Topic: - THE ECONOMIC CRISIS OF PAKISTAN

MADE BY: - Yash Saravgi

CLASS: - 12th B

1.What is the meaning of Economic Crisis?

An economic crisis refers to a severe downturn in the economic activity of a

country or region, characterized by a significant decline in economic output,
widespread unemployment, financial instability, and often accompanied by
other adverse effects such as currency devaluation, inflation, and social unrest.
Economic crises can be triggered by various factors, including financial market
disruptions, unsustainable levels of debt, external shocks such as natural
disasters or geopolitical conflicts, or structural imbalances within the economy.
These crises typically result in a contraction of consumer spending, investment,
and international trade, leading to a negative feedback loop that further
exacerbates the economic downturn.

One notable example of an economic crisis is the Great Recession of 2007-2009,

which was triggered by the collapse of the housing bubble in the United States
and the subsequent global financial crisis. The bursting of the housing bubble
led to widespread defaults on mortgage loans, causing a domino effect that
spread throughout the financial system. Banks faced liquidity problems, credit
markets froze, and stock markets plummeted, leading to a severe contraction in
economic activity worldwide. The Great Recession resulted in millions of job
losses, widespread home foreclosures, and a prolonged period of economic
stagnation in many countries, demonstrating the devastating impact that
economic crises can have on individuals, businesses, and societies as a whole.

2. What is the history of Pakistan ?

the history of Pakistan is rich, comPlex, and sPans several millennia.
hoWever, i'll Provide a condensed overvieW focusing on key Periods and
events:
1. Indus Valley Civilization (3300–1300 BCE): The earliest known
civilization in the region that encompasses present-day Pakistan,
characterized by advanced urban planning, trade, and agriculture. Major
archaeological sites such as Mohenjo-Daro and Harappa are located in
this region.
2. Islamic Rule and Mughal Empire (712–1857 CE): The region came under
Islamic rule in the 8th century when Arab conquerors invaded.
Subsequently, it became part of various Islamic empires, including the
Delhi Sultanate and the Mughal Empire. The Mughals ruled most of
 present-day Pakistan until the 18th century, leaving behind a legacy of
art, architecture, and culture.
3. British Colonial Period (1858–1947): Following the British East India
Company's rule, the British Crown took direct control of the Indian
subcontinent. Pakistan, at that time, was part of British India. The
struggle for independence against British rule, led by figures like
Muhammad Ali Jinnah, eventually resulted in the partition of British
India and the creation of Pakistan as a separate nation for Muslims on
August 14, 1947.
4. Partition and Independence (1947): The partition of British India led to
the creation of two independent nations: India and Pakistan. Pakistan
was divided into two wings, West Pakistan (present-day Pakistan) and
East Pakistan (present-day Bangladesh), separated by around 1,600
kilometres of Indian territory. The partition resulted in massive violence,
displacement, and loss of life.
5. Formation of Pakistan: Pakistan initially comprised two geographically
and culturally distinct regions, West Pakistan and East Pakistan.
However, tensions between the two wings, as well as economic and
political disparities, eventually led to the independence of Bangladesh in
1971, leaving West Pakistan as the sole entity known as Pakistan.
6. Military Rule and Democracy: Pakistan has experienced periods of
military rule interspersed with democratic civilian governments since its
independence. Military coups occurred in 1958, 1977, and 1999, with the
military ruling directly or indirectly during these periods. Despite this,
Pakistan has also seen periods of civilian rule and democratic elections.
7. Kashmir Conflict and Relations with India: One of the most enduring and
contentious issues in Pakistan's history is its conflict with India over the
region of Kashmir. The two countries have fought several wars and
skirmishes over Kashmir since independence, and the dispute remains
unresolved, contributing to ongoing tensions between the two nuclear-
armed neighbours.
8. Challenges and Progress: Pakistan faces various challenges, including
political instability, terrorism, economic inequality, and social issues.
However, it has also made significant progress in areas such as
education, technology, and infrastructure development. The country
continues to strive for stability, democracy, and economic growth
amidst its complex geopolitical environment.

3. economic condition of Pakistan ?

Providing a comprehensive list of Pakistan's GDP figures from 1947 to 2024
would require access to a detailed database or historical records. However,
 I can offer a general overview of Pakistan's economic performance over this
period.
1. 1947-1950s: Pakistan's economy faced numerous challenges in its early
years, including the partition from India, large-scale migration, and the
division of assets and resources. The economy heavily relied on
agriculture, with limited industrialization. GDP growth during this period
was relatively modest.
2. 1960s: Pakistan experienced a period of economic growth, particularly
during the Ayub Khan era (1958-1969). Economic reforms, including the
implementation of the "Basic Democracies" system and the "Decade of
Development" plan, aimed to modernize the economy and spur
industrialization. GDP growth rates were relatively high during this time.
3. 1970s: The nationalization policies of Prime Minister Zulfikar Ali Bhutto,
along with external shocks such as the oil crisis, led to economic
stagnation and rising inflation. Pakistan's economy faced significant
challenges during this decade.
4. 1980s: The military regime of General Zia-ul-Haq implemented market-
oriented economic policies, leading to a period of economic liberalization.
However, external debt soared, and the economy became heavily reliant on
aid and remittances. GDP growth fluctuated during this period.
5. 1990s: Pakistan faced economic instability, including fiscal deficits,
inflation, and political uncertainty. Economic reforms were introduced
under Prime Minister Nawaz Sharif, including privatization and
deregulation. However, the economy faced setbacks, including sanctions
following nuclear tests in 1998.
6. 2000s: Pakistan experienced periods of economic growth, particularly in
the mid-2000s under the leadership of President Pervez Musharraf.
However, challenges such as terrorism, political instability, and natural
disasters hampered economic progress.
7. 2010s: Pakistan's economy faced various challenges, including energy
shortages, high inflation, and a balance of payments crisis. Economic
growth remained sluggish, and the country relied on external assistance
from organizations such as the International Monetary Fund (IMF).
8. 2020s: Economic conditions in Pakistan during the early 2020s may vary
depending on various factors, including government policies, global
economic trends, and domestic challenges such as the COVID-19
 pandemic. Without access to specific GDP figures for each year, it's
challenging to provide precise details for this period.
For detailed GDP figures for each year, I would recommend consulting
official sources such as the Pakistan Bureau of Statistics or international
organizations like the World Bank or the International Monetary Fund (IMF).

4. table of taking loan from imf from Pakistan

Date of Expiration Amount Amount A
Facility
Arrangement Date 4/ Agreed Drawn O

Extended Fund Facility Jul 03, 2019 Oct 02, 2022 4,268,000 1,044,000

Extended Fund Facility Sep 04, 2013 Sep 30, 2016 4,393,000 4,393,000

Standby Arrangement Nov 24, 2008 Sep 30, 2011 7,235,900 4,936,035

Extended Credit Facility Dec 06, 2001 Dec 05, 2004 1,033,700 861,420

Standby Arrangement Nov 29, 2000 Sep 30, 2001 465,000 465,000

Extended Credit Facility Oct 20, 1997 Oct 19, 2000 682,380 265,370

Extended Fund Facility Oct 20, 1997 Oct 19, 2000 454,920 113,740

Standby Arrangement Dec 13, 1995 Sep 30, 1997 562,590 294,690

Extended Credit Facility Feb 22, 1994 Dec 13, 1995 606,600 172,200

Extended Fund Facility Feb 22, 1994 Dec 04, 1995 379,100 123,200

Standby Arrangement Sep 16, 1993 Feb 22, 1994 265,400 88,000

Structural Adjustment Facility Commitment Dec 28, 1988 Dec 27, 1991 382,410 382,410

Standby Arrangement Dec 28, 1988 Nov 30, 1990 273,150 194,480

Extended Fund Facility Dec 02, 1981 Nov 23, 1983 919,000 730,000

Extended Fund Facility Nov 24, 1980 Dec 01, 1981 1,268,000 349,000

Standby Arrangement Mar 09, 1977 Mar 08, 1978 80,000 80,000

Standby Arrangement Nov 11, 1974 Nov 10, 1975 75,000 75,000

Standby Arrangement Aug 11, 1973 Aug 10, 1974 75,000 75,000
Standby Arrangement May 18, 1972 May 17, 1973 100,000 84,000

Standby Arrangement Oct 17, 1968 Oct 16, 1969 75,000 75,000

Standby Arrangement Mar 16, 1965 Mar 15, 1966 37,500 37,500

Standby Arrangement Dec 08, 1958 Sep 22, 1959 25,000 0

Total 23,656,650cr 14,839,045cr

5.the recent data of Pakistan financial fund

Pakistan: Financial Position in the Fund

as of January 31, 2024

Summary of IMF members' quota, reserve tranche

position, SDR holdings, outstanding credit, recent
lending arrangements, projected payments due to
the IMF, and historical transactions with the IMF.

I. Membership Status: Joined: July 11, 1950; Article VIII

II. General Resources Account: SDR Million %Quota

Quota 2,031.00 100.00

IMF's Holdings of Currency (Holdings Rate) 8,002.40 394.01

Reserve Tranche Position 0.12 0.01

III. SDR Department: SDR Million %Allocation

Net cumulative allocation 2,935.19 100.00

Holdings 399.37 13.61

IV. Outstanding Purchases and Loans: SDR Million %Quota

Stand-by Arrangements 1,422.00 70.01

Emergency Assistance 1/ 634.69 31.25

Extended Arrangements 3,914.83 192.75

 1/
Emergency Assistance may include ENDA, EPCA, and RFI.

V. Latest Financial Commitments:

Arrangements:

Date of Expiration Amount ApprovedAmount Drawn

Type Arrangement Date (SDR Million) (SDR Million)

Stand-By Jul 12, 2023 Apr 11, 2024 2,250.00 1,422.00

EFF Jul 03, 2019 Jun 30, 2023 4,988.00 3,038.00

EFF Sep 04, 2013 Sep 30, 2016 4,393.00 4,393.00

Outright Loans:

Amount
Date of Date Amount Approved
Drawn

Type Commitment Drawn/Expired (SDR Million) (SDR Million)

RFI Apr 16, 2020 Apr 20, 2020 1,015.50 1,015.50

1/
Undrawn outright disbursements (RFI and RCF) expire automatically 60 days
following the date of commitment, i.e. Board approval date.
2/
VI. Overdue Obligations and Projected Payments to Fund

(SDR Million; based on existing use of resources and present holdings of

SDRs):

Forthcoming

2024 2025 2026 2027 2028

Principal 1,047.31 769.21 478.75 1,151.33 1,105.58

Charges/Interest 447.88 360.77 313.51 265.96 205.30

Total 1,495.19 1,129.97 792.26 1,417.29 1,310.88

2/
When a member has overdue financial obligations outstanding for more than
three months, the amount of such arrears will be shown in this section.
VII. Implementation of HIPC Initiative: Not Applicable

VIII. Implementation of Multilateral Debt Relief Initiative (MDRI): Not

Applicable

IX. Implementation of Catastrophe Containment and Relief (CCR): Not

Applicable

As of February 4, 2015, the Post-Catastrophe Debt Relief Trust has been

transformed to the Catastrophe Containment and Relief (CCR) Trust.

Prepared by Finance Department

6. The Main Cause of Pakistan Economic Crisis?

The main causes of Pakistan's economic crises have been multifaceted, stemming
from both internal and external factors. Some of the primary causes include:
1. Political Instability: Pakistan has experienced periods of political instability,
including military coups, civilian unrest, and frequent changes in
government. Political instability often leads to inconsistent policies,
uncertainty for investors, and a lack of long-term economic planning.
2. Security Challenges: Persistent security challenges, including terrorism,
insurgency, and regional conflicts, have undermined investor confidence,
disrupted economic activities, and diverted government resources away from
development initiatives.
3. Weak Governance and Corruption: Pakistan has grappled with issues of
weak governance, corruption, and inefficiency within its institutions.
Corruption not only undermines public trust in government but also distorts
economic decision-making, impedes investment, and hampers economic
growth.
4. Fiscal Mismanagement: Chronic fiscal deficits, high levels of public debt, and
inadequate revenue collection have strained Pakistan's fiscal position. The
government's inability to effectively manage its finances has led to reliance
on external borrowing, crowding out private investment and exacerbating
debt servicing burdens.
5. Balance of Payments Crisis: Pakistan has faced recurring balance of
payments crises due to persistent trade deficits, low export competitiveness,
and volatility in remittances. The country's reliance on external financing,
 particularly short-term loans and borrowings, has left it vulnerable to
external shocks and fluctuations in global financial markets.
6. Energy Crisis: Chronic energy shortages, including electricity and gas, have
plagued Pakistan's economy, hindering industrial productivity, stifling
economic growth, and deterring investment. Inadequate investment in
energy infrastructure, coupled with mismanagement and circular debt in the
energy sector, has exacerbated the crisis.
7. Population Growth and Demographic Challenges: Pakistan's rapidly growing
population presents significant economic challenges, including high
unemployment rates, pressure on public services, and constraints on
resources. Addressing the needs of a large and youthful population requires
substantial investment in education, healthcare, and infrastructure.
8. External Factors: External factors such as geopolitical tensions, global
economic downturns, and fluctuations in commodity prices have also
impacted Pakistan's economy. Uncertainty in international markets, changes
in foreign aid and investment flows, and geopolitical conflicts in the region
have added to Pakistan's economic challenges.
Addressing these underlying causes requires comprehensive reforms across
multiple sectors, including governance, fiscal management, energy, education, and
security. Implementing effective policies to address these challenges and promote
sustainable economic development remains crucial for Pakistan's long-term
prosperity.