Imf Final Report

8/8/2019 Imf Final Report

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Prepared for

SIR RIAZ AHMED(Lecturer)

Prepared byS.M.ADIL RAZA BM-25264

TAUQEER IQBAL BM-25301

NIAZ AHMED BM-25077

UMER SAYEED BM-25303

SHAZIA BASHIR BM-25069

November 11,2010


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I.M.F (international monetary fund)

11TH NOVEMBER 2010

TABLE OF CONTENTTABLE OF CONTENT

ACKNOWLEDGMENT.ACKNOWLEDGMENT.

GLOSSARY.GLOSSARY.

ABSTRACT.ABSTRACT.

INTRODUCTION.INTRODUCTION.

EXECUTIVE SUMMARY.EXECUTIVE SUMMARY.

LITERATURE REVIEW.LITERATURE REVIEW.

RESEARCH METHODOLOGY FOR DATA.RESEARCH METHODOLOGY FOR DATA.

SUGGESTIONS.SUGGESTIONS.

CONCLUSION.CONCLUSION.

REFERENCES.REFERENCES.

APPENDIXAPPENDIX

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LETTER OF ACKNOWLEDGEMENT:LETTER OF ACKNOWLEDGEMENT:

First of all, we would like to say Alhamdulillah, for giving us the strength and health to do

this project work until it done not forgotten to our family for providing everything, such as

money, to buy anything that are related to this project work and their advise, which is

the most needed for this project. Internet, books, computers and all that as our source

to complete this project. They also supported me and encouraged me to complete this

task so that we will not procrastinate in doing it.

Then we would like to thank our teacher, Sir Riaz Daar for guiding us and our friends

throughout this project. We had some difficulties in doing this task, but he taught us

patiently until we knew what to do. He tried and tried to teach us until we understand

what we supposed to do with the project work.

Last but not least, me and my group members and friends who were doing this project

with us and sharing our ideas. They were helpful that when we combined and discussed

together, we had this task done and the way we research about our project it is very

hard but our university and friends helped me a lot therefore now we are in a position to

represent the most authentic and up to date knowledge about the project report and it

will also help us to know the most rare facts and figures about the topic

Sincerely with regards

S.M.ADIL RAZA ( BM-25264)

TAUQEER IQBAL ( BM-25301)

NIAZ AHMED ( BM-25077)

UMER SAYEED ( BM-25303)

SHAZIA BASHIR ( BM-25069)

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GLOSSARYGLOSSARY


SDR (special drawings rights )

WB ( world bank )

EF ( extended facility )

lDC ( less developed countries )

SFF ( supplementary financing facility)

BSFF ( buffer stock financing facility )

T.F ( trust fund )

CF ( common Fund )

FC ( fund conditionality )

WTO ( World Trade organization )

UNO ( united nation organization )

GDP ( Gross National Product )

SRF ( supplemental reserve facility )

SCA ( special contingent account )

IMFC ( international monetary and fiscal committee )

QFRG ( quota formula review group )

PIN ( public information notice )

NPV ( net present value )

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ABSTRACT.ABSTRACT.

Crises on external sovereign debt are typically defined as defaults. Such a definition adequately captures

debt-servicing difficulties in the 1980s, a period of numerous defaults on bank loans. However, defining

defaults as debt crises is problematic for the 1990s, when sovereign bond markets emerged. Not only

were there very few defaults in the 1990s, but liquidity indicators do not play any role in explaining

defaults in this period. In order to overcome the resulting dearth of data on defaults and capture the

evolution of debt markets in the 1990s, we define debt crises as events occurring when either a country

defaults or its bond spreads are above a critical threshold. We find that, when information from bond

markets is included, standard indicatorssolvency and liquidity measures, as well as macroeconomic

control variablesare significant.

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INTRODUCTION:INTRODUCTION:

What does the International Monetary Fund do?What does the International Monetary Fund do?

The IMF is the world's central organization for international monetary cooperation. It isan organization in which almost all countries in the world work together to promote thecommon good.

The IMF's primary purpose is to ensure the stability of the international monetarysystemthe system of exchange rates and international payments that enablescountries (and their citizens) to buy goods and services from each other. This isessential for sustainable economic growth and rising living standards.

To maintain stability and prevent crises in the international monetary system, the IMFreviews national, regional, and global economic and financial developments. Itprovides advice to its 184 member countries, encouraging them to adopt policies thatfoster economic stability, reduce their vulnerability to economic and financial crises, andraise living standards, and serves as a forum where they can discuss the national,regional, and global consequences of their policies.

The IMF also makes financing temporarily available to member countries to help themaddress balance of payments problemsthat is, when they find themselves short offoreign exchange because their payments to other countries exceed their foreignexchange earnings.

And it provides technical assistance and training to help countries build the expertise

and institutions they need for economic stability and growth.

Why was it created?

The IMF was conceived in July 1944, when representatives of 45 governments meetingin the town of Bretton Woods, New Hampshire, in the northeastern United States,agreed on a framework for international economic cooperation. They believed that sucha framework was necessary to avoid a repetition of the disastrous economic policiesthat had contributed to the Great Depression of the 1930s.

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Executive SummaryExecutive Summary

FAST FACTS ON THE IMF

Membership: 187 countries

Headquarters: Washington, D.C.

Executive Board: 24 Directors representing countries or groups of countries

Staff: Approximately 2,500 from 158 countries

Total quotas: US$328 billion (as of 8/31/10)

Additional pledged or committed resources: $600 billion

Loans committed (as of 8/31/10): US$200 billion, of which US$146 billion have

not been drawn (see table)

Biggest borrowers (credit outstanding as of 8/31/10): Romania, Ukraine,

Hungary

Surveillance consultations: Concluded in FY2010120 countries in FY2010,

of which 111 voluntarily published information on their consultation (as of

05/31/10)

Technical assistance: Field delivery in FY2009181 person years

Original aims: Article I of the Articles of Agreement sets out the IMFs main

goals:

o promoting international monetary cooperation;

o facilitating the expansion and balanced growth of international trade;

o promoting exchange stability;

o assisting in the establishment of a multilateral system of payments; and

o making resources available (with adequate safeguards) to members

experiencing balance of payments difficulties

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LITERATURE REVIEWLITERATURE REVIEW

PURPOSE AND OBJECTIVESPURPOSE AND OBJECTIVES

The main purpose of International Monetary Fund is to create an economic system that

can instill stability and growth in the world economy by economic cooperation among

the nations. It aims at establishing exchange rate stability, and elimination of the

shortage of international liquidity. For ensuring exchange rate stability, it discourages

the practice of competitive depreciation of exchange rates. IMF also acts as an

institution for ensuring international monetary cooperation.

Another important purpose of IMF is the expansion of global trade, which in turn will not

only promote high level of employment and income, but would also be able to sustain it.

IMF also intends to promote international trade by removing foreign exchange

restrictions. It aims at maintaining balanced growth of the world economy.

