3. Strengths of Neo-liberal approach to development:
The collapse of the Soviet Union coupled with weak state intervention in many
developing countries paved the way for almost all of the states that emerged after the
collapse of the Soviet Union and many developed and social welfare states such as
Sweden and New Zealand to embrace neo-liberalism in one form or another. Whilst
some states embraced neo-liberalism voluntarily, others did so in response to
1 International Monetary Fund shall be referred to as the IMF in this paper.
NOVEMBER 2012 3
pressure and coercion (Harvey 2005 : 3). It is also argued that "Neo-liberalism has, in
short, become hegemonic as a mode of discourse. It has pervasive effects on ways
of thought to the point where it has become incorporated into the common-sense way
many of us interpret, live in, and understand the world." (Harvey 2005 : 3)
There is an argument that that neo-liberalism is a path to political freedom, which can
be achieved through economic freedom (Friedman 1962 : 8). Friedman also seeks to
attribute the political freedom achieved in Western countries since the 19th century to
economic freedom. More optimistically, Thomas Klak states that "Neo-liberal policy
represents a country’s ticket or passport to the globalizing economy" (Klak 1998 : 3).
Chile is often cited as the success story of the neo-liberal approach to development.
Chile's economic boom as a result of the implementation of neo-liberal policies
cannot be ignored. Chile did remarkably well in the years following the coup and the
implementation of neo-liberal policies in that its inflation rate alone dropped from
around 508.03% in 1973 to 23.09% in 1983 (Worldwide Inflation Data Website). At
the time, the neo-liberal economic solution seemed to work as inflation dropped
dramatically and the economy grew at an annual rate of 8%. Additionally, Chile's
international reserve rose from $167 million in 1973 to $4 billion in 1980 (Winn 2006 :
28). There was also an influx of huge capital into Chile, which played a significant
role in the economic growth of the country. This growth is often linked to the
implementation of neo-liberal policies in Chile. Similar results were also seen in
Argentine after the implementation of neo-liberal policies.
3. Strengths of Neo-liberal approach to development:The collapse of the Soviet Union coupled with weak state intervention in manydeveloping countries paved the way for almost all of the states that emerged after thecollapse of the Soviet Union and many developed and social welfare states such asSweden and New Zealand to embrace neo-liberalism in one form or another. Whilstsome states embraced neo-liberalism voluntarily, others did so in response to1 International Monetary Fund shall be referred to as the IMF in this paper.NOVEMBER 2012 3pressure and coercion (Harvey 2005 : 3). It is also argued that "Neo-liberalism has, inshort, become hegemonic as a mode of discourse. It has pervasive effects on waysof thought to the point where it has become incorporated into the common-sense waymany of us interpret, live in, and understand the world." (Harvey 2005 : 3)There is an argument that that neo-liberalism is a path to political freedom, which canbe achieved through economic freedom (Friedman 1962 : 8). Friedman also seeks toattribute the political freedom achieved in Western countries since the 19th century toeconomic freedom. More optimistically, Thomas Klak states that "Neo-liberal policyrepresents a country’s ticket or passport to the globalizing economy" (Klak 1998 : 3).Chile is often cited as the success story of the neo-liberal approach to development.Chile's economic boom as a result of the implementation of neo-liberal policiescannot be ignored. Chile did remarkably well in the years following the coup and theimplementation of neo-liberal policies in that its inflation rate alone dropped fromaround 508.03% in 1973 to 23.09% in 1983 (Worldwide Inflation Data Website). Atthe time, the neo-liberal economic solution seemed to work as inflation droppeddramatically and the economy grew at an annual rate of 8%. Additionally, Chile'sinternational reserve rose from $167 million in 1973 to $4 billion in 1980 (Winn 2006 :28). There was also an influx of huge capital into Chile, which played a significantrole in the economic growth of the country. This growth is often linked to theimplementation of neo-liberal policies in Chile. Similar results were also seen inArgentine after the implementation of neo-liberal policies.
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