Eli5 if IMF gives loan to a country, why they ask to impose tax on it’s people. What they want to achieve and how they come to know that the very country has achieved all the targets like tax collection, etc etc

Question

Eli5 if IMF gives loan to a country, why they ask to impose tax on it’s people. What they want to achieve and how they come to know that the very country has achieved all the targets like tax collection, etc etc

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Answer 1

The lenders want to get rich, not just give away free money, so they have to get the money paid back. If the country doesn’t give the money back they can just take over the country and seize assets, like an invasion.