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Presented By
Ali Jabbar MBAE-2010-014
Muhammad Ahsan MBAE-2010-062Mushtaq Ahmad MBAE-2010-069
Presented To
Professor Shahid Mahmood
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The International Monetary Fund(IMF) is an organization of 187
countries, working to foster globalmonetary cooperation, secure financialstability, facilitate international trade,promote high employment and
sustainable economic growth, andreduce poverty around the world.
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1. Conceived in July, 1944 in New Hampshire, USA
2. Main Purpose was to avoid previous ecomomicdisastrous policies of Great Depression and 2nd WorldWar
3. To Ensure Stability of International monetary system System of exchange rates International payments that enables countries to transact with one other
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Type International EconomicOrganization
HeadquartersWashington, D.C.
United States Membership187 Nations Official LanguagesEnglish, French, and
Spanish Managing DirectorChristine Lagarde Main Organ Board of Governors
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The IMF's membership began to expand in the late1950s and during the 1960s as many African countriesbecame independent and applied for membership. Butthe Cold War limited the Fund's membership, with
most countries in the Soviet sphere of influence notjoining.
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MemberJoin -
DateMember
Join -
DateMember
Join -
DateMember
Join -
Date
Belgium1 Dec-45 Iraq1 Dec-45Iran,IslamicRepublic of(Iran)1
Dec-45 Venezuela, Dec-46
Bolivia1 Dec-45Luxembourg1
Dec-45 Chile1 Dec-45 Turkey Mar-47
Canada1 Dec-45Netherlands1
Dec-45 Mexico1 Dec-45 Italy Mar-47
China1 Dec-45 Norway1 Dec-45 Peru1 Dec-45 Syrian Arab Apr-47
Colombia1 Dec-45Philippines1
Dec-45 Costa Rica1 Jan-46 Lebanon Apr-47
(Czechoslovakia)
Dec-45SouthAfrica1
Dec-45 (Poland)1, 6 Jan-46 Australia Aug-47
Egypt1 Dec-45UnitedKingdom1
Dec-45 Brazil1 Jan-46 Finland Jan-48
Ethiopia1 Dec-45UnitedStates1
Dec-45 Uruguay1 Mar-46 Austria Aug-48
France1 Dec-45 (Yugoslavia)1,4,5 Dec-45 (Cuba)1, 7 Mar-46 Thailand May-49
Greece1 Dec-45DominicanRepublic1
Dec-45ElSalvador8
Mar-46 Pakistan Jul-50
Honduras1 Dec-45 Ecuador1 Dec-45 Nicaragua8 Mar-46 Sri Lanka Aug-50
Iceland1 Dec-45Guatemala1
Dec-45 Panama8 Mar-46 Sweden Aug-51
India1 Dec-45 Paraguay1 Dec-45 Denmark8 Mar-46 Myanmar Jan-52
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MemberJoin -
DateMember
Join -
DateMember Join -Date Member
Join -
Date
Japan Aug-52 Ghana Sep-57 Senegal Aug-62 Gabon Sep-63
Germany Aug-52 Malaysia Mar-58 Somalia Aug-62 Mauritania Sep-63
Jordan Aug-52 Tunisia Apr-58 Sierra Leone Sep-62 Madagascar Sep-63
Haiti Sep-53 Morocco Apr-58 Tanzania Sep-62 Algeria Sep-63
(Indonesia)9 Apr-54 Spain Sep-58 Kuwait Sep-62 Mali Sep-63
Israel Jan-00 Libya Sep-58 Jamaica Feb-63 Uganda Sep-63
Afghanistan, Jul-55 Portugal Mar-61 Niger Apr-63 Burundi Sep-63
Korea Aug-55 Nigeria Mar-61 Burkina Faso May-63 Congo Sep-63
Argentina Sep-56 New Zealand Aug-61 Cameroon Jul-63 Guinea Sep-63
Vietnam Sep-56 Nepal Sep-61 Central African Jul-63 Rwanda Sep-63
Ireland Aug-57 Cyprus Dec-61 Chad Jul-63 Kenya Feb-64
Saudi Arabia Aug-57 Liberia Mar-62 Congo Jul-63 Malawi Jul-65
Sudan Sep-57 Togo Aug-62 Benin Jul-63 Zambia Sep-65
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MemberJoin -
DateMember
Join -
DateMember
Join -
DateMember
Join -
Date
Singapore Aug-66 Barbados 29-Dec-70Guinea-Bissau
24-Mar-77 Vanuatu 28-Sep-81
Guyana Sep-66 Fiji 28-May-71 Seychelles 30-Jun-77AntiguaandBarbuda
25-Feb-82
Indonesia9 Feb-67 Oman 23-Dec-71So TomandPrncipe
30-Sep-77 Belize 16-Mar-82
Gambia, The Sep-67Samoa(Western
Samoa)
28-Dec-71 Maldives 13-Jan-78 Hungary 6-May-82
Botswana Jul-68 Bangladesh 17-Aug-72 Suriname 27-Apr-78St. Kittsand Nevis
15-Aug-84
Lesotho Jul-68 Bahrain 7-Sep-72SolomonIslands
