Tiêu đề Unit 7 Macroeconomics ✅

MACROECONOMICS SECOND YEAR M.A. ECONOMICS
UNIT- VI MACRO POLICIES Structural Adjustment, Market Failure and Government Intervention
Structural Adjustment Structural adjustment program (SAPS) consist of loans provided by the IMF and the WB to countries that experienced economic rises. The two Bretton Woods institutions require borrowing countries to implement certain policies in order to obtain new loans. The conditionality clauses attached to the loans have been criticized because of their effects on the social sector. SAPS are created with the goal if reducing the borrowing country's fiscal imbalances in the short and medium term or in order to adjust the economy to long-term growth. The bank from which a borrowing country receives its loan depends upon the type of necessity. The IMF usually implements stabilization policies and the WB is in charge of adjustment measures. SAPS are supposed to allow the economies of the developing countries to become more market oriented. This then forces them to concentrate more on trade and production so it can boost their economy. Through condition, SAPS generally implement free market program and policy.
These programs include internal changes (privatization and deregulation) as well as extreme; one especially the reduction of trade berries. Therefore, SAPs is related to poverty alleviation and came due to failure of investment in various infrastructure developments. Following polices are considered for adjusting the structure of the economy. →Disinvestment in public enterprise liquidation and privatization of public enterprises →Interest rate deregulation →Exchange rate deregulation →Heavy cuts in tariffs and trade barriers →Trade liberalization →Public sector reform →Recording of govt. expn priorities Hence structural adjustment policies are economic policies which countries must follow in order to qualify for new WB and in IMF loans and help them make debt repayment on the older debts owed to commercial banks , governments and the WB. Although SAPS are designed for, individual countries but have common guiding principles and features, which include export led growth privatization, liberalization, and the efficiency of the free market.