors affecting economy

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 Growth And Investment

 Agriculture
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 Manufacturing

 Fiscal Development

 Money and Credit

 Inflation

 Capital Market

 Trade and Payments

 External and Domestic Debt

 Education

 Health And Nutrition

 Population, Labour Force and Employment

 Poverty

 Transport and Communication

 Energy

Manufacturing:
Pakistan’s manufacturing sector is growing from 2000.
In 1999, large scale manufacturing is 1.5% and it is 19.9% in 2004-05. So it makes
an average 8.8% by the end of 2007. Below is growth of large scale manufacturing,
• 1999-00 – 1.5%
• 2000-01 – 11%
• 2001-02 – 3.5%
• 2002-03 – 7.2%
• 2003-04 – 18.1%
• 2004-05 – 19.9%
• 2005-06 – 8.7%
• 2006-07 – 8.6%

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• 2007-08 – 5%

Finance:
Pakistan’s finance and insurance sector department also showed a 2010
great development from 2000. In 2005, it is at Rs.311, 741 million. It shows a
growth of 166% since 2000.
Stock market:
“Business Week” the international magazine declared
Pakistan’s stock market, the best performing stock market index in the
world, in the first four years of 21st century. But in 2008, there is a great
decline in Pakistan’s economy due to uncertain political environment and
many other reasons.
Tourism:
Pakistan has diverse cultures, people and landscapes. Tourism in
Pakistan is a growing industry. To promoting Pakistan’s unique and various cultural
heritages, PM launch "Visit Pakistan" marketing campaign in 2007. In 2009, The
World Economic Forum’s Travel & Tourism Competitiveness Report ranks Pakistan
as one of the top 25% tourist destinations for its World Heritage sites. Some
famous tourist spots are shown below,

K2, world's second- The Badshahi mosque in

Damn-e Koh Park in DHA Marina Club in Karachi
highest mountain, in Lahore epitomizes the beauty,
Islamabad
northern passion and grandeur of the Mughal

era.

Badshahi Masjid at night in A Daewoo Express coach on The Shalimar gardens of

Lahore a Motorway of Pakistan Lahore are a UNESCO world

heritage site

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Revenue:
The income of a government from taxation, excise duties,
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customs, or other sources, appropriated to the payment of the public expenses.
The Board of Revenue has collected nearly one trillion Rupees ($14.1 billion) in
taxes in the 2007-2008.

Sectors of Pakistan economy

Agriculture:
Pakistan ranks fifth in the Muslim world and twentieth
worldwide in farm output. About 25% of Pakistan's total land area is under
cultivation and is watered by one of the largest irrigation systems in the world.
Agriculture accounts for about 23% of GDP and employs about 44% of the labor
force. Zarai Taraqiati Bank Limited is contributing a lot in our agriculture sector.
Industry:
Pakistan ranks forty-first in the world and fifty-fifth worldwide in
factory output. Pakistan's industrial sector accounts for about 24% of GDP. Cotton
textile production and apparel manufacturing are Pakistan's largest industries,
accounting for about 66% of the merchandise exports and almost 40% of the
employed labour force. Merchandise exports mean export of goods not services.
Other major industries include cement, fertilizer, edible oil, sugar, steel, tobacco,
chemicals, machinery, and food processing.
Automobile industry:
Pakistan is an emerging market for automobiles and
automotive parts. The total contribution of Auto industry to GDP in 2007 is 2.8%.
Auto sector presently, contributes 16% to the manufacturing sector which also is
expected to increase 25% in the next 7 years. But in my opinion this prediction
can’t be correct due to high inflation and shortage of CNG.

CNG industry:
Compressed Natural Gas (CNG) is a substitute for gasoline
(petrol) or diesel fuel. It is considered to be an environmentally “clean” alternative

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to those fuels. In 2009, Pakistan is one of the largest users of CNG (compressed
natural gas) in the world. Presently, more than 2,900 CNG stations are operating in
the country in 85 cities and towns. It has provided employment to many people. But
now this industry has a decline and shortage of CNG is creating a big problem for
CNG station owners and the employs working at these stations. Many CNG
2010

stations closed and many are going to close if we don’t fight with the shortage
problem of CNG.

