1.2 - Pakistan IMF

Question 1

What are SAPs?

Answer 1

Structured Adjustment Programmes
- set of policies a country has to implement in order to receive funds from IMF

Question 2

What is the IMF

Answer 2

International Monetary Fund
- Approves loans from World Bank
- Usually on the condition SAPs are applied
- ensures that countries receiving loans are more globalised

Question 3

What SAPs did the IMF impose on Pakistan for its latest IMF loan?

Answer 3

• reforms in public sector to open up to private enterprises
• eg. Selling off loss making government owned companies, opening up utilities to private providers
• Peg Rupee against USD

Question 4

How many IMF programs has Pakistan had since 1988?

Answer 4

12
Valued at £18.9 billion

Question 5

What is a trade deficit?

Answer 5

• the amount by which the value of a countries imports exceed that of its exports

Question 6

What was Pakistans trade deficit in 2018/19?

Answer 6

$23 billion

Question 7

How high were interest rates in 2018/19?

Answer 7

10.5%

Question 8

What was the GDP growth in 2018/19?

Answer 8

3.5%

Question 9

What are the issues with a high interest rate?

Answer 9

• Discourages people from taking out loans
• less people setting up businesses
• less people buying things
• less economical activity within the country

Question 10

What is China’s version of the World Bank?

Answer 10

Asian Development Bank
- notorious for Chinese debt trap

Question 11

What are the issues with SAPs proposed by the IMF?

Answer 11

• Privatisation of sectors may lead to lack of services in potentially unprofitable places, worse for the people
• Rupee being tied to USD can lead to prices of essential items being too high for people to afford