IMF provides assistance to its member countries for correcting BOP or balance of

payment disequilibrium. It provides liberal assistance to the countries, especially to the

less developed countries to overcome BOP difficulties.

Besides, IMF also provides technical assistance to the member countries for promoting

their economic growth and stability. It implements lending operations for helping thecountries for overcoming economic crisis.

To promote co-operation among economies of world.

To strengthen the economies of member countries by making fund's

resources available to them.

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To promote exchange stability and to facilitate the expansion and balanced

growth of International trade.

To lesson the chances of disequilibrium in the international BOP of

member countries.

To reduce the poverty in member countries and to promote high

employment by facilitating sustainable economic growth.

RESOURCES, GOVERNANCE AND ORGANIZATIONRESOURCES, GOVERNANCE AND ORGANIZATION

ResourcesResources: The IMFs: The IMFs resourcesresources are provided by its member countries, primarilyare provided by its member countries, primarily

through payment ofthrough payment ofquotasquotas, which broadly reflect each countrys economic size. At the, which broadly reflect each countrys economic size. At the

April 2009April 2009 G-20 SummitG-20 Summit, world leaders, world leaders pledged to supportpledged to support a tripling of the IMF's lendinga tripling of the IMF's lending

resources from about US$250 billion to US$750 billion. To deliver on this pledge, theresources from about US$250 billion to US$750 billion. To deliver on this pledge, the

current and new participants in thecurrent and new participants in the New Arrangements to Borrow (NAB)New Arrangements to Borrow (NAB) agreed toagreed to

expand the NABexpand the NAB to about US$550 billion, which was approved by the Executive Boardto about US$550 billion, which was approved by the Executive Board

of the IMF on April 12, 2010. Members are currently considering the appropriate scaleof the IMF on April 12, 2010. Members are currently considering the appropriate scale

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of an increase in quotas, in the 14th General Review of Quotas to be concluded byof an increase in quotas, in the 14th General Review of Quotas to be concluded by

January 2011.January 2011.

Historically, the annual expenses of running the Fund have been met mainly by interestHistorically, the annual expenses of running the Fund have been met mainly by interest

receipts on outstanding loans, but the membership recently agreed to adopt areceipts on outstanding loans, but the membership recently agreed to adopt a newnew

income modelincome model based on a range of revenue sources better suited to the diversebased on a range of revenue sources better suited to the diverse

activities of the Fund.activities of the Fund.

GovernanceGovernance and organizationand organization: The IMF is accountable to the governments of its: The IMF is accountable to the governments of its

member countries. At the top of itsmember countries. At the top of its organizational structureorganizational structure is theis the Board of GovernorsBoard of Governors,,

which consists of one Governor and one Alternate Governor from each memberwhich consists of one Governor and one Alternate Governor from each member

country. The Board of Governors meets once each year at thecountry. The Board of Governors meets once each year at the IMF-World Bank AnnualIMF-World Bank Annual

MeetingsMeetings. Twenty-four of the Governors sit on the International Monetary and Finance. Twenty-four of the Governors sit on the International Monetary and Finance

Committee (IMFC) and meet at least twice each year.Committee (IMFC) and meet at least twice each year.

Twenty-four of the Governors sit on the International Monetary and Finance CommitteeTwenty-four of the Governors sit on the International Monetary and Finance Committee

(IMFC) and meet twice each year. The day-to-day work of the IMF is conducted by its(IMFC) and meet twice each year. The day-to-day work of the IMF is conducted by its

24-member24-memberExecutive BoardExecutive Board, which represents the entire membership; this work is, which represents the entire membership; this work is

guided by the IMFC and supported by the IMFs professional staff. The Managingguided by the IMFC and supported by the IMFs professional staff. The Managing

Director is Head ofDirector is Head ofIMF staffIMF staffand Chairman of the Executive Board, and is assisted byand Chairman of the Executive Board, and is assisted by

three Deputy Managing Directorsthree Deputy Managing Directors

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ORGANIZATION OF THE FUNDORGANIZATION OF THE FUND

The IMF has a management team and 17 departments that carry out its country, policy,

analytical, and technical work. One department is charged with managing the IMF's

resources. This section also explains where the IMF gets its resources and how they

are used.

Management:

The IMF has a Managing Director, who is head of the staff and Chairman of the

Executive Board. He is assisted by a First Deputy Managing Director and two o ther

Deputy Managing Directors

Quotas:

The IMF's resources come mainly from the money that countries pay as their capital

subscription when they become members.

Special Drawing Rights:

The IMF's resources come mainly from the money that countries pay as their capital

subscription when they become

members.

Gold:

The IMF also has some of the largest official holders of gold in the world.

Borrowing arrangements:

The IMF keeps track of its future ability to lend by monitoring its one-year forward

commitment capacity, which gives an indication of resources available for lending.

Income model reform:

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In May 2008, the IMF's Board of Governors endorsed a new income model for the IMF,

aimed at ending the organization's over-reliance on lending income.

Staff of international civil servants:

The IMF's employees come from all over the world; they are responsible to the IMF and

not to the authorities of the countries of which they are citizens. The IMF staff is

organized mainly into area; functional; and information, liaison, and support

responsibilities.

FUNCTION OF THE FUND:FUNCTION OF THE FUND:

IMF main function is to purchase and sell the member countries currencies.

If any country is facing adverse balance of payment and facing the difficulty to get the

currency of creditor country, it can get short term credit from the fund to clear the debit.

The IMF allows the debtor country to purchase foreign currency in exchange for its own

currency up to 75% of its quota plus an addition 25% each year. The maximum limit of

the quota is 200% in special circumstances.

If the demand of any particular country currency increases and its stock with the fund

falls below 75% of its quota, the IMF can declare it scare. But IMF also tries to increase

its supply by these methods.

IMF purchases the Scare currency by gold.

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IMF borrows from those countries scare currency that has surplus amount.

IIMF allows the debtorcountries to impose restrictions on the imports of creditor

country.

IMF is very useful to avoid the competitive depreciation which took place before World

war-II.

When the devaluation policy is indispensable for any country then IMF provides loan to

correct the balance of payment of that country

The IMF does a number of supervisory works relating to financial dealings between

different countries. Some of the works done by IMF are:

Helping in international trade, that is, business between countries

Looking after exchange rates

Looking after balance of payments

Helping member countries in economic development

SHORT-TERM CREDIT INSTITUTION

IMPROVING BOP POSITION

INTERNATIONAL CONSULTATIONS

PULLING DOWN TRADE BARRIERS

RESERVOIR OF CURRENCIES

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I.M.F AND GOLD STANDARD:I.M.F AND GOLD STANDARD:

Gold Standard Act of 1900

The Gold Standard Act of 1900 (31 Stat. 45) was the culmination of an epic political

battle over monetary policy in the United States. But it also reflected an age-old debate

over whether gold or silver should control monetary measurements. The act set the

value of gold at $20.67 per troy ounce (troy weight is based on a pound of twelve

ounces). The act further states that:

the dollar consisting of twenty-five and eight-tenths grains of gold nine-tenths fine ...

shall be the standard unit of value, and all forms of money issued or coined by the

United States shall be maintained at a parity of value with this standard, and it shall

be the duty of the Secretary of the Treasury to maintain such parity.

