South Perspectives - April 1999

SUMMARY (excerpt)

A New South Agenda: The Rationale

Recent political, economic, technological and institutional changes have had a major impact on the global environment for development. In particular, the end of the cold war signified the beginning of a new era in international relations, in which the political and economic ideologies of the major market economies gained a new ascendancy. Liberalization, deregulation, privatization and monetary-fiscal discipline as policy prescriptions came to be presented as a universal panacea of benefit to the developing and developed countries alike.

There have been significant developments in the global economy under the influence of this new doctrine. However, initial high hopes in developing countries have given way to concern. Many countries have taken significant steps to deregulate, liberalize and integrate further into the world economy, but major benefits have not been realized. The development of the poorest countries has in some cases been prejudiced. Several richer developing countries, with a long history of fast growth and sound economic fundamentals, have recently experienced a severe economic setback, arising from a financial crisis generated by the instabilities associated with financial liberalization and from inappropriate policy prescriptions to deal with the crisis.

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