chapter  10
42 Pages

ECONOMIC POLICY REFORMS

Distributional impact

Since 1980, most countries of the Middle East have introduced a mix of policies, termed simply ‘economic reforms’, in response to growing economic difficulties associated with serious foreign debt problems. Some initiated their own reform programmes without international support. But many who failed to get new loans from commercial creditors turned to the World Bank and the IMF for help, agreeing to take severe actions within a short period. Such conditionality requires not only the acceptance of a package of policies but also their sustained implementation. This contractual obligation, in effect, means that the World Bank and the IMF have become key policymakers in these countries, contradicting the aims of their establishment at Bretton Woods.1