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Neoliberalism and Globalization

International Monetary Fund

Project: Neoliberalism and Globalization
Open-Content project managed by AJB, mtuck

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This project will attempt to document the causes and effects of the neoliberal form of capitalism and its influence throughout the globe.

The International Monetary Fund approves of a $3.9 billion to the Mexican government. As a condition for receiving the loan, the Mexican government is expected to engage in a series of free market reforms. Such reforms include: fiscal austerity, privatization of state-owned companies, reductions in trade barriers, industrial deregulation, and foreign investment liberalization. [New York Times, 12/24/1982, pp. D4; Global Exchange, 9/2001, pp. 3 pdf file]

Entity Tags: International Monetary Fund, Mexico

Category Tags: IMF, Mexico

The IMF’s recommended reforms are widely viewed to have a negative effect on the earnings of the average Mexican. For example:
bullet In the period between 1983 and 1988, per capita income falls at a rate of about 5 percent per year.
bullet In the same period, the value of workers’ real wages falls from 40 to 50 percent.
bullet The share of national income received by workers declines from 49 percent in 1981 to 29 percent in 1990.
bullet Adjusted for inflation, the Mexicans’ real wages fall by 75 percent throughout the 1980s. [Global Exchange, 9/2001, pp. 4 pdf file; Harvey, 2005, pp. 100]

Entity Tags: Mexico, International Monetary Fund

Category Tags: IMF, Mexico, Statistics

Financial sources inform media outlets that the Mexican government’s failure to cut its budget deficit in accordance with an IMF austerity program may jeopardize its access to $908 million worth of assistance. This news comes at about the same time as an earthquake hits Mexico that will require the government to spend even more on reconstruction, thereby increasing the deficit. The IMF says that it will not make any exception as a result of Mexico’s fiscal needs following the earthquake. [New York Times, 9/20/1985, pp. A6]

Entity Tags: Mexico, International Monetary Fund

Category Tags: IMF, Mexico

The IMF grants Haiti a $24.6 million loan under its Structural Adjustment Facility (SAF). As a condition, Haiti is expected to cut public spending, close “inefficient public enterprises”, and liberalize its trade policy. [Inter Press Service, 12/30/1986]

Entity Tags: International Monetary Fund

Category Tags: Haiti, IMF

In early 1994, investors pull money out of the Mexican economy in response to an increase in US interest rates and political instability. This causes the Mexican government to lose massive amounts of reserves and lead it to allow the peso to float in December of 1994. In January of 1995 it again asks the IMF for assistance and receives packages from both the IMF and US Treasury. This time, massive privatizations of “transportation, banking and finance, railways and the petrochemical industries” were recommended as a way of paying off the loans. A devaluation of the peso in 1995 along with an IMF-mandated rise in interest rates triggers the worst depression in Mexico in 60 years. GDP falls by 6.2 percent, wages fall by 25 percent, unemployment doubles, and 12,000 Mexican firms file for bankruptcy. [Global Exchange, 9/2001, pp. 4-5 pdf file; Hart-Landsberg, 12/2002]

Entity Tags: US Department of the Treasury, Mexico

Category Tags: IMF, Mexico, Statistics

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