Back | Programme Area: Special Events (2000 - 2009)
Opening Space for Development (Draft)
In the past, countries had national development strategies. Even though the external sector could play an important role, the basic dynamics for development was seen to come from within countries (Sunkel, 1993). In the 1990's, the new development strategy became liberalisation, and in particular integration into the global economy. The basic indicators for a "successful" development strategy became how much the trade and capital account had been opened up, how much the financial sector had been liberalised, how much the economy had been privatised. Indeed, globalisation and liberalisation became the new development agenda.
To some extent, this new development strategy arose from external pressures. A particularly high profile in the analysis has been given to influence via IMF and World Bank conditionality. However, perhaps more important - and increasingly so - is the pressure arising from "financial markets," which heavily influence both development strategies and macro-economic policies. Governments increasingly follow policies that are not necessarily the best for their economies or their peoples, but that are "acceptable to the markets" because if they do not do so, they will be implacably punished by those markets (Eatwell, 1997). However, the shift towards a rather pure liberalising and globalising agenda by most developing countries arose not only from external pressures, but also reflected the widespread view in many of the developing countries (and particularly amongst their governing elite) that market reform and, particularly, opening the economy to global links would lead to faster growth and higher investment and employment. Implicitly, there was a belief that countries which reformed well would significantly increase their exports and attract large and stable external capital flows, which would complement domestic savings and help increase productivity.
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