22-Sep-78Mozambique
24-Sep-84
Malta Sep-68 Qatar 8-Sep-72 Cape Verde 20-Nov-78 Tonga 13-Sep-85
Mauritius Sep-68United ArabEmirates
22-Sep-72 Dominica 12-Dec-78 Kiribati 3-Jun-86
Swaziland Sep-69 Romania 15-Dec-72 Djibouti 29-Dec-78 Poland1,6 12-Jun-86
Yemen Sep-69 Bahamas, The 21-Aug-73 St. Lucia 15-Nov-79 Angola 19-Sep-89
EquatorialGuinea
22-Dec-69
Grenada 27-Aug-75St. Vincentand theGrenadines
28-Dec-79 Yemen, May-90
Cambodia31-Dec-
69Papua NewGuinea
9-Oct-75 Zimbabwe 29-Sep-80(Czechoslovakia)1,2,3
Sep-90
(Yemen ArabRepublic)10
(May22,1970
Comoros 21-Sep-76 Bhutan 28-Sep-81 Bulgaria 25-Sep-90
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Member Join -Date Member Join -Date MemberJoin -
DateMember
Join -
Date
Namibia 25-Sep-90 Armenia 28-May-92 Turkmenistan 22-Sep-92 Eritrea 6-Jul-94
Mongolia 14-Feb-91 Switzerland 29-May-92 San Marino 23-Sep-92BruneiDarussalam
10-Oct-95
Albania 15-Oct-91RussianFederation 1-Jun-92 Croatia
5
14-Dec-92 Palau 16-Dec-97
Lithuania 29-Apr-92 Belarus 10-Jul-92 Slovenia5 14-Dec-92 (East Timor) 23-Jul-02
Georgia 5-May-92 Kazakhstan 15-Jul-92 Serbia5 14-Dec-92 Montenegro5 18-Jan-07
Kyrgyz Republic(Kyrgyzstan)
8-May-92 Moldova 12-Aug-92CzechRepublic3
1-Jan-93 Kosovo 29-Jun-09
Latvia 19-May-92 Ukraine 3-Sep-92SlovakRepublic3
1-Jan-93 Tuvalu 24-Jun-10
Marshall Islands 21-May-92 Azerbaijan 18-Sep-92 Tajikistan 27-Apr-93 Tuvalu 24-Jun-10
Estonia 26-May-92 Uzbekistan 21-Sep-92 Micronesia, 24-Jun-93
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The IMF's mandate and governance haveevolved along with changes in the globaleconomy, allowing the organization to retain a
central role within the international financialarchitecture. The diagram below provides astylized view of the IMF's current governancestructure.
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DC
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Board of Governors
The Board Of Governors is the highest decision-making body of the IMF. It consists of one
governor and one alternate governor for eachmember country.
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Ministerial Committees
(1) International Monetary and Financial
Committee (IMFC)
(2) Development Committee
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International Monetary and FinancialCommittee
Responsible for advising, and reporting to, theBoard of Governors
Monitors developments in global liquidity andthe transfer of resources to developingcountries
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Development Committee
The Development Committee is a joint committee,
tasked with advising the Boards of Governors of theIMF and the World Bank on issues related to economicdevelopment in emerging and developing countries.
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The Executive Board
Consists of 24 members
The Board discusses everything from the IMF staff'sannual health checks of member countries' economiesto economic policy issues relevant to the global
economy.
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Surveillance
Technical Assistance
Lending
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Surveillance
A commitment to pursue policies that are conducive
To orderly economic growth Reasonable price stability To avoid manipulating exchange rates for unfair competitive advantage
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Technical Assistance
Central banking Monetary and exchange rate policy Tax policy
Objective
To improve the design and implementation ofmembers' economic policies. To reestablish government institutions in countries
following severe civil unrest or war.
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Lending
For Member Countries With Severe FinancialTroubles Such As:
Unable to pay its international bills Poses potential problems for the stability of the international
financial system, which the IMF was created to protect.
