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Pakistan’s 60-year history with the IMF in one chart

Pakistan has taken 21 loans from the IMF

SAMAA | - Posted: May 16, 2019 | Last Updated: 2 years ago
SAMAA |
Posted: May 16, 2019 | Last Updated: 2 years ago
Pakistan’s 60-year history with the IMF in one chart

Photo: SAMAA Digital

Pakistan and the IMF are no strangers. Since 1958, they have made 21 agreements for loans, not including the most recent one signed on Monday.

The IMF is an international organisation of 189 countries working on monetary cooperation and international monetary stability. It helps member countries in three ways:

  • Economic surveillance — monitoring the economic and financial policies of its 189 member countries.
  • Lending — providing loans to member countries facing some degree of economic crises.
  • Capacity building —  modernizing member country economic policies and institutions, and training their people.

The IMF lends its member countries money. These programmes can be divided into:

Lending through GRA (General Resource Account) which is normal lending to not-so-poor and wealthy countries facing economic crisis.

Related: The IMF loan won’t solve all of Pakistan’s problems

Lending through PRGT (Poverty Reduction Growth Trust) which is lending to not-so-poor and poor countries at a relatively low interest rate to reduce poverty.

The IMF offers a total of 10 programmes through its PRGT and GRA. Of these, Pakistan has taken loans under four programmes. Not all 21 of these agreements are what we call ‘bail-outs’. Pakistan has entered into 12 Stand-by Agreements (SBAs) or what economists call bail-outs with the IMF.

Paying back the loans

Stand-by Agreements or SBAs are short- to medium-term loans that have to be paid back between 3.5 and 5 years. The loan may be given in up to three years, but is usually given in a 12 to 18-month period. Stand-by Agreements come under the General Resource Account, which means they’re not specifically designed for poor countries, unlike programmes under the Poverty Reduction Growth Trust.

But what about the remaining nine agreements? These agreements are for a number of IMF programmes aimed at poverty reduction, structural reform, containing a domestic economic crisis, or protecting smaller weaker economies against the effects of a broader international crisis.

Related: Pakistan formally asks the IMF for a bailout package

Of the nine loans, other than bail-outs taken by Pakistan, four were given under the PRGT, which means they were given to us to help alleviate poverty and boost economic growth.

New trend in our loans

When it comes to Pakistan, we see an interesting trend with the IMF programmes — they are becoming longer and larger. By longer, we mean the pay-out period is increasing. For example, between 1958 and 1977, all the programmes were of one year. Coincidentally, all the IMF programmes in this period were also bail-outs or Stand-by Agreements. There were a total of seven programmes.

Between 1980 and 1995, we were part of another seven programmes and all but one were between one and two years long.

Related: IMF dollars won’t be used to pay Chinese debt, says finance minister

Between 1997 and 2013 — when the PML-N took out the last $6.4 billion loan — there were a total of six programmes. With the exception of one, all of them were approximately three years long.

This is the 13th time we are going to the IMF to ask for a bail-out, and overall it will be the 22nd loan we have taken from the IMF.

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17 Comments

  1. Syed  April 12, 2019 7:10 am/ Reply

    Its was a numericall discussion and quick easy to understand.

  2. Danish  April 18, 2019 1:53 am/ Reply

    which govt paid back and which did not . plz explain tht as well

  3. Muhammad Baber Zaman  May 15, 2019 12:00 pm/ Reply

    Wrong Information.
    Pakistan Mr. Nawaz Sharif took loan $6.6B
    in 2013.

    IMF website reference. https://www.imf.org/en/News/Articles/2015/09/28/04/53/socar090413a
    You people written $4.4b the Wrong Digits

    • Bilal  May 19, 2019 11:21 am/ Reply

      It is 6.6billion sdr = 4.4 billion usd.

      • Amir Sandila  May 20, 2019 9:33 pm/ Reply

        Are bhai imf ki website par bhi dollar likha hua ha sdr nhi

  4. BQ  May 16, 2019 9:33 pm/ Reply

    The 4.4b figure in the graph is not supposed to be in USD. It is 4.4 in SDR, which is like the IMF’s currency, the graph shows dollar sign “$” as an error. It’s explained in the small print under the graph.

  5. Ahmed  May 17, 2019 2:17 am/ Reply

    Keep chanting slogan ‘Roti, Kapra aur makaan’

  6. Saleem  May 17, 2019 9:30 pm/ Reply

    Before writing an article, you need to understand why things are plotted on a graph? To compare things over time! If they are not the same currencies, like in this case, then what are you comparing?

    A footnote that they are different currencies doesn’t help at all. You should have converted everything into the same currency and put footnotes at the bottom showing their conversions. Otherwise, your graph is misleading.

    • Bilal  May 19, 2019 11:23 am/ Reply

      It was 6.6 billion sdr = $4.4 billion .

      So they did convert.

  7. Riaz Kataria  May 18, 2019 3:50 pm/ Reply

    PRO N-League report, misleading masses with wrong data shown above. All the military regime details with even $0.1B is out there, but only two figures are shown from 2007-2018, both are wrong. IMF approved $6.6B loan during PMLN tenure on Sep 4, 2013. Nawaz Sharif took it just after 4 months in officeWhat a pathetic situation Pakistan has gone through under FALSE-NEWS Networks! Allah Bless this country!

    • Bilal  May 19, 2019 11:25 am/ Reply

      You are wrong. It was 6.6 billion sdr = 4.4 billion dollar. Read last line is graph carefully . 6.6 x 0.61 = 4.4 . Youthion k demagon ny kam krna lagta hai chor dia hai

      • Khan  July 13, 2019 6:21 pm/ Reply

        IMF website says $ 6.6…and NOT USD 6.6 Billion!

  8. Ahmad  May 19, 2019 3:41 pm/ Reply

    Highly misleading report. At what conversion factor loan of 6.6 B USD converts to exactly 4.4 B SDR??

  9. Amna  June 20, 2019 7:27 am/ Reply

    what does it means that 21 agreements and out of that 12 bailout?

    • Samaa Digital  June 20, 2019 8:48 am/ Reply

      Pakistan entered into 12 Stand-by Agreements or what economists call bail-outs with the IMF. The other nine are loans or packages under different agreements, such as to help alleviate poverty and boost economic growth.

  10. Ali Muhammad Usmani  November 21, 2019 1:57 pm/ Reply

    Good Article, I need to get explanation: out of 21 programs, 12 were Bailouts, and rest are under PRGT. But as you ,mention “The IMF offers a total of 10 programmes through its PRGT and GRA. Of these, Pakistan has taken loans under four programmes.” Please Elaborate it.

  11. Afnan Siddique  August 15, 2020 1:43 pm/ Reply

    what are the failures and success of this agreement?

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