BACKGROUND

Gold and silver have long served as monetary standards throughout the world, but

debate raged as to their relative values and whether one of those precious metals

should be preferred over the other in the monetary system. The introduction of paper

currency complicated this debate because it

usually promised to pay gold or silver upon demand. Such specie payments, or

payments in coin, were often suspended in times of monetary stress. The Civil War was

one such event.

After the war the question of whether the country should return to a specie-based

monetary system was hotly contested. A populist movement sought to inflate farm

prices through the increased use of paper currency and called for the use of silver,

which was more plentiful than gold, as backing for that currency. The high point of that

movement was the "Cross of Gold" speech, given by the lawyer and politician William

Jennings Bryan to the Democratic convention in 1896. Bryan became the Democratic

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candidate for president but lost in the general election, and the United States went onto

a gold standard in 1900 with the adoption of the Gold Standard Act.

The Great Depression in the 1930s resulted in the abandonment of the gold standard by

the United States. President Franklin Roosevelt changed the valuation of gold to $35

per ounce of gold as an inflationary measure, where an increase in the valuation of gold

tends to increase price levels in general. Farmers, for example, will get more dollars for

their grain, but they will have to pay more for the goods purchased with the inflated

grain sale proceeds. The Gold Reserve Act of 1934 also withdrew all gold from

circulation, and Congress nullified clauses in public and private contracts that

provided for payment in gold. In 1935 the U.S. Supreme Court considered the

constitutionality of the ban on gold in the so-called Gold Clause Cases, where the court

upheld the statute's negation of gold clauses: Perry v. United States,Nortz v. United

States, and Norman v. Baltimore & O.R.R.

THE INTERNATIONAL MONETARY FUND

At the conclusion of World War II, the United States and Great Britain created the

International Monetary Fund (IMF). That body set a "value" of $35 per ounce for gold.

Other countries participating in the IMF were required to maintain their currencies at a

specified parity against the dollar, thereby tying much of the world to a dollar standard

that was in turn tied to a gold standard.

That system, however, fell apart after debilitating inflation in the 1960s caused a run

as countries began exchanging dollars for gold from the U.S. Treasury when world gold

prices exceeded the $35.00 value set under the IMF agreementon U.S. gold stocks.

President Richard Nixon announced on August 15, 1971, that the United States would

no longer exchange dollars for gold under the IMF standard. Within two years, currency

exchange rates were allowed to float against each other. These floating currency rates

are set by market forces rather than the artificial parity rates set by the IMF, and change

constantly in foreign exchange transactions conducted through banks and currency

dealers. In 1975 the IMF eliminated gold as the basis for international monetary

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standards, and two years later, the prohibition against gold clauses was repealed,

allowing private sales of gold.

A gold standard has eight distinguishing characteristics:

The value of the principal unit of currency of a country on a gold standard is

measured in relation to a fixed and predetermined quantity of gold.

Paper money and gold can be equally exchanged for each other at a legal

predetermined rate. This is known as inter-convertibility.

Metal coins (other than gold) can be used only as token money. That is, the

nominal or face value of the coin must be greater than the intrinsic value of the

metal in the coin.

Monetary authorities will accept gold bullion on demand and coin it or convert the

domestic currency into gold. A nominal service fee (or seigniorage) is charged to

cover minting costs while providing the government with revenue. The monetary

authorities will also exchange paper currency and nongold coins for gold on

demand. This is referred to as convertibility.

International reserves are mostly held in gold.

Individuals in the country are free to hold any amount of gold in bullion or coin.

Individuals are free to import and export gold in any amount.

The creation of paper money is linked to the amount of gold reserves held by the

central banking system.

ROLE OF THE GOLD:ROLE OF THE GOLD:

The amended articles provide a gradual reduction in the role of gold in the international

monetary system thus

Elimination of the function of gold as the common denominator of par value and

as the unit of value of the special drawings rights

The abolition of the official price of gold

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The abrogation of obligatory payments in gold by members to the fund and by

the fund to the members and elimination of the authority for the fund to accept

gold except under decision taken with the majority of the total voting power

The fund is to complete the disposition of 50 million ounces of gold

The authorization of the fund to dispose of the remainder of its gold holdings in

various ways by sale at market prices or official prices

Profit on the sales of gold to be placed in the special account for use in the

ordinary operations or for the other use including those for the special benefit of

members with low per captia income

The fund is to avoid the management of the price or the establishment of a fixed

price in the gold market

The members to collaborate with the funds and the others members in order to

promote better surveillance of international liquidity and making SDRs the

principal reserves asset in the international monetary system

SDRSDR

SPECIAL DRAWING RIGHTSSPECIAL DRAWING RIGHTS

Special Drawing Rights (SDRs)

September 29, 2010

The SDR is an international reserve asset, created by the IMF in 1969 to supplement its

member countries official reserves. Its value is based on a basket of four key

international currencies, and SDRs can be exchanged for freely usable currencies. With

a general SDR allocation that took effect on August 28 and a special allocation on

September 9, 2009, the amount of SDRs increased from SDR 21.4 billion to SDR 204

billion (equivalent to about $308 billion, converted using the rate of August 31, 2010).

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The role of the SDR

The SDR was created by the IMF in 1969 to support the Bretton Woods fixed exchange

rate system. A country participating in this system needed official reserves

government or central bank holdings of gold and widely accepted foreign currencies

that could be used to purchase the domestic currency in foreign exchange markets, as

required to maintain its exchange rate. But the international supply of two key reserve

assetsgold and the U.S. dollarproved inadequate for supporting the expansion of

world trade and financial development that was taking place. Therefore, the

international community decided to create a new international reserve asset under the

auspices of the IMF.

However, only a few years later, the Bretton Woods system collapsed and the major

currencies shifted to a floating exchange rate regime. In addition, the growth in

international capital markets facilitated borrowing by creditworthy governments. Both of

these developments lessened the need for SDRs.

The SDR is neither a currency, nor a claim on the IMF. Rather, it is a potential claim on

the freely usable currencies of IMF members. Holders of SDRs can obtain these

currencies in exchange for their SDRs in two ways: first, through the arrangement ofvoluntary exchanges between members; and second, by the IMF designating members

with strong external positions to purchase SDRs from members with weak external

positions. In addition to its role as a supplementary reserve asset, the SDR, serves as

the unit of account of the IMF and some other international organizations.

Basket of currencies determines the value of the SDR

The value of the SDR was initially defined as equivalent to 0.888671 grams of fine gold

which, at the time, was also equivalent to one U.S. dollar. After the collapse of the

Bretton Woods system in 1973, however, the SDR was redefined as a basket of

currencies,today consisting of the euro, Japanese yen, pound sterling, and U.S. dollar.

