Situated in the sub-continent, Pakistan is a low-income country, with great promise for growth. Unfortunately, it is held back from reaching middle-income status by chronic problems like a rapidly growing population, sizable government deficits, a heavy dependence on foreign aid, recurrent governmental instability and large military expenditures. It is to address these fundamental faults in Pakistan's economy that the IMF has initiated the Structural Adjustment Programs (SAPs) in the country. This is discussed in further detail later in the paper.

Like all developing countries, Pakistan's population is largely employed in the agricultural sector, which accounts for about 48 percent of the labor force. In today's world the Industrial and Service sectors are the largest growing areas of a developed county's economy. Yet Pakistan only employs 39 percent of its populatio

9) The country's ability to export is also affected by sluggish world trade, which coupled with an over valued currency, is rendering Pakistan's exports uncompetitive. With the rise in the price of oil, the gap between import bills and export receipts is widening.

Pakistan is currently at the brink of complete collapse. It has got to the point where the army has stepped in and declared martial law and the people are happy about it! This shows how desperate the situation is. For many of the poor and starving, martial law represents their last hope as everyone including their government and international financial institutions has betrayed their trust.

Pakistan also has a very week industrial base. Being an ex British colony it suffers from a similar problem to the one ailing a number of the African and South American countries. This issue is that the colonists never bothered building up the necessary base for industrialization. While the rest of the world was busy building this base, greedy colonists who did not care about the country and thus paid no attention to its development were exploiting countries like Pakistan. Hence Pakistan is permanently playing catch up to the rest of the developed world leaving very little money for social services to help the situation of the poor.

Pakistan's growth and export potential depends importantly on the modernization of its outmoded transportation systems. To improve the transport system, the government will implement a reform program over the next three years to upgrade and expand the country's highways, railways, and ports. The highways are to be improved through the incorporation of tolls and through the encouragement of private sector investment while the railway is to be prepared for privatization by the end of 2000.

10) Until now this gap has been met with remittances and short-term borrowing. But due to a decline in remittances for a number of reasons and Pakistan's declining credit, this is no longer an option. It therefore seems that it is impossible to maintain the present levels of growth rates and imports as well as meet debt servicing.

Pakistan's Social Action Program (SAP) was launched in 1992 to expand and improve the country's very weak social services in elementary education, primary health, population welfare, and rural water supply and sanitation. The second part of the SAP (now underway) emphasizes improvements in the quality of services, particularly education, and the maximization of the impact of expenditures. The SAP program will continue to be agreed upon on an annual basis by the government, the World Bank, and other participating donors. In 1998/99, the government is to ensure that total rupee expenditure (not including foreign project assistance) for basic social services will be at least PRs 56.5 billion, including at least PRs 5.5 billion on critical quality-enhancing nonsalary expenditures in the provinces and federal areas.

On top of all of this, Pakistan is plagued by the curse of the IMF and World Bank. Constant defects in the current account of the balance of payments and depleting foreign exchange reserves is causing the extension of credit to become an exercise in haggling and bargaining. Each time there are negotiations along with a string of conditions attached to the loan. The release of credit is then delayed until each and every condition of the IMF has been met. The only way that Pakistan can now secure loans and vital extensions on its debt is to institute the Structural Adjustment Programs that have been drawn up by IMF economists. The problem is that the benefit of these programs is questionable. Most countries have suffered immensely from them. Instead of improving the economy, these programs have been destroying them. Unfortunately, like other countries that have yielded to the them, Pakistan is virtually being taken over by the IMF, along with the World Bank. There is increasing evidence of this everywhere:

Some common words found in the essay are:
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Approximate Word count = 6037
Approximate Pages = 24 (250 words per page double spaced)