Structural Adjustment Policies Seeks to enhance the role of markets so as to promote development...
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Transcript of Structural Adjustment Policies Seeks to enhance the role of markets so as to promote development...
![Page 1: Structural Adjustment Policies Seeks to enhance the role of markets so as to promote development Make the economy more stable (↑ interest rates; ↓ gov’t.](https://reader036.fdocuments.net/reader036/viewer/2022072015/56649ed05503460f94bde8d8/html5/thumbnails/1.jpg)
Structural Adjustment Policies
Seeks to enhance the role of markets so as to promote development
•Make the economy more stable (↑ interest rates; ↓ gov’t subsidies; ↓ exch. rate; all to reduce inflation & put free market in charge)
•Structure the economy so it can participate in the global marketplace (privatisation; fiscal discipline)
•Free up trade to enhance benefits from comparative advantage (reduce protectionism & liberalise trade, liberalise capital markets and movement of investment funds)
![Page 2: Structural Adjustment Policies Seeks to enhance the role of markets so as to promote development Make the economy more stable (↑ interest rates; ↓ gov’t.](https://reader036.fdocuments.net/reader036/viewer/2022072015/56649ed05503460f94bde8d8/html5/thumbnails/2.jpg)
Repercussions of Struc. Adj. Policies • Harsh macroeconomic conditions for citizens – cuts in
gov’t subsidies, unemp., expensive imports, etc
• Gov’t expenditure cuts may be in health, infrastructure, etc
• Reduction of protectionism may give country a very narrow and high risk economic base (eg. a few crops)
• Trade liberalisation may not be reciprocated
• Basic market conditions may not be in place to take up from where gov’t left off
![Page 3: Structural Adjustment Policies Seeks to enhance the role of markets so as to promote development Make the economy more stable (↑ interest rates; ↓ gov’t.](https://reader036.fdocuments.net/reader036/viewer/2022072015/56649ed05503460f94bde8d8/html5/thumbnails/3.jpg)
Read this section in the Web Guide, Unit 5b; Edexcel!