The U.S. dollar-equivalent of the SDR is posted dailyon the IMFs website. It is

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calculated as the sum of specific amounts of the four basket currencies valued in U.S.

dollars, on the basis of exchange rates quoted at noon each day in the London market.

The basket composition is reviewed every five years by the Executive Board to ensure

that it reflects the relative importance of currencies in the worlds trading and financial

systems. In the most recent review (in November 2005), the weights of the currencies in

the SDR basket were revised based on the value of the exports of goods and services

and the amount of reserves denominated in the respective currencies which were held

by other members of the IMF. These changes became effective on January 1, 2006.

The next review will take place in late 2010.

The SDR interest rate

The SDR interest rate provides the basis for calculating the interest charged to

members on regular (non-concessional) IMF loans, the interest paid to members on

their SDR holdings and charged on their SDR allocations, and the interest paid to

members on a portion of their quota subscriptions. The SDR interest rate is determined

weekly and is based on a weighted average of representative interest rates on short-

term debt in the money markets.

DR allocations to IMF members

Under its Articles of Agreement, the IMF may allocate SDRs to members in proportion

to their IMF quotas. Such an allocation provides each member with an asset (SDR

holdings) and an equivalent liability (SDR allocation). If a members SDR holdings rise

above its allocation, it earns interest on the excess; conversely, if it holds fewer SDRs

than allocated, it pays interest on the shortfall.

There are two kinds of allocations:

General allocations of SDRs. General allocations have to be based on a long-term

global need to supplement existing reserve assets. Decisions to allocate SDRs have

been made three times. The first allocation was for a total amount of SDR 9.3 billion,

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distributed in 1970-72 in yearly installments. The second allocation, for SDR 12.1 billion,

was distributed in 197981 in yearly installments.

The third general allocation was approved on August 7, 2009 for an amount of SDR

161.2 billion and took place on August 28, 2009. The allocation increased

simultaneously members SDR holdings and their cumulative SDR allocations by about

74.13 percent of their quota.

Special allocations of SDRs. A proposal for a special one-time allocation of SDRs was

approved by the IMF's Board of Governors in September 1997 through the proposed

Fourth Amendment of the Articles of Agreement. Its intent is to enable all members of

the IMF to participate in the SDR system on an equitable basis and correct for the fact

that countries that joined the Fund after 1981more than one-fifth of the current IMF

membershiphad never received an SDR allocation.

The Fourth Amendment became effective for all members on August 10, 2009 when the

Fund certified that at least three-fifths of the IMF membership (112 members) with 85

percent of the total voting power accepted it. On August 5, 2009, the United States

joined 133 other members in supporting the Amendment. The special allocation was

implemented on September 9, 2009. It increased members' cumulative SDR allocationsby SDR 21.5 billion using a common benchmark ratio as described in the amendment.

Buying and selling SDRs

IMF members often need to buy SDRs to discharge obligations to the IMF, or they may

wish to sell SDRs in order to adjust the composition of their reserves. The IMF acts as

an intermediary between members and prescribed holders to ensure that SDRs can be

exchanged for freely usable currencies. For more than two decades, the SDR market

has functioned through voluntary trading arrangements. Under these arrangements a

number of members and one prescribed holder have volunteered to buy or sell SDRs

within limits defined by their respective arrangements. Following the 2009 SDR

allocations, the number and size of the voluntary arrangements has been expanded to

ensure continued liquidity of the voluntary SDR market.

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In the event that there is insufficient capacity under the voluntary trading arrangements,

the Fund can activate the designation mechanism. Under this mechanism, members

with sufficiently strong external positions are designated by the Fund to buy SDRs with

freely usable currencies up to certain amounts from members with weak external

positions. This arrangement serves as a backstop to guarantee the liquidity and the

reserve asset character of the SDR.

FINANCIAL OPERATIONS:FINANCIAL OPERATIONS:

Financial Structure

The financial transactions and operations of the IMF are conducted through the General

Department, the SDR Department, and the Administered Accounts (Figure 1). The

transactions of the IMF in the General Resources Account are exchanges of monetary

assets by the IMF for other monetary assets. The operations of the IMF are other usesor receipts of monetary assets by the IMF.

The IMF is a quota-based institution. When a country becomes a member of the IMF,

an amount not exceeding 25 percent of its quota has to be paid in SDRs or usable

currencies (reserve assets) specified by the IMF and the balance in the members own

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currency, normally in the form of nonnegotiable, non-interest-bearing notes (essentially

promissory notes).

The portion of a members quota paid in reserve assets becomes its initial reserve

tranche in the IMF (known as the gold tranche before the Second Amendment of the

Articles, when this reserve asset was paid in gold. The reserve tranche position can be

defined as the amount by which a members quota exceeds the IMFs holdings of its

own currency. A member may draw up to the full amount of its reserve tranche position

at any time (subject only to its representation to the IMF that it has a balance of

payments need) by transferring to the IMF an equivalent amount of its own currency.

The IMFs unit of account is the special drawing right (SDR), whose value is calculated

daily on the basis of a valuation basket comprising five major currencies. The IMFs

financial year runs from May 1 to April 30, with financial quarters starting in May,

August, November, and February.

Accounts in Member Countries

Each member is required to designate a fiscal agencyand a depositoryto conduct its

financial dealings with the IMF. The fiscal agency may be the members treasury

(ministry of finance), central bank, official monetary agency, stabilization fund, or other

similar entity. The IMF can deal only with, or through, the designated fiscal agency,

which is accordingly authorized to carry out on behalf of

the member country all operations and transactions authorized under the Articles. In

addition, each member is required to designate its central bank as a depository for all

IMF holdings of its currency.

If it has no central bank, the member can designate another institution such as a

monetary agency or even a commercial bank, that is acceptable to the IMF.

A depository is required to pay out of the IMFs holdings of the members currency, on

demand and without delay, sums to any payee named by the IMF in the members own

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territory, and hold securities for safe custody on behalf of the IMF if the member issues

nonnegotiable, non-interest-bearing notes, or similar instruments, in substitution for part

of its currency holdings. In addition, each member guarantees all assets of the IMF

against loss resulting from failure or default on the part of the designated depository.

Each depository maintains (without any service charge or commission) two accounts,

the IMF No. 1 Account and the IMF No. 2 Account, and some depositories also maintain

a Securities Account at the option of the member. The balances in these accounts,

which originate, in the first instance,

from the payment to the IMF of the members quota subscription, do not yield any

interest for the IMF.

The No. 1 Account is used for IMF transactions and operations, including subscription

payments, purchases, repurchases, repayment of borrowing, and sales of the members

currency. Provided that a minimum is maintained in the No. 1 Account, as explained

below, all these transactions can also be carried out through the IMF Securities

Account.