Cement industry:
Growth of cement industry is rightly considered a
barometer for economic activity. In 1947, Pakistan had inherited 4 cement plants
with a total capacity of 0.5 million tons.

The industry comprises of 29 firms, with the installed production capacity of 44.09
million tons. There are four foreign companies, three armed forces companies and
16 private companies listed in the stock exchanges. The cement sector is
contributing above Rs 30 billion to the national exchequer in the form of taxes.
Exchequer was a part of the government’s hat was responsible for the
management and collection of revenues.

Cement industry is also serving the nation by providing job opportunities and
presently more than 150,000 persons are employed directly or indirectly by the
industry.

IT industry:
Pakistan’s IT industry has been rising steadily. The Government of
Pakistan has been proactively developing the IT sector in Pakistan. A few of the
incentives offered include tax exemption till 2016, establishment of IT Parks with
low rent, foreign ownership of equity invested in IT and 100% repatriation of profit
allowed to IT companies. Profit repatriation is an important factor that determines

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whether 'foreign direct investment' in another country is actually profitable for the
parent firm.

Total number of IT companies registered with PSEB 1306

445 Karachi 2010
Number of substantial IT companies region-wise 351 Islamabad/Rawalpindi
breakup 426 Lahore
84 Others
Total number of foreign IT and telecommunication
60
companies working in Pakistan
US$ 2.8 billion (WTO-prescribed
Total industry size
formula)
US$ 1.4 billion (WTO-prescribed
IT and IT-enabled services exports
formula)
Percent growth in exports over the last one year 61%
Number of IT graduates produced per year Approximately 20,000
Export targets for the current fiscal year 2007-2008 US$ 162 million
Textiles:
Pakistan’s textile industry and clothing sector has always been a
major contributor to the foreign exchange earning and still contributes about 55% to
the total exports.

Textile exports in 1999 were $5.2 billion and rose to become $10.5 billion by 2007.
Textile exports managed to increase at a very decent growth of 16% in 2006. There
is development in other sectors and exports of other sectors increases therefore

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textile exports share in total export of Pakistan has declined from 67% in 1997 to
55% in 2008.The top buyers of Pakistani textile goods are:

• USA
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• UK

• Japan

• Korea

• Saudi Arabia

• Italy

• Turkey

• Germany

Etc.

Services:
In GDP the share of service sector is 53.3%. Transport, storage,
communications, finance, and insurance shares 24% of this sector, and wholesale
and retail trade shares about 30%.

Communication:
Pakistan won the prestigious Government Leadership award
of GSM Association in 2006. In 2008, the mobile telephone market reached a
subscriber base of 91 million users. In addition, there are over 6 million landlines in
the country with 100% fiber-optic network. The contribution of telecom sector to the
national exchequer increased to Rs 110 billion in the year 2007-08 on account of
general sales tax, activation charges and other steps as compared to Rs 100 billion
in the year 2006-07. The top mobile phone operators in Pakistan are:

• Mobilink (Parent: Orascom Telecom Holding, Egypt)

• Ufone (Parent: PTCL (Etisalat), Pakistan/UAE)

• Telenor (Parent: Telenor, Norway)

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• Warid (Parent: Abu Dhabi Group / SingTel, UAE/Singapore

• Zong (Parent: China Mobile, China)

Electricity: 2010
Installed capacity

Electricity - total installed capacity: 19,505 MW (2007)

Electricity - Sources (2007)

• Fossil fuel - 12,580 MW - 65% of total

• Hydro - 6,463 MW - 33% of total
• Nuclear - 462 MW - 2% of total

Pakistan is facing a serious shortage of electricity. We should make more dams,

nuclear plants, and we have large coal reserves so we should depend on coal and
finally we can make solar plants for producing electricity.

Exports:
Pakistan's exports increased more than 100% from $7.5 billion in 1999 to stand at
$18 billion in the financial year 2007-2008. Pakistan
exports rice, furniture, cotton fiber, cement, tiles, marble, textiles, clothing, leather g
oods, sports goods, surgical instruments,
electrical appliances, software, carpets, rugs, ice cream, livestock
meat, chicken, powdered milk, wheat, seafood, vegetables, processed food items,
Pakistani assembled Suzuki’s (to Afghanistan and other
countries), defense equipment, salt, marble, onyx, engineering goods, and many
other items. Pakistan now is being very well recognized for producing and
exporting cements in Asia and Mid-East.

