ECONOMIC REFORM AND ITS ROLE IN ECONOMIC DEVELOPMENT IN DEVELOPING COUNTRIES
Dr.Seyed Kamal Sadeghi
University of Tabriz
Osamah Kazem Al-Qargholi
University of Tabriz
When adopting economic reform policies, the governments of developing countries tried to ensure that more attention was given to the social consequences of economic reform processes. Still, compliance with the bilateral conditionality of the International Monetary Fund had an inappropriate effect on the people of those countries, as the level of poverty did not decline, but rather, on the contrary, the number of people living in poverty has increased in many cases. The established social safety nets have lost credibility due to their insufficient response in addressing the failures of economic reform programmers.
The Research’s importance stems from the fact that the Arab countries relied heavily on economic reform programs to get rid of their financial problems. The Research also aims to introduce the economic reform programs supported by the International Monetary Fund and the World Bank and study these programs’ most critical objectives and justifications. An analysis of the economic and social effects of economic reform programs on economic development in Arab countries.
The Research reached several conclusions, the most important of which is that most developing countries suffer from a severe and growing shortage of financial resources. This situation is due to the internal deficit. Its indicators (low levels of savings and deficiencies in public budgets) accompanied by an external obligation of the current account in particular, which prompted them to rely on sources of financing External, the direct result was the growing issue of external indebtedness, and as a result of external borrowing reaching its maximum limits on the one hand. The ever-increasing burden of servicing this debt, on the other hand, the trend of lending shifted to income, especially from the banking system.
The Research concluded with a set of recommendations, perhaps the most prominent of which is the need to design economic reform policies that support the requirements of increasing economic growth and employment by activating the market mechanism and developing its institutions, encouraging the private sector to increase production and investment in all industries, and working to create the appropriate investment climate to stimulate local private investment.
Keywords: Economic Reform, Economic Development, Reform Policies, Developing Countries.