Trade and exchange rate policies in growth-oriented adjustment programs

Abstract

The search for “adjustment programs oriented towards growth” is a reaction to
a generalized disagreement with the stabilization programs that the lMF recommends for indebted
nations. A new orthodoxy is emerging from this situation, which relates the recuperation
of the debtor nations to a change to development oriented to the external sector, based
on the liberalization of international trade. This article describes many important limitations
of this new orthodoxy. The strong emphasis on liberalization has no historical basis and
does not really correspond to the experiences verified in the successful Far Eastern economies.
Moreover, it diverts attention from the more urgent needs of the indebted economies.

JEL Classification: H63; F31; F34; F43.