Annual Report 2009-10 - Sustainable Development Policy Institute

ners, it has been decided to develop a dedicated “Advocacy Unit” for reaching and influencingpolicy makers. SDPI will provide technical support to the interested organizations in developingthe units and will train the staff with financial help from Plan Pakistan.For further details contact Mr. Gulbaz Ali. gulbaz@sdpi.orgIMF Stand-By Arrangements Program and its Impact on the Economy and People ofPakistanThere are quite a few voices about adverse impacts of standby facility on the economy & peopleof Pakistan. However, very little empirical research was conducted on this issue to back theabove-mentioned hypothesis with substantial evidence. To fill the vacuum, SDPI in collaborationwith Action Aid Pakistan have conducted a research study on the on-going International MonetaryFund (IMF) Stand-By Arrangement and its Impact on the Economy and the People of Pakistan.IMF's lending arrangement with Pakistan, worth SDR 7.23 billion (US $ 11.3 billion) aims to “(i)restore the confidence of domestic and external investors by addressing macroeconomic imbalancesthrough a tightening of fiscal and monetary policies, (ii) protect the poor and preserve socialstability through a we-targeted and adequately funded social safety net and;(iii) raise budgetaryrevenues through a comprehensive tax reform to enable significant increase in public investmentand social spending required for achieving sustainable growth”.The broad objective of the study was to examine critically the conditionalities attached to theprogram under the Agreement and to examine their impact on the economy as a whole relatingto the welfare of the people, especially in the context of education, health and social safety netsfor the poor. It provides an insight into the facts as to whether these conditionalities may be facilitatingthe achievement of the objectives or are in conflict with some or all of them.The main elements of conditionalities attached to the loan arrangements have been identified togauge whether the program is home-grown or designed by the Fund under stringent conditions,in view of the compelling circumstances of the national economy which after experiencing aphase of significant economic and social development, deteriorated sharply in the form of aneconomic crisis since mid-2008.It has been determined that this programme was essential to keep the economy afloat in 2008.While the programme promotes a tight monetary and fiscal policy, the government must ensurethat development related spending is not curtailed to provide for other non-productive expenditures.This study concludes that although the implementation of conditionalities may prove challenging;and may have negative effects on livelihoods of people at micro level, yet this programmay provide the basis for essential reforms (such as documentation of economy, reforms inpower sector governance, etc) to restore the financial and economic health of Pakistan.For further details contact Mr. Nazre Hyder. hyder@sdpi.orgAnnual Report2009 - 201037S u s t a I n a b l e D e v e l o p m e n t P o l I c y I n s t I t u t e