Question

Which of these are requirements faced by governments receiving structural adjustment loans under neoliberal economic policies?a.increase spending on health and educational servicesb.implement regulations on banks and financial institutionsc.maintain price supports on essential commoditiesd.privatize state-owned enterprises

Answer 1

The International Monetary Fund (IMF) and the World Bank (WB) offer loans (structural adjustment loans; SALs) to nations that are going through economic crises.

Option D : privatize state-owned enterprises

What is Structural adjustment?

• To qualify for a loan from the World Bank or the International Monetary Fund, a nation must implement a set of economic reforms known as a structural adjustment.
• Economic policies like lowering government spending, promoting free trade, and others are frequently included in structural adjustments.
• Structure changes are often referred to as free market reforms, and they are approved if it is believed that they will increase the competitiveness and economic growth of the target country.
• Conditions have long been attached to loans made by the World Bank and International Monetary Fund (IMF), two Bretton Woods organizations that were founded in the 1940s.
• However, there was a concerted effort in the 1980s to use lending to poor countries experiencing crises as a platform for reform.

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