Imports:
Pakistan's imports stood at $30.54 billion in the financial year 2006-
2007. Pakistan's single largest import category is petroleum and petroleum
products. Other imports include: industrial machinery, construction machinery,
trucks, automobiles, computers, computer parts, medicines, pharmaceutical
products, food items, civilian aircraft, defense equipment, iron, steel, toys,
electronics, and other consumer items.

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World Bank
The first thing comes to my mind is that what is World Bank and what is the
purpose of World Bank. The World Bank is one of the world’s largest sources of
funding and knowledge to support governments of member countries in their efforts
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to invest in schools and health centers, provide water and electricity, fight disease
and protect the environment. The World Bank is an international organization
owned by the 184 countries. It is not a bank.

International monetary fund

The International Monetary Fund (IMF) is an organization of 186 countries, working
to help the development of global monetary cooperation, secure financial stability,
facilitate international trade, promote high employment and sustainable economic
growth, and reduce poverty around the world. The IMF works to help development
of global growth and economic stability. It provides policy advice and financing to
members, in economic difficulties and also works with developing nations to help
them achieve macroeconomic stability and reduce poverty.

The IMF's fundamental mission is to help ensure stability in the international

system. It does so in three ways: keeping track of the global economy and the
economies of member countries; lending to countries with balance of payments
difficulties; and giving practical help to members.

Difference between imf & world bank

People sometimes confuse the World Bank with the International Monetary Fund
(IMF). Although the IMF’s functions complement those of the World Bank, it is a
totally separate organization. While the World Bank provides support to developing
countries, the IMF aims to stabilize the international monetary system and monitors
the world’s currencies.

Imf assistance to Pakistan

When IMF is advancing loans to their members, they not only analyze the
economic conditions of their members but the borrower will also have to frame its
policies in the light of directions given by IMF authorities.

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The question in my mind is that when and how much was lent to Pakistan by IMF.
And what were the conditions imposed by IMF and what were the consequences of
these loans.

Pakistan joined IMF on 11th July, 1950. IMF is providing financial assistance to 2010
Pakistan since 1952. According to 1977 statistics, Pakistan borrowed 1193 million
dollars from IMF. Since 1980, the fund has made four main agreements with
Pakistan as,

1. In November,1980

2. In December, 1988

3. In February, 1994

4. In July, 1997

1. THE AGREEMENT OF 1980:

Under this agreement, IMF provided $1.7 billion

for the period of 1980-83. The biggest condition against this loan was to reduce the
fiscal deficit. For this purpose they asked the Government to increase the prices of
public enterprises like fertilizers, cement, electricity, clean water, educational and
health services. The indirect taxes should increase and subsidies should be
withdrawn. But the budget deficit in 1980-81 was 5.8% of GDP went to 9.1% in
1985-86. When Government of Pakistan again asked IMF for assistance, they
showed dissatisfaction over our efforts to reduce fiscal deficit. Accordingly, IMF
prepared a package of policies for Pakistan and chalked-out a time-table for the
required changes. IMF set the following conditions for Pakistan:

1. Rupee be devalued by 20% in terms of dollar

2. The imports be liberalized

3. Prices should increase and subsides be withdrawn

4. The custom duty on imports be decreased and sales and exercise duty
be imposed in the country

5. The industrial sector is liberalized from govt. controls through de-

regulations and privatization.

2. THE AGREEMENT OF 1988:

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During the period of 1988-91, IMF gave the

assistance of $900 million to Pakistan in order to remove the deficit in BOP by
redressing structural problems. According to this agreement:

1. The current account deficit of BOP which was 4% of GNP in 1987 was to be 2010
reduced to 3.3% of GNP in 1988-89, 2.7% in 1989-90, and 2.5% of GNP in
1990-91.

2. The foreign debt burden which was 31% of GNP in 1987 would be
decreased to 25% in 19990-91.

3. The overall fiscal deficit of federal and provincial govt. which was 8.5% of
GDP in 1986-87 would be reduced to 4.8% of GDP in 1990-91.