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Conditions of Loans
Reducing government borrowing
Higher taxes and lower spending
Higher interest rates to stabilize the currency.
Allow failing firms to go bankrupt.
Exchange Rate Reforms
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IMF Loans and BindsAn important source to manage the financial problemssuch as
Balance of payment deficits Stabilization of currency Rebuilding international reserves Managing liquidity problems
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A total of 11 agreements
9 By Civilian Government
2 By Military Government
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Facility
Date of Date of Amount Amount Amount
Arrangement Expiration Agreed Drawn Outstanding
Standby Arrangement Nov 24, 2008 Dec 30, 2010 7,235,900 4,936,035 4,936,035
Extended Credit Facility Dec 06, 2001 Dec 05, 2004 1,033,700 861,420 499,618
Standby Arrangement Nov 29, 2000 Sep 30, 2001 465,000 465,000 0
Extended Credit Facility Oct 20, 1997 Oct 19, 2000 682,380 265,370 0
Extended Fund Facility Oct 20, 1997 Oct 19, 2000 454,920 113,740 0
Standby Arrangement Dec 13, 1995 Sep 30, 1997 562,590 294,690 0
Extended Credit Facility Feb 22, 1994 Dec 13, 1995 606,600 172,200 0
Extended Fund Facility Feb 22, 1994 Dec 13, 1995 379,100 123,200 0
Standby Arrangement Sep 16, 1993 Feb 22, 1994 265,400 88,000 0
Structural Adjustment FacilityCommitment Dec 28, 1988 Dec 27, 1991 382,410 382,410 0
Standby Arrangement Dec 28, 1988 Nov 30, 1990 273,150 194,480 0
Total 12,341,150 7,896,545 5,435,653
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IS IMF GOOD OR BAD Good Cop Bad Cop
Double Barrel Question
There is no Free Lunch. IMF is just a push. A country has to rely on its own
resources and efforts A path to glory OR a never ending viscous cycle of
economic slavery
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World Bank is a vital source of financial and technical assistance
for countries who seek financial help/assistance.
Mission To fight poverty with passion Elimination of poverty Help developing countries
A combination of 2 unique development institutions
(IBRD) International Bank for Reconstruction and Development (IDA) International Development Association
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IBRD Aims to reduce poverty middle-income Countries Creditworthy poorer countries
IDA focuses on the world's poorest countries
Their work is complemented by that of the (IFC) International Finance Corporation (MIGA) Multilateral Investment Guarantee Agency (ICSID) International Centre for the Settlement of Investment
Disputes
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World Bank provides Low-interest loans, Interest-free credits Grants to developing countries
To invests in1. Education2. Health3. Public Administration4. Infrastructure
5. Financial and Private Sector Development6. Agriculture7. Environmental and Natural Resource management.
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Type International Economic Organization HeadquartersWashington, D.C. United States Membership 187 Nations Official LanguagesEnglish, French, and Spanish Managing DirectorRobert B. Zoellick Main OrganBoard of Governors OfficesMore than 100 Employees 10000
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Main purpose:
Elimination of poverty
Help developing countries
To facilitate international trade
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World Bank in a glance:
187 shareholders
Board of Governors Governors are Ministers of finance or Ministers of
Development. Annual Meetings of the Boards of Governors of the
WBG (and IMF). 25 Executive Directors
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The five largest shareholders1. France2. Germany3. Japan
4. United Kingdom5. United States
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The President of the World Bank,Robert B. Zoellick
Chairs meetings of the Boards of Directors
Responsible for overall management
President is selected by the Board of ExecutiveDirectors
A five-year, renewable term
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World Bank Building (Washington D.C)
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Executive Directors consider and decide on thefollowing:
IBRD loans
IDA credits and grants IFC investments Policies and strategic issues
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Executive Directors are also responsible for presentingto the Boards of Governors
An Audit of Accounts
An Administrative Budget An Annual Report on the Bank's operations and
policies
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Each Executive Director also serves on one or more offive standing committees:
Audit Committee (AC) Budget Committee (BC) Committee on Development Effectiveness (CODE) Committee on Governance and Executive Directors'
Administrative Matters (COGAM)
Human Resources Committee (HRC)
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IBRD and IDA provide
Low or no interest loans (credits)
Grants to countries
WBG do not operate for profit.
WBG pay for their own operating costs
They do not furnish funds for overhead.
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World Bank & Pakistan
Projects, Programs & Results
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Helping the Federal and Provincial Governments
Growth
Investment
Employment Generation.Social works like
1. Education
2. Health
3. Clean Drinking Water4. Sanitation.
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Approx US$1.1 billion worth of investment in
In Punjab in Education Sector :
Teacher recruitment
Net primary school enrollment in Punjab increasedfrom 45 percent in 2001 to 62 percent in 2008.
Female primary enrollment went up from 43 percentto 60 percent.
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Investment In Sindh In Education Sector : Merit-based recruitment of 13,000 teachers
300 new private coeducational primary schools in
underserved rural communities
These schools have over 26,000 students
School participation rate has increased from 30percent to 80 percent
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In July and August 2010, Pakistan experienced the worst
floods in its history. Floods affected 78 districts
10 percent of Pakistans population
Bank grants: Consisting of $300 million in import financing
$20 million for highways rehabilitation $125 million to finance cash transfers to around 1.4
million flood affected families.
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October 8, 2005 earthquake 2.8 million homeless, and
570,000 houses damaged
The Bank provided $400 million for Earthquake Reconstruction
$220 million was for housing reconstruction.
350,000 houses have been completed
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The Benazir Income Support Program (BISP)
Monthly payment of Rs. 1,000 to qualifying households.
In 2011 it is expected to cover about 7 million households
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Pakistan Poverty Alleviation Fund (PPAF)
Formation of 80,000 community organizations Provided 1.9 million micro-credit loans
16,000 community infrastructure schemes
Training support for 232,000 people in enterprise
development skills.
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Financing reconstruction of 201 primary schools
35 other buildings including government offices
police stations, and vocational training institutes
24 rural roads.
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In Education Sector
In Power Sector
(Challenge ofElectricity and Power)
On Roads (Linkagebetween Poverty and
Infrastructure)In Banking andPrivatization Sectorboth Public and Private
sector participation
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An Informal group of creditor countries withno permanent members which functions on theprinciple of unanimity on the terms to be
provided to debtor countries and of equalBurdon sharing among its creditor countries.Its meetings are always held in Paris
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Established in 1956 after the devastation of World WarII
A group of 19 of some of the worlds biggest CreditorCountries
Provides Financial Services Such As Debt Restructuring Debt Relief Debt Cancellation After War Restructuring Funding
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Chaired by the Director General of the
Treasury and Economic Policy Department, Mr
Ramon FERNANDEZ
Members meets every six weeks at the FrenchMinistry of the Economy, Finance, andIndustry in Paris.
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French Version Secrtariat du Club de
ParisDirection gnrale duTrsor et de la Politiqueconomique
139, rue de BercyTldoc 551
75572 Paris Cdex 12France
English Version
Secretariat of the Paris ClubBranch of the Treasury andEconomic Policy139, rue de Bercy
Tldoc 55175572 Paris Cedex 12France
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1956 (May 16): First Paris Club Agreement (Argentina)1966: First Paris Club Agreement with an Asian country (Indonesia)1976: First Paris Club Agreement with an African country (Zaire)1981: First Paris Club Agreement with a European country (Poland)1982: The Mexican crisis triggers the debt crisis of the 1980s.1987: First Paris Club Agreement under the Venice terms (Mauritania)1988: First Paris Club Agreement implementing the Toronto terms (Mali)
1990: First Paris Club Agreement implementing the Houston terms(Morocco). First debt swap clause in a debt treatment agreement1991: Exceptional exit treatments granted to Poland and Egypt. First ParisClub Agreement implementing the London terms (Nicaragua)1992: First Paris Club Agreement with Russia (deferral)1995: First Paris Club Agreement implementing the Naples terms
(Cambodia)
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1997: Russia joins the Paris Club. First early repayment operation(Argentina)1998: First Paris Club Agreement implementing the Lyon termsunder the HIPC initiative (Uganda)1999: Enhanced HIPC Initiative. First Paris Club Agreementimplementing the Cologne terms under the HIPC initiative
(Mozambique)2000: Uganda is the first HIPC-eligible country to reach theEnhanced HIPC Initiative Completion Point2001: Exceptional debt treatments granted to the Former Republicof Yugoslavia2003: Paris Club creditors approve the Evian Approach2004: First debt treatment under the Evian Approach (Kenya).
Phased exit treatment granted to Iraq2005: Exceptional treatment granted to countries hit by thetsunami (Indonesia and Sri Lanka). Exit treatment granted toNigeria2006: 50th anniversary of the Paris Club2007: First buyback operations at market value below par (Gabon,Jordan)
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HIPC During the 1990s,the club started differentiating between HIPC
& NON-HIPC countries Larger debt reductions for HIPC countries Less debt reductions for non HIPC countries
In 2004, Writing Off Iraq Debts
Eliminated 18 billion $ worth of Nigerian Debt after apayment of 12 billion $
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There are two categories of membershipsand then there are observers.
Permanent members
Associated members
Observers
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A total of 19 creditor member countries All of them are currently worlds biggest economies These creditor countries have constantly applied the
terms defined in the Paris Club Agreed Minutes totheir bilateral claims and have settled any bilateraldisputes or arrears with Paris Club countries, if any.
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Australia Austria Belgium Canada
Denmark Finland France Germany Ireland Italy
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Japan Netherlands Norway Russia Spain Sweden Switzerland United Kingdom United States
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Associated members can also activelyparticipate in negotiation sessions, subject tothe agreement of permanent members and of
the debtor country. The following 13 countries have participated as
creditors in some Paris Club agreements
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Abu Dhabi Argentina Brazil Israel Kuwait Mexico
Morocco
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New Zealand Portugal South Africa South Korea Trinidad and Tobago Turkey
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Only attend negotiation meetings Do not participate Do not sign formal agreements
Just Observe the Proceedings
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1. Representatives of international institutions:-IMF -World Bank - European Commission ADB
2. Representatives of permanent members of the ParisClub which have no claims concerned by the debttreatment but nevertheless want to attend thenegotiation meeting
3. Representatives of non Paris Club countries which have
claims on the debtor country concerned but are not in aposition to sign the Paris Club agreement as associatedmembers
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A one-day meeting Topics of discussion may include
External debt situation of debtor countries
Methodological issues regarding the debt ofdeveloping countries.
Negotiation meetings
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1. Delegates from the debtor country.
(4-6 members)
2. Creditor country representatives.3. International Monitory Fund (IMF),4. International Organizations, which are invited
as observers.
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Negotiation Meetings PrerequisitesA country wanting to reschedule its debt with Paris
club must carry out the following terms
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1. Demonstrate that it is not able to meet itsfinancial obligations
2. Prepare a detailed request
3. Implements a structural adjustment program
supported by IMF
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Initially on case-to-case bases
But with the advent of the debt crisis in 1980,
standard terms were introduced
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Toronto Terms
Introduced in 1988
Granted 33% debt relief Rescheduling of 25 years maturity, including a 14 years
grace period.
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London Terms(Also known as Enhanced Toronto Terms)
Formulated in 1991 to replace the Toronto Terms Provided 50% debt reduction Debt rescheduling for 30 years, 12-year grace period, Interest rates at least as low as the original interest
rates.
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Naples Terms
Applied in December 1994, Increased the percentage of debt relief to 67%
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Lyons Terms
Applied in 1996 Provided 80% present value reduction. Available only to HIPC
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Total amount of agreements 422
Total amount of debtor countries 88
Total amount of debt 553 Billion $
Total amount of countries in Toronto Terms" 59
Total amount of countries in London Terms" 21
Total amount of countries in "Naples Terms" 36
Total amount of countries in "Cologne Terms" 33
Medium And Long Terms Debts Of Developing Countries
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Medium And Long Terms Debts Of Developing Countries
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An assessment by potential lenders of the country's capacity to repay itsexternal debt.
Being creditworthy is a key to success for developing countries
Governments of debtor countries have a significant impact
Factors that influence creditworthiness are Economic factors, such as the capacity of the country to generate balance-of-
payment receipts, and the volatility of these receipts. Financial factors, such as the debt repayment profile. Political factors
Creditworthiness usually takes a long time to build,
Failure to full fill debt obligations can rapidly damage credit worthiness.
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A dynamic fashion tomanage debts
Buying back of debtahead of schedule Reduce ones debt service Morocco 2003-2007
3.8Billion $ in 2005
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The Paris Club was put into place to help poor,under developed & developing countries to getback on their feet and become a vibrant selfsustained country on the world trade and bankingmarkets and so far it has been doing its job onneutral ground and is playing a very vital role forthe economic as well as social growth andsustainability of these countries
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http://www.imf.org/external/index.htm http://en.wikipedia.org/wiki/International_Monetary
_Fund http://timesofindia.indiatimes.com/topic/Internation
al-Monetary-Fund http://www.worldbank.org/ http://en.wikipedia.org/wiki/World_Bank http://en.wikipedia.org/wiki/Paris_Club http://www.slate.com/articles/news_and_politics/ex
plainer/2003/05/what_is_the_paris_club.html
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