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Based farming for survival reform of the formal

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based farming for survival), reform of the formal sector of the economy (such as registered, profit-making companies) has little impact on improving their lives.■ Opening markets to foreign investors clearly aids in boosting foreign direct investment, but can alsoexpose fragile economies to the effects of foreign economic crises.■ There is a fundamental clash with state sovereignty, particularly if an SAP is at odds with the policiesthat a democratic government has been elected to implement.ExtensionLook at the SAPs on Greece and Pakistan and add your commentary:PakistanWhat were the loan conditions and outcome:Example of SAP requirementIncrease the amount of taxes the central government raises in order to help easegovernment debt. In 2009, it was estimated that 3.2 million Pakistanis who ownedmultiple properties and bank accounts were not registered for paying tax.Privatised the national airline and 67 other state owned companies that hadaccumulated losses amounting to billions of dollars.Impact of SAPRemoving tax breaks created progress, but the IMF assessed tax revenuecollection in 2016 as still‘belowPakistan’s potential’.Pakistan received several new loans despite not making progress onprivatisation.GreeceWhat were the loan conditions and outcome:Example of SAP requirementReduce public spending on government wages and welfare benefits. The Greeksystem of state pensions was costing 17.5% of Greece’s GDP. The Greekgovernment was required to make 1 billion of savings through pension reformsalone.Impact of SAPThe Greek Parliament voted in 2016 to approve reforms to income tax andgenerous state pension schemes. Greece’s governing anti-austerity party, Syriza,proposed the reforms in the face of public protests. Pensions have been cut manytimes and are now estimated to be worth 25– 55% less than at the beginning ofthe debt crisis.HWPrepare for a discussion on whetherthe IMF is a force for good in the global economy:Yes it isNo it isn’tTheIMFdoes serve a veryusefulrole inthe world economy. Through the use ofCriticisms of the IMF include
lending, surveillance, and technicalassistance, it can play a vital role in helpingidentify potential problems and being ableto help countries to contribute to the globaleconomy.Researchers have found thatIMFprogramswere relativelysuccessfulespecially in thelenders' early years. He found that theIMFprograms' short- and long-term impactswere largely positive on the countries'current accounts, balance of payment andinflation figures.1. Crisis always lead to somedifficultiesBecause the IMF deals with theeconomic crises, whatever policy theyoffer, there are likely to be difficulties. Itis not possible to deal with a balance ofpayments without some painfulreadjustment.

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Term
Spring
Professor
TIM BALE
Tags
Economics, International Monetary Fund

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