Ha-Joon Chang And Ilene Grabel — Beginning of the End of the Neoliberal Approach to Development?

We should take note of what we see as the beginning of the end of the neoliberal approach to development. The process of discrediting that development model begins in the aftermath of the east Asian financial crisis of 1997–98.

At the time there appeared to be nothing new in the nature of the east Asian crisis or in the crisis response. But, in fact, the east Asian crisis marked the gradual beginning of the end of the neoliberal consensus in the development community.

The severe constraints on policy space that followed the east Asian crisis created momentum behind a new vision – that developing countries had to put in place new strategies and institutions to prevent a repeat of the events of the late 1990s.

Policymakers in a number of Asian countries and in other successful developing countries sought to insulate themselves from the hardships and humiliations suffered by east Asian policymakers at the hands of the IMF. Indeed, as a consequence of the crisis, the IMