Global Managerial Economics Essay Example | Topics and Well Written Essays - 500 words

Global Managerial Economics - Essay Example Some countries may not need financial assistance but advice on policies. IMF also extends this by providing Policy Support Instrument. Together with these programs offered by IMF is an austerity program. Financial aids are coupled with "neoliberal"1 ideology or agenda which is a prerequisite for the fund. Examples of these conditions are "cutbacks" or "liberalization" of the economy, opening markets for trade, minimization of government intervention, privatization which causes the reduced protection of domestic industries, currency devaluation, mounts in interest rates, "flexibility" of the labor market, elimination of subsidies, and incentive for foreign investors (Shah 2005). There has been a growing controversy on the effects of these austerity measures. Some critics claim that problems experienced by the countries aided by the IMF can be directly traced by the implemented austerity measures together with the organization's financial assistance. A good illustration of the above discussion is the global economic crisis which occurred from 1997-1999.