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Structural Adjustment Program

Pakistan has adhered to structural adjustment programs from the IMF and World Bank since 1981, which require economic reforms such as reducing government spending and opening to free trade in order to receive loans. Structural adjustment programs consist of loans provided to countries experiencing economic crises to adjust their economic structures and improve competitiveness. Pakistan's structural adjustment programs since 1981 have called for reducing the fiscal deficit, limiting the government's role in the economy, rationalizing taxes, and removing subsidies. Pakistan has received IMF loans on twenty-two occasions since 1950 to address its unpredictable economy and import dependence.

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44 views

Structural Adjustment Program

Pakistan has adhered to structural adjustment programs from the IMF and World Bank since 1981, which require economic reforms such as reducing government spending and opening to free trade in order to receive loans. Structural adjustment programs consist of loans provided to countries experiencing economic crises to adjust their economic structures and improve competitiveness. Pakistan's structural adjustment programs since 1981 have called for reducing the fiscal deficit, limiting the government's role in the economy, rationalizing taxes, and removing subsidies. Pakistan has received IMF loans on twenty-two occasions since 1950 to address its unpredictable economy and import dependence.

Uploaded by

Hadia Azhar2558
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© © All Rights Reserved
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Download as PDF, TXT or read online on Scribd
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Structural adjustment program (SAP) and Pakistan

What Is a Structural Adjustment?


A structural adjustment is a set of economic reforms that a country must adhere to in order to
secure a loan from the International Monetary Fund and/or the World Bank. Structural
adjustments are often a set of economic policies, including reducing government spending,
opening to free trade, and so on.
Structural adjustment programs (SAPs) consist of loans (structural adjustment loans; SALs)
provided by the International Monetary Fund (IMF) and the World Bank (WB) to countries that
experience economic crises. Their purpose is to adjust the country's economic structure, improve
international competitiveness, and restore its balance of payments.
Globalization and Development
Globalization is a combination of gross domestic product (GDP), industrialization, and the
Human Development Index (HDI). Developed nations benefit under globalization as businesses
compete worldwide, and from the ensuing reorganization in production, international trade, and
the integration of financial markets.
SAP and Pakistan
Pakistan has adhered to a structural adjustment programmed since 1981. The Structural
Adjustment and Stabilization Program of the IMF2 for Pakistan have called for a reduction of the
fiscal deficit, a restricted role of the government in the economy, rationalization of the tax
structure, removal of subsidies on consumption and production, etc.
Background
Pakistan has been a member of the International Monetary Fund (IMF) since 1950. Due to
unpredictable nature of the economy and heavily dependent on imports, IMF has given loan to
Pakistan on twenty-two occasions since its membership, recent in 2019.

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