4. The bank borrowings be reduced to 1% of GDP, while non-bank borrowings

to 3.6% of GDP.

5. The tax structure will be changed. The tax-base will be expanded and tax
collection system will be improved.

6. The system of general sales tax will be introduced.

7. The federal and provincial govt. will control their expenditures, while the
price of social services will be increased.

The main objective of this agreement was to reduce fiscal deficit. But the govt.
failed to meet these conditions. The budget deficit which was 8.7% of GDP in 1990-
91 decreased to 8% GDP in 1992-93. This means that the budget deficit could not
be decrease appreciably.

3. THE AGREEMENT OF 1994:

The aim of this agreement was to reduce the

financial deficit to 4% of GDP in 1994-95 and to 3% of GDP in 1995-96. But this
agreement was renegotiated in December, 1995. As a result, this target was set at
5% of GDP for 1994-95 and 4% for 1995-95. In this agreement IMF stressed upon
early conditions. As the price of gas, electricity, water, education and health
services should be increased.

The govt. of Pakistan made some efforts but little success was attained. The
budget deficit was 5.8% of GDP in 1994-95 and the target for 1995-96 was set at
5% of GDP. This led to create a suspension in the attainment of loan of $1.4 billion
could be raised. Then the govt. of Pakistan failed to complete the conditions of IMF.

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Then the finance minister re-negotiated with IMF. As a result, a new agreement
took place between Pakistan and IMF where the fiscal deficit was stipulated at 4%
of GDP for 1996-97. Against it, the agreement was extended to September, 1997,
instead of February, 1997, while the amount of loan was raised from $250 million to
$850 million.
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Government of Pakistan neither reduces its expenditure nor raised tax revenues.
The IMF failed to learn any lesson from Pakistan’s experience. Government of
Pakistan’s dependence remains the same and efforts for new agreement started.

4. THE AGREEMENT OF 1997:

In 1997, IMF prepared a ‘Medium Term Policy

Framework Paper’ for the growth and the stabilization of the economy of Pakistan.
This period is of three years from 1st July, 1997 to 30 June, 2000. Pakistan
demanded a lot of amount as financial aid but IMF sanctioned $500 million on
January 14, 1999. IMF suggested conditionalities in order to bring structural
changes in the economy. The IMF issued a long structure. Government of Pakistan
applied many suggestions but still they failed to impose sales tax at retail level. The
rupee was devalued in 1998. The trade was liberalized. IMF has associated its
tranche ($280 million) with the issue of IPPs. It means that unless govt. of Pakistan
settles the issue with IPPs, they will not get any loan from IMF.

THE YEAR 2003-04:

Most projects with IMF were suspended because Pakistan

could not complete their conditions. But first time in 2004, Pakistan got the entire
amount which was sanctioned by IMF on PRGF which is $1.47 billion dollars.

Pakistan exports grew during this period. Although IMF and other financial
institutions of the world have shown satisfaction over macroeconomic stability of
the country, yet WB is of the view that Pakistan has to face the problem of internal
and external loans, and it will have to reduce them.

THE YEAR 2008:

As a result of elections of 18 th February 2008, General Musharaf

had to surrender and Asif Ali Zardari became the president of Pakistan. At that
time, the country was entrapped into economic difficulties. Not only trade deficit
had gone to $20 billion, but the fiscal deficit also reached 4.7% of GDP. Foreign
reserves had touched at lowest level.

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The IMF's Executive Board has approved a $7.6 billion loan for Pakistan to support
its program to stabilize and rebuild the economy while expanding its social safety
net to protect the poor.

"The Government's program has two objectives: first, to restore overall economic 2010
stability and confidence through a tightening of macroeconomic policies, and
second, to do so in a manner that ensures social stability and adequate support for
the poor during the adjustment process," said Juan Carlos Di Tata, the IMF mission
chief to Pakistan.

Of the $7.6 billion loan, $3.1 billion will be made available by the IMF immediately
to strengthen the reserve position. And the regular monitoring of the economy by
the IMF will show how the macroeconomic objectives set by the Government are
being met and whether they need to be adjusted in the light of changing
circumstances.

The Pakistan authorities have already taken some difficult steps to achieve these
objectives: energy subsidies have been cut and the interest rate has been
increased to tighten monetary policy. The authorities' program for the coming 24
months envisages a number of additional steps:

• The fiscal deficit, excluding grants, will be brought to down from 7.4 percent
of GDP in 2007/08 (starting July 1) to a more manageable 4.2 percent in
2008/09 and 3.3 percent in 2009/10—in line with what it was three years
ago. This fiscal adjustment will be primarily achieved by phasing out energy
subsidies and strengthening revenue mobilization through tax policy and
administration measures.

• The State Bank of Pakistan (SBP) will act on monetary policy to build its
international reserves, bring down inflation to 6 percent in 2010, and
eliminate central bank financing of the government. The program includes
measures to improve monetary management and enhance the SBP's bank
resolution capacity, and avoid the use of public resources to support the
stock market.

• Expenditure on the social safety net will be increased to protect the poor
through both cash transfers and targeted electricity subsidies. The fiscal
program for 2008/09 envisages an increase in spending on the social safety
net of 0.6 percentage points of GDP to 0.9 percent of GDP.

THE YEAR 2009:

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The IMF’s Executive Board agreed to increase lending to

Pakistan by an extra $3.2 billion to fund priority spending and help the government
provide assistance to nearly three million people displaced by military operations
and a difficult security situation.
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The Board reviewed progress under a $7.6 billion Stand-By Arrangement for
Pakistan that was agreed in November last year. During the August 7 discussion,
Directors agreed to increase lending by $3.2 billion, after a request from the
Pakistan government to meet the country’s increased balance of payments needs
resulting from higher oil prices.

EFFECTS OF IMF PROGRAMES:

IMF authorities think that the problem of

Pakistan increased because of non-compliance with the IMF programs. But it is not
true. The IMF program has led to increase the charges of gas, electricity, petrol and
telephone. The imposition of sales tax and cut in tariff rates on the advice of IMF
has greatly affected the incomes of the poor and middle class earners. They have
widened the gaps between the incomes. The absolute poverty has increased which
has promoted unsocial activities. But this is not all because of IMF, we are
responsible for it. If our fiscal deficit and trade deficit decreases then we should not
go to IMF for financing. But we should be prepared to pay more in the form of taxes
and reduces imports; particularly oil etc, the dependence on IMF may go down.

World Bank assistance to Pakistan

• They are supporting reforms at both the federal and provincial level.

For encouraging growth, investment, and employment generation, the Federal and
Provincial Governments have been implementing various reform programs. In June
2007, the World Bank approved a US$350 million to support ongoing
implementation of the Government's Poverty Reduction Strategy. At the provincial
level, the Bank approved operations worth US$430 million for Punjab, Sindh and
the North West Frontier Province to help improve irrigation, education and human
development indicators.

• They are working with Pakistan Poverty Alleviation Fund to bring

difference in the lives of poor.
The World Bank funded Pakistan Poverty Alleviation Fund Project (PPAF) is
designed to reduce poverty and empower the rural and urban poor in Pakistan
through the provision of resources and services to the poor, especially women.
This is being achieved through an integrated approach that includes building

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institutions of the poor and then providing them with micro-credit loans; grants for
small scale infrastructure projects; training and skill development and social sector
interventions. The program is impacting over 10 million people. PPAF has issued
1.5 million micro-credit loans, (average loan-size US$ 150), benefiting nearly 9
million people. 2010
• They are helping the victims of the Earthquake.
The October 2005 earthquake in Pakistan destroyed or damaged around 575,000
rural houses, and rendering over 3 million people without shelter in North West
Frontier Province (NWFP) and Azad Jammu and Kashmir (AJ&K). In response, the
government created the Earthquake Relief and Reconstruction Authority (ERRA)
and launched an ambitious US$1.5 billion owner-driven rebuilding program -
largely suited to the mainly rural affected population. It is partially funded by World
Bank.

• They are working with the government to improve education

outcomes.

The World Bank is providing assistance to the Government of Pakistan in

education reforms, at both the national and the provincial level. This support is
provided through development policy operations with a strong focus on primary and
secondary education. These programs target increasing participation of girls and
children from poorer houses. The World Bank is also assisting the government in
improving the quality and relevance of its higher education and technical and
vocational training system. They have a strong focus on improving the quality of
education.

• They are joining with international partners to help Pakistan fight polio.

They approved two projects US$42.71 million in 2003 and US $ 74.27 million in
2006 for Pakistan to purchase the oral polio vaccine. The loan to Pakistan will help
the country’s Polio Eradication Initiative which aims to make Pakistan a Polio free
country. Since 1997 the number of polio cases has decreased from 1147 to 31 in
2007. The first project has been successfully completed.

• They are focusing on un-served and underserved low-income

communities.

In NWFP and AJK, Bank projects are supporting delivery of cost effective and
sustainable community development schemes, and basic infrastructure and
services. To achieve this, the role and capabilities of local governments at the
district and lower levels have been strengthened. In AJK, the project has already
reached a population of 893,000 against the original target of 830,000, through 320

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CBOs. Out of the 54 Tehsil Municipal Authorities (TMA) in NWFP, 50 are now
participating in the Project.

• They are helping Pakistan prevent the spread of HIV/AIDS.

2010
The key challenge facing the country is to expand and improve quality of HIV
preventive services to vulnerable groups that are most at risk of contracting and
transmitting the disease. These include sex workers and injecting drug users. The
Bank is supporting the Government efforts to control AIDS through the HIV/AIDS
Prevention Project designed to prevent the disease from becoming established in
these populations, while at the same time working to protect these groups from
stigmatization. A key focus of the project is delivery of HIV preventive services to
high risk populations through public-private partnerships. A total of 17 service
delivery packages for injecting drug users (IDUs), sex workers, truckers and jail
inmates have been contracted out to NGOs by the National and Provincial AIDS
Control Programs covering most major cities across the country.

• They are helping to ‘improve trade flows’ and ‘lower transit costs and
times’.

In 2005, the Government of Pakistan (GOP) launched major initiatives around the
National Trade Corridor Improvement Program (NTCIP) to reduce the cost of trade
and transport logistics and bring services' quality to international standards in order
to reduce the cost of doing business in Pakistan and ultimately enhance
competitiveness and industrialization.

• They rely on local expertise.

They rely mostly on local expertise. As 90% of their staff is local who are working
for Pakistan. While a large part of World Bank’s value is its global experience and
expertise, local knowledge is indispensable to effective development.

• Assistance:

During the past four years from FY 2006 - 2009, the Bank has approved 30
projects of total US$3.7 billion for Pakistan.

The World Bank is currently working with the Government of Pakistan to prepare a
new Country Assistance Strategy (CAS) for the period FY2010-2013.

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Suggestion
2010
Pakistan is a country having many natural resources in it. We should be self
sufficient, we should rely on ourselves. Sincerity is the key to success so we should
be sincere with our country and work hard for its development. If we have financial
crisis, we should not beg for aid from IMF and World Bank or any other
organization, but we can handle the problem by relying on ourselves. We should
pay more taxes and we should try to remove corruption from every department of
our beloved homeland. The government should make such opportunities that
foreign investment is attracted towards us. By applying these things we don’t need
to depend on IMF and World Bank.

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BIBLOGRAPHY
 http://economicpakistan.wordpress.com

 http://www.worldbank.org.pk/WBSITE/EXTERNAL/COUNTRIES/SOUTHASI
AEXT/PAKISTANEXTN/0

 www.wikipedia.com

 www.imf.org

 www.encyclopedia.com

 http://www.uiowa.edu/ifdebook/ebook2/contents/part1-II.shtml#A

 http://www.imf.org/external/pubs/ft/

 www.finance.gov.pk/

 http://www.britannica.com/

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 http://www.dailytimes.com.pk/default.asp?page=2010\01\22\story_22-1-
2010_pg5_3

 http://www.thenews.com.pk/top_story_detail.asp?Id=18119
2010
 International Economic by Hameed Shahid, (chap 12, international monetary
arangements)

 World development indicators, Volume 2006, By World Bank, World Bank.

International Economics Dept. Development Data Group

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