A member may establish an IMF Securities Account to hold nonnegotiable non-interest-

bearing notes, or similar obligations, payable to the IMF on demand if the currency is

needed for the IMFs operations and transactions. The depository holds these notes for

safekeeping and acts as the agent of the IMF to obtain encashment of the notes in

order to maintain at all times the minimum balance in the No. 1 Account. If any payment

by the IMF reduces the balance in the No. 1 Account below a minimum of 1/4 of 1

percent of the members quota, the balance is to be restored to that level by the next

business day through the encashment of sufficient notes.

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The No. 2 Account is used for the IMFs administrative expenditures and receipts (for

example, receipts from sales of IMF publications) in the members currency and within

its territory. Small, out-of-pocket expenses, such as telecommunications charges, may

be debited to this account on a quarterly basis.

General Department

Under the Articles, the IMFs General Department consists of the General Resources

Account (GRA), the Special Disbursement Account (SDA), and the Investment Account

(not activated as of June 30, 1998). The General Department also includes the

Borrowed Resources Suspense Accounts, which were established by a decision of the

Executive Board in May 1981 but which have been inactive since 1991 when remaining

borrowed resources under the Enlarged Access Policy were disbursed to members.

Most transactions between member countries and the IMF take place through the GRA.

This account handles, among other transactions and operations, the receipt of quota

subscriptions, purchases and repurchases, receipt and refund of charges, payment of

remuneration on members creditor positions in the IMF, and repayment of principal to

the IMFs lenders. The assets held in the GRA include currencies of member countries

(held in the No. 1 Account, the No. 2 Account, and the Securities Account with eachmember; see above), the IMFs own holdings of SDRs, and gold.

The Special Disbursement Account is the vehicle for (1) receiving and investing profits

from the sale of the IMFs gold (that is, the net proceeds in excess of the book value of

SDR 35 per fine ounce); and (2) making transfers for special purposes authorized in the

Articles. The SDA was activated in 1981 initially to receive transfers from the Trust

Fund, which had been funded from gold sales, upon its termination.

The IMF is authorized to establish an Investment Account in the General Department; to

date, however, no decision has been taken to this effect.4 The assets in the Investment

Account would be held separately from the General Resources Account and would not

be subject to maintenance-of-value requirements. The Articles envisage that assets in

the Investment Account could derive--if authorized by the requisite majority vote--from

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profits from the sale of the IMFs gold, from a transfer of currencies held in the GRA, or

from the income or proceeds of investments in the account. With the exception of

income from the accounts investments, the total amount transferred to the Investment

Account may not exceed the resources held in the IMFs General and Special

Reserves.

Investments may be made only in income-generating marketable obligations of

international financial organizations or of the member whose currency is used for the

investment. The income may be reinvested or used to meet the expenses of conducting

the business of the IMF, including both operational and administrative expenses.

The Borrowed Resources Suspense Accounts were established to hold, transfer,

convert, and invest (1) currencies borrowed by the IMF before they were transferred to

the GRA for use in transactions or operations, and (2) currencies received by the IMF in

repurchases financed with borrowed resources before repayments to lenders could be

made. Members were not obligated to maintain the SDR value of their currencies held

by the IMF in the Borrowed Resources Suspense Accounts, and as far as practicable

the currencies were invested in SDR-denominated obligations. As mentioned above,

since December 1991 no amount has been held in suspense in these accounts.

SDR Department

The IMFs SDR Department records all transactions and operations involving SDRs.

The SDR is an interest-bearing asset allocated by the IMF to each member that is a

participant in the SDR Department. As already noted, the IMF uses the SDR as its unit

of account. The IMF can hold SDRs in the GRA and can use them in transactions and

operations. The GRA receives SDRs in partial payment of quota increases and in the

settlement of charges and repurchases; it uses SDRs to finance purchases by members

and to pay remuneration to members .

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Administered Accounts

The IMF may establish administered accounts for purposes, such as financial and

technical assistance, that are consistent with the Articles. Accounts have been

established to administer resources for support for the low-income and heavily indebted

members (the Enhanced Structural Adjustment Facility and the Heavily Indebted Poor

Countries Initiative). There are several other Administered Accounts established for

different purposes, including a Framework Administered Account to administer

resources to finance technical assistance activities.

Operating Costs

The expenses of conducting the business of the IMFs General Department along with

the IMFs general overhead are paid from the net operational income of the General

Resources Account. The expenses of conducting the business of the SDR Department

are also paid from the GRA, which is reimbursed by the participants in the SDR

Department at the end of each financial year. For this purpose, the IMF levies an

assessment on the participants, at the same rate for all participants, in relation to their

net cumulative allocations. Also at the end of each financial year, the ESAF Trust

reimburses the GRA for the cost of administering the trust during the year.5 TheGeneral and SDR

Departments and the Administered Accounts are operated, recorded, and accounted for

separately, and no assets in one department or administered account may be used to

discharge liabilities or to meet losses incurred in the administration of other accounts or

departments.

SUPPLEMENTARY FINANCING FACILITY (SFF)SUPPLEMENTARY FINANCING FACILITY (SFF)

SUPPLEMENTARY FINANCING FACILITY: SUBSIDY ACCOUNTINSTRUMENT

To help fulfill its purposes, the International Monetary Fund (hereinafter called the

Fund) has adopted this Instrument establishing the Supplementary Financing Facility

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Subsidy Account (hereinafter called the Account), which shall be governed by and

administered in accordance with the terms of this Instrument.

Section 1. Purpose

The purpose of the Account shall be to reduce the cost to eligible developing members,in accordance with Section 8, of using the Funds resources under the policies of the

Fund referred to in Section 7 of this Instrument.

Section 2. Resources

The resources of the Account shall consist of:

(a) amounts donated to the Account;

(b) amounts transferred to the Account from the Special Disbursement

Account of the Fund;

(c) the proceeds of borrowing by the Fund for the Account; and

(d) the income or net gains from investment of resources of the Account.

Section 3. Donations

The Fund may accept donations of resources for the Account in such amounts and

under such arrangements as may be agreed between the Fund and the respective

donors, consistent with the provisions of this Instrument.

Section 4.Amounts Transferred from Special Disbursement Account

(a) Subject to (b) below, a total equivalent to SDR 750 million shall be transferred to the

Account from the assets received by the Special Disbursement Account of the Fund on

termination of the operation, in its present form, of the Trust Fund established by

Executive Board Decision No. 5069-(76/72). These transfers to the Account shall be

made as the amounts are received in the Special Disbursement Account.

(b) If, on the basis of reasonable estimates, the Executive Board determines at any

time that amounts already transferred to the Account, together with the other assets

available to the Account, are sufficient to carry out the operations and to meet the

liabilities of the Account in full, it may authorize the suspension of further transfers from,

and the re-transfer of any surplus back, to the Special Disbursement Account, provided

that transfers shall be resumed, up to the total amount specified in (a), if this proves

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necessary to complete the operations of the Account and to discharge its liabilities in

full.

Section 5. Borrowing

(a) The Fund may borrow resources for the Account on such terms and conditions asmay be agreed between the Fund and the respective lenders, consistent with the

provisions of this Instrument. In undertaking such borrowing, the Fund shall make every

effort to obtain loans on concessionary terms. The aggregate amount of such

borrowing, including the interest payable on the borrowing, shall not exceed the SDR

750 million that could be transferred to the Account from the Special Disbursement

Account under Section 4.

(b) Payments of interest and repayments of the principal amount under each such loan

shall be made exclusively from the resources of the Account. All resources of the

Account shall be available for such payments, except that donations shall not be used

for this purpose without the consent of the donor. Resources transferred to the Account

from the Special Disbursement Account pursuant to Section 4 shall be applied, as

necessary, to make payments due under such loans, including the interest payable

thereon, in priority to other uses of such resources.

Compensatory Financing Facility

The Compensatory Financing Facility was established in 1963 to help member

countries cope with temporary export shortfalls caused by exogenous shocks. The

facility has been modified several times, including by broadening its coverage to include

shocks affecting cereal imports. At the time of the most recent review in 2000, the

Executive Board decided to simplify the structure of the CFF, and that that CFF

financing would need to made in parallel with a Fund-supported adjustment program

when preexisting balance of payments weaknesses needed to be addressed. The CFF

has not been used since the modifications introduced in 2000. The staff paper suggests

some reasons for this, and considers the role of the CFF in the Fund's array of lending

facilities. A further consideration of mechanisms to deal with shocks affecting low

income countries is contained in the ongoing review of the role of the Fund in low-

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income countries [reference] that was undertaken in parallel with the present review of

the CFF.

BUFFER STOCK FINANCING FACILITY:

This is a recent facility provided to the members in order to help them overcome serious

balance of payments difficulties. Financial aid is given for creating and maintaining

buffer stocks of essential commodities in danger of falling short

SUBSIDY ACCOUNT:

Subsidy payments made after the effective date of this Decision with respect to charges

paid on holdings of currency referred to in Section 7 of the Instrument establishing the

SFF Subsidy Account may be made, at the discretion of the Fund, in SDRs tobeneficiaries agreeing to receive them, or in U.S. dollars, or in a combination of these

two assets. Subsidy payments in U.S. dollars shall be made on the basis of the

SDR/U.S. dollar exchange rate in effect three business days before the payment date.

Decision No. 8185-(86/9) SBS/S,

January 15, 1986

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RESEARCH METHODOLOGY FOR DATARESEARCH METHODOLOGY FOR DATA..

PAKISTAN AND IMFPAKISTAN AND IMF

After a four-year gap Pakistan has once again come under the IMF support

arrangement by concluding a twenty-three month Stand-By Arrangement (SBA) of SDR

5.17 billion ($ 7.6 billion) on 24 November, 2008. The earlier Poverty Reduction and

Growth Facility (PRGF) Arrangement had ended in December 2004 with proclamation

by the authorities that they had broken the beggar's-bowl' and that their policies hadbrought the economy to a position where IMF support would no more be required. What

happened that led the country to knock at the door of the IMF once again, at what cost

the support has been obtained, and is this support a one-time-shot-in-the-arm' or a-

long-term drip-in-the vein' are some of the questions that this paper is intended to

address

Background

Established in 1944, the International Monetary Fund (IMF) was responsible for

promoting exchange rate stability and providing temporary assistance (under Stand-By

Arrangement) to a member state facing short-term balance of payments difficulty.

Realising that short-term assistance is not sufficient to address the specific difficulties,

such as emergent situations and structural weaknesses; the Fund introduced new

support facilities (i.e. SAF, ESAF, EFF and PRGF) of medium-term nature. A member

using IMF resources under these arrangements is required to agree on a reforms and

stabilisation program with the Fund. Disbursement of resources is linked with the

conditionality laid down by the IMF.

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Overview of Earlier Arrangements

Pakistan is one of the prolonged users' of the IMF resources; it remained under the IMFsupport program for over twenty-five years - almost continuously during 1988 and 2004

(the new Arrangement adds two more years). The eight medium-term arrangements

concluded during 1980 and 2004 are listed in table 1.

Stand-By Arrangement (SBA) 2008-10

Main Features

Pakistan submitted to the IMF a Request for Stand-By Arrangement on 20 November,

2008 amounting SDR 5.17 billion ($ 7.6 billion) equal to 500% of Pakistan's quota in the

Fund. The Request was prepared jointly by Pakistani authorities and IMF Staff and

approved by the Cabinet. The IMF Executive Board approved the Request on 24

November, 2008. The Arrangement is for a period of 23 months. It is on interest rate of

3.51-4.51%. The amount will be disbursed in seven tranches - the first tranche of SDR2.067 billion has been received on 29 November, 2008 and the balance amount will be

disbursed in six quarterly instalments during 2009-10. The amount and interest will be

repaid in five years from 2011.

Objective and Economic Program (2009-2010)

The main objectives of the Arrangement are to (i) restore confidence of domestic and

external investors by addressing macroeconomic imbalances through a tightening offiscal and monetary policies; and (ii) protect the poor and preserve social stability

through a well-targeted and adequately funded social safety net. For this purpose the

government of Pakistan has initiated an Economic Program covering 24 months. The

main elements of the Program are:

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Reduce fiscal deficit: 7.4% of GDP in 2008 to 4.2% in 2009 and 3.3% in 2010

Tighten monetary policy (increase interest rate, eliminate government

borrowing) to reduce inflation to 6% in 2010

Increase expenditure on social safety net (0.6% of GDP to 0.9% in 2009)

-work with World Bank to prepare a comprehensive program of safety net

Conditionality of SBA

The program is subject to quarterly review and performance criteria. The conditionality

covers actions prior to the approval of arrangement by the IMF Board, performance

criteria, benchmarks and quantitative targets. The prior actions included increasing theState Bank's discount rate from 13% to15% as a measure to control inflation, raise in

electricity tariff by an average of 18% effective from 5 September, 2008, and agreement

on volume of quarterly issue of treasury bills for the remainder of second quarter of

2008/09. The performance criteria includes submission of amendments in two

legislations (relating to enhancement of effectiveness of the State Bank and

harmonisation of income and GST laws) in the Parliament by June 2009. The

conditionality cover over half a dozen benchmarks - contingency plan for handling

problems of private banks, reforms in tax administration, further adjustments in

electricity tariffs, eliminating of foreign exchange provision by State Bank for import of

furnace oil, measures for ensuring safety nets for poor, plan for elimination of inter-

corporate circular debt, and transition to a single treasury account. Quarterly

quantitative targets have been set which also include ceilings on overall budget deficit

and borrowing of government from State Bank.

Evaluation of SBA 2008-10

The IMF arrangements can be seen from different perspectives - bail-out package,

lubricant for larger resource inflows, investors' confidence builder, economic stabiliser

and revival of growth, step towards greater external dependence, and source of

hardship to the people, and so on. This section is intended to focus on evaluating it in

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the context of the objectives of the Arrangement and as an instrument of long term

economic and social development.

The Economic Program under SBA is restricted in scope as it only seeks to restore the

confidence of international and domestic investors while preserving social stability by

protecting the poor' (ref. Pakistan: Request for SBA). It is a financial stabilisation plan

heavily dependent on tight monetary and fiscal policies. It ignores the key issues of

revival of economic growth, social development and removal of structural weaknesses.

It presumes that tight monetary and fiscal policies will ensure economic revival in later

years.

Conditionality

The conditionality of SBA has both positive and negative implications. The elements

relating to legislative amendments, tax reforms, safety nets, inter-corporate circular

debt, ceilings on government borrowing are desirable. Legislative amendments may

make the State Bank more effective and improve tax system. Inter-corporate circular

debt in energy sector (i.e. oil/gas companies, WAPDA, KESC, Water Boards,

government agencies, etc. are indebted to each other in millions of rupees) is serious

issue lingering for years and needs to be resolved urgently Despite legislativeprovisions the government has been borrowing heavily from the State Bank and putting

ceilings on such borrowings would help in ensuring financial discipline. The provisions

of SBA on social safety net are, however, weak and too general.

As a bail-out package the Arrangement has served its purpose. The likely default

situation has been averted; foreign exchange reserves have risen over $ 9 billion (equal

to over two months of imports) on 29 November 2008 from less than $ 7 billion a week

ago; and donor assistance is reportedly lined-up to meet the estimated gross external

need of over $13 billion in 2009 and $12.5 billion in 2010[1]. The confidence of investor

is yet to be restored. Raising the interest rate and reducing public sector development

program envisaged in the Arrangement will depress investment. Investment prospects

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are also hampered by structural weaknesses, global recession, and internal law and

security situation.

Fiscal Policy

The program envisages a challenging task of reducing the fiscal deficit from 7.4 percent

of GDP in 2008 to 4.2 percent in 2009 and further to 3.3 percent in 2010. This is

proposed to be realised by increasing revenues from 14.3 to 14.9 percent of GDP

(mainly through improved tax administration, and increase in GST) and reducing

expenditure from 21.8 to 19.0 percent of GDP (mainly by eliminating fuel and other

subsidies and adjustment in electricity tariff) in the first year. Given the current

economic, political and security situation this seems to be a difficult task warranting

strong steps both for enhancing revenue collection and controlling expenditure. Such an

approach is not evident so far. The need of the hour is to adopt austerity, avoid wasteful

expenditure, and augment tax revenues. Control and greater discipline in current

expenditure and civil administration, in particular, is essential where extravagance and

waste at Federal and provincial levels is common. If financial discipline is not ensured it

might not be possible to meet the quarterly ceilings on fiscal deficit and borrowing from

the State Bank. This could jeopardize even the release of second tranche due after the

mid-March 2009 review of SBA.

Monetary Policy

The tight monetary policy has two main elements, namely, increasing discount rate from

13 to 15 percent as a prior action with provision to increase it further in the future, and

zero financing of budget by State Bank after October 2008.

In theory increasing discount rate helps reduce inflation by mopping up access

aggregate demand. As noted in the Pakistan's Request for Stand-By Arrangement

(paragraph 13 of Executive Summary) Pakistan is suffering from weaker aggregate

demand and depressed economic activity' and not with upsurge in aggregate demand.

The current inflation is cost-push and supply- constrained rather than demand-surged.

In such a situation raising discount rate to control inflation will do more harm than good.

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The main economic indicators under SBA for 2008-10 are given in table 2. The

projections indicate some improvement in economic growth in 2010 (i.e. 5%) from a low

level of 3.4 percent in the earlier year, greater dependence on external resources and

rise in external debt. A sharp fall in inflation is projected from 2010 along with

improvement in fiscal and reserves positions. This scenario is based on the premise

that the government will be able to take fiscal and monetary measures as stipulated in

the Arrangement.

Table 2

Economic Indicators

2008 2009 2010

GDP growth rate % 5.8 3.4 5.0

CPI (end year) % 21.5 20.0 6.0

Gross national

savings (% GDP)12.9 13.5 15.7

Gross capital

formation (% GDP)

21.3 20.0 21.3

External resources(%

GDP)8.4 6.5 5.6

Fiscal deficit (% GDP) 7.4 4.2 3.3

Debt (% GDP) 57.9 54.6 52.4

Current Account

deficit (% GDP)8.4 6.5 5.7

External debt (%GDP)

26.5 31.4 33.2

Reserves ($ million) 8.591 8.591 11,291

Source: Pakistani authorities and IMF Staff

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The IMF Staff has also estimated a medium-term macroeconomic framework ending

2013, depicting steady improvement in all major indicators. The economic growth rate is

projected to climb to 7.0 percent in 2013 supported by rise in national savings, capital

formation and foreign exchange reserves, and decline in inflation, fiscal deficit, public

debt and current account deficit. The realisation of this scenario is dependent not only

on persistently following the policy of resource mobilisation and disciplined expenditure

but also on favourable external factors and improved political and security situation in

the country. In addition, there has to be a long term plan in operation for removal of

some critical elements hindering sustained growth, such as energy and water shortage,

inadequate infrastructure, low quality of human resource, rising unemployment and

income generation, reduction in poverty and socio-economic inequality, low productivity,

poor governance, increasing external dependence and serious national security

situation.

The main elements of the projected medium-term framework are given in table 3.

Table 3

Selected Indicators of Macroeconomic Framework 2009-2013

2009 2013

GDP (% growth) 3.4 7.0

Consumer price (annual

average)23.0 5.0

Gross national savings (%

GDP) 13.5 21.1

Gross capital formation (%

GDP)20.0 24.8

Current account deficit (%

GDP)6.5 3.6

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Gross official reserves (in

months of imports)2.1 2,6

External debt (% GDP) 31.4 28.7

Revenues and grants (%

GDP)15.1 18.3

Tax revenues (% GDP) 11.0 14.4

Expenditure (% GDP) 19.1 20.3

Current expenditure (%

GDP) 16.0 14.0

Development Expenditure

(% GDP)3.0 6.2

Fiscal deficit (% GDP) 4.2 2.2

Total govt. debt (% GDP) 54.6 46.2

Source: IMF: Pakistan Request for Stand-By Arrangement,

20 November, 2008

Conclusion

The deteriorating domestic and external situation coupled with failure of successive

governments to take appropriate and timely action in the past years had led to a

situation when Pakistan was left with no option but to seek IMF support. The quick

disbursement of the SBA first tranche, which is equal to forty percent of the total

assistance, has helped in averting the default situation and paving the way for other

external inflows. The fulfilment of various elements of the conditionality will, however, be

the real test of government's commitment and implementation capacity. The credibility

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11TH NOVEMBER 2010

of government hinges on it, as the performance of the elected governments in the past

had not been satisfactory. Three IMF arrangements under government of Nawaz Sharif

and two under Benazir Bhutto were terminated prematurely mainly on account of non-

performance. As mentioned in the earlier section the implementation of conditionality

warrants austerity, financial discipline, and bold and timely actions by government. This

approach is not in sight so far.

The consequences of premature termination of the Arrangement due to non-compliance

on Pakistan's part could be serious - economic instability, loss of credibility, flight of

capital, reverse flow of resources (even deferment of in-pipeline assistance). Now that

commitments have been made, these should be met with dignity. The government

should also make determined efforts to bring the economy back to a stage where IMFassistance would not be necessary after 2010. This may entail sacrifices for which the

government and people should be prepared.

The SBA is a financial package aimed at short-term stabilisation rather than a plan for

economic and social development. It is focused on averting current financial crisis. It

may help in developing favourable conditions for revival of growth but should not be

seen as a development plan. For ensuring sustained growth a long-term plan should be

formulated and put in operation using a road-map' and benchmarks'. The plan should

give priority to removing critical weaknesses hindering sustained and self-reliant growth.

The IMF agenda has never been painless; as it is financial/commercial than human'.

This inadequacy is generally recognised but there is no serious attempt to remove it.

Debate on reforming the IMF is on for some time but it is focused on power-sharing in

decision making. A prudent approach for Pakistan, therefore, is to ensure stability and

growth, taking bold and futuristic steps to avert financial slide (particularly in respect of

foreign exchange reserves and fiscal and external deficits) that forces the country to

seek the IMF support. For this purpose, following indicative benchmarks can be set for

critical areas of current account balance, foreign exchange reserves, fiscal deficit, and

external debt.[2]

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Recovery in Sight for Iceland

October 05, 2010

Iceland has made impressive progress under the IMF-supported program, reflecting

strong policies that have stabilized the economy and improved debt dynamics following

the crash in October 2008.

Foreign Aid: Good or Bad?

September 09, 2010

Its one of the thorniest issues in developmental economics: what, if any, are the

benefits of foreign aid. Two economists pit their radically different views against

eachother.

Review Hails Successes of IMF's Safeguards Assessments

August 16, 2010

The Safeguards Assessment Program is seen as an important element of the due

diligence process in the IMFs lending, mitigating the risks of misreporting and misuse of

the IMFs resources. Two senior IMF officials discuss the outcome of a recent review of

the program.

Fragile Recovery In The Cards For Spain

July 30, 2010

Spain is undergoing a painful recession. Unemployment now stands at 20 percent, the

fiscal deficit ended the year at more than 11 percent of GDP, and the recovery has so

far been among the weakest in the European Union.

After Deep Slump, Nascent Recovery for Ireland

July 14, 2010

After a severe decline in late 2008 and 2009, the Irish economy has stabilized, and

growth resumed in the first quarter of 2010. In an interview, Ashoka Mody, IMF mission

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chief for Ireland, speaks about the nascent recovery and the many challenges that still

lie ahead.

IMF Pushes Reforms to Its Governance and Mandate

June 08, 2010

As the world economy faces public debt concerns in many advanced economies and

the lingering effects of the crisis, the IMF is pressing ahead with further reforms to make

sure it continues to respond effectively to the needs of its 186 member countries. The

IMFs Reza Moghadam discusses strategic shifts in how the IMF works and engages

with its member countries.

Modest Recovery in Store for Germany

March 30, 2010

The IMF is forecasting growth of 1.2 percent of GDP this year, followed by 1.7 percent

in 2011. Reflecting Germany's role as the world's second largest exporter, the pickup in

global trade is the main factor behind the recovery, although fiscal stimulus continues to

provide support to the economy.

Gulf Countries Limit Fallout from Crisis

March 12, 2010

Gulf Cooperation Council (GCC) countries have managed to contain the fallout from the

global financial crisis, but the crisis has revealed financial sector vulnerabilities that

need to be addressed, the IMF says.

Oil Offers Hope of Middle-Income Status for Ghana

February 17, 2010

In the next few years Ghana will become an oil producer. If the country uses its new-

found oil wealth wisely, it could achieve middle-income status within 10 years, IMF

projections show. IMF mission chief for Ghana Peter Allum talks in an interview about

Ghana's prospects.

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IMF Explores Contours of Future Macroeconomic Policy

February 12, 2010

The IMF, at the forefront in recommending the policy response to the global economic

crisis, has entered the debate about how macroeconomic policy should be adjusted in

the future, drawing lessons from the worst global recession in 60 years.

Iran to Cut Oil Subsidies in Energy Reform

September 28, 2010

The Islamic Republic of Iran has begun eliminating energy subsidies, a move that could

transform the way the country's economy works and influence reform in other energy-

producing countries, IMF economists say.

IMF Urges Action to Tackle Unemployment, Create Jobs

September 09, 2010

The International Labour Organization and the IMF are hosting a joint conference on

ways of generating jobs as part of a sustainable recovery from the global economic

crisis. Ahead of the conference, IMF Chief Economist Olivier Blanchard speaks about

the objectives of the event.

Members' quotas and voting power, and board of governors

IMF membercountry

Quota:millions of

SDRs

Quota:percentage

of totalGovernor

AlternateGovernor

Votes:number

Votes:percentage

of total

United States 37,149.3 17.09Timothy F.Geithner

BenBernanke

371,743 16.74

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Japan 13,312.8 6.12Yoshihiko

NodaMasaaki

Shirakawa133,378 6.01

Germany 13,008.2 5.98Axel A.Weber

WolfgangSchuble

130,332 5.87

UnitedKingdom 10,738.5 4.94 GeorgeOsborne Mervyn King 107,635 4.85

France 10,738.5 4.94ChristineLagarde

ChristianNoyer

107,635 4.85

China 8,090.1 3.72Zhou

XiaochuanYi Gang 81,151 3.65

Italy 7,055.5 3.24Giulio

TremontiMario Draghi 70,805 3.19

Saudi Arabia 6,985.5 3.21Ibrahim A. Al-

AssafHamad Al-

Sayari70,105 3.16

Canada 6,369.2 2.93 Jim Flaherty Mark Carney 63,942 2.88

Russia 5,945.4 2.73AlekseiKudrin

SergeyIgnatyev

59,704 2.69

Netherlands 5,162.4 2.37 Nout WellinkL.B.J. van

Geest51,874 2.34

Belgium 4,605.2 2.12 Guy QuadenJean-Pierre

Arnoldi46,302 2.08

India 4,158.2 1.91Pranab

Mukherjee

Duvvuri

Subbarao

41,832 1.88

SUGGESTIONS:SUGGESTIONS:

ADVANTAGES AND DISADVANTAGES OF IMF:

Advantages the main advantages of the IMF are seen as...

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