The IMF Stabilization Package and Pakistan’s Stabilization Experience

The application of IMF stabilization packages in the less developed countries (LDCs) has always been a controversial issue. The debate on IMF stabilization packages with their strong elements of conditionality and impact on the LDCs has intensified with the re-emergence of the payments imbalances in the Seventies and early Eighties. The objective of this paper is to evaluate, very briefly, Pakistan’s three-year stabilization programme under the Extended Fund Facility (EFF) arrangement for the period 1980-83. The plan of the paper is as follows. Section II describes the IMF stabilization package under the standby arrangements and developments leading to the EFF arrangements. Section III provides a brief evaluation of the stabilization programmes. In Section N we attempt to evaluate Pakistan’s programme in terms of quantifiable macro indicators as well as supply-side variables.