In Pakistan the reforms were introduced as a result of the pressure fr...
In Pakistan, the reforms were introduced as a result of pressure from both the International Monetary Fund (IMF) and the World Bank. These international financial institutions played a significant role in shaping Pakistan's economic policies and pushing for reforms.
- Pressure from the IMF:
The IMF is an international organization that provides financial assistance and advice to member countries facing economic difficulties. Pakistan has often sought financial assistance from the IMF during times of economic crisis. In exchange for financial support, the IMF usually imposes conditions or policy reforms aimed at stabilizing the economy and promoting sustainable growth.
1. Economic Crisis: Pakistan has faced numerous economic crises over the years, characterized by high inflation, fiscal deficits, and a lack of foreign exchange reserves. In such situations, the IMF has provided bailout packages to help stabilize the economy.
2. Policy Reforms: As a condition for receiving financial assistance, the IMF has often demanded policy reforms in various sectors, including fiscal discipline, monetary policy, tax reforms, privatization, and structural adjustments. These reforms are aimed at addressing the root causes of economic instability and promoting long-term growth.
- Pressure from the World Bank:
The World Bank is another international financial institution that provides loans and grants to developing countries for development projects. Like the IMF, the World Bank also influences economic policy in recipient countries.
1. Development Projects: The World Bank finances various development projects in Pakistan, such as infrastructure development, education, healthcare, and poverty reduction. In order to qualify for funding, the government of Pakistan is required to implement certain reforms and meet specific criteria set by the World Bank.
2. Policy Advice: The World Bank also provides policy advice and technical assistance to the government of Pakistan. It conducts research and analysis on various economic and social issues, and recommends policy measures to address these challenges. The government often takes these recommendations into account when formulating its policies and reforms.
- Joint Influence:
Both the IMF and the World Bank have a common goal of promoting economic stability, growth, and poverty reduction. They work closely together and often coordinate their efforts in providing financial assistance and policy advice to member countries. In the case of Pakistan, the pressure from both institutions has played a crucial role in shaping the country's economic reforms and policies.
Overall, the reforms introduced in Pakistan were a result of pressure from both the IMF and the World Bank, as they provided financial assistance, imposed conditions, and offered policy advice aimed at stabilizing the economy and promoting sustainable growth.
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