POLC38H3 Chapter Notes - Chapter 5: Thai Baht

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NOV 17-Prosperity and Violence Chapter 5- BATES
In the early 1980s shocks to the international economy precipitated a crisis of debt;
less than a decade later the collapse of the soviet union
These changes had a profound impact upon the economic policies of developing
nations, the nature of their politics and the structure of institutions
Governments were compelled more tightly to limit their spending and adopt more
market-oriented economic policies
Industrial countries placed a lower priority on checking the spread of violence in the
developing world
The economic policies of the developing nations thus rendered them structurally
dependent upon foreign capital
After the oil crisis, the developing countries were punished twice as much as the
wealthier nations
The money that the oil producing countries put them in developed countries banks
Developing countries sought loan from these banks
Much of the countries like Mexico declared that they could not repay debts
The collapse of the Soviet Union compounded the forces unleashed by the debt crisis,
leading to changes in economic policy and to the restricting of politics in the
developing world.
IMF worked with private banks and institutions to restructure the obligations of the
developing nations to adopt policies that would lower the demand for imports, and
thus ease the burden of paying for previous purchases abroad
For developing countries, agriculture represented the point from which development
was to begin
The case of Brazil; through the institute of Coffee they limited exports so as to
increase prices and extract revenues from foreign consumers
With the revenue created infrastructure and jobs
But with the oil crisis became a major debtor
The change in economic policies thus had a change in political order as well
Political tension also increased
With the collapse of communism, the advanced industrial nations sought to
consolidate the victory of democracy by securing the prosperity of the formerly
communist states
Domestic pressures have also animates the process of change
Military governments have presided over the economy at the time of the debt crisis
Economic and political demands thus blended, animating new political alliances and
linking demands for market-oriented policies with demands for democracy
The change in institutions thus accommodated the change in development policy and
provided a means in which the government could retreat from policy commitments
that had become economically untenable
Policy reform conferred economic power upon embattled incumbents, rendering them
willing to surrender political power
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