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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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