ABSTRACT
The concept of structural adjustment as commonly used in the 1980s has its origins in the global economic events of 1973-1974 and the first oil shock. The 350 percent rise in oil prices hit developing country economies far more severely than it hit the 22 nations of the Organization of Economic Cooperation and Development. In keeping with its primary function to stabilize the international financial system, the International Monetary Fund (IMF) responded to the evolving crisis by widening the range of financing facilities available to member countries. Although drawdowns on credit tranche, followed by the Supplementary Facility, assumed the largest proportion of IMF lending in the early 1980s, the little-used Compensatory Financing Facility covering export shortfalls became an important source of financing. Turkey received the first structural adjustment loan in 1980. But in mid-1980, the country began to switch to sector adjustment loans.
