ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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An Alternative to the Fund-Bank Model

ECONOMIC liberalisation and globalisation of the economy now holds the centrestage in economists' attention. To the West, these appear to be the most benign means of relieving their economies of the recession through which they are passing and simultaneously pulling the third world out of the stagnation they are struggling to overcome. For many of the economists in the third world these appear to be the only feasible means open to introduce dynamism in their economies. Such convergence of views between the leading economists of the north and the south has rarely been observed earlier. Perceptive economists have always distinguished their policy prescriptions keeping in view the levels of development of the respective economies, which laid the foundation for the discipline of development economies. The World Bank and the IMF and the donor countries of the western world, however, have a different perception of the problems. They have drawn up a set of guidelines which should apply universally, irrespective of the prevailing structural features and different levels of income and development. The thrust of their policy prescriptions is on reliance on market forces to obtain efficient allocation of resources. The strategy advocated is of privatisation of public sector enterprises, withdrawal of subsidies, liberalisation of credit facilities, withdrawal of all restrictions to private sector investment activities and restriction of government investment to building of infrastructure only.

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