Question

Often, the IMF loans money to a country undergoing a financial crisis. The loans come attached with a set of conditions. For this assignment, do the following: ) Read up on the crisis you selected and figure out what role the IMF played. Make sure to get more than one perspective on what happened. While some claim that the IMF helped resolve the issues, others contend that it made things worse (and was possibly responsible for the crisis in the first place).

Answer 1

So this is what happened in India in 1991.Owing to several factor like fiscal imbalances,balance of payment problems,the gulf war and associated issues increased India's oil import bills,export slumped and put india in an economic crisis...India had foreign reserves to meet the requirements for 3 more weeks...and that is when India asked for the help of IMF and World bank...

This is what happened.India pledged it's gold reserve and took loan from these two institutions.But it came with a set of clauses.india had to open its economy for foreign investments. The changes are collectively known as liberalisation,globalisation and privatisation.

While we cannot say that IMF cause dthe problems we can surely say that IMF solved the problem for the time being. The effects of liberalisation, globalization is clearly visible in the economy. But it also created a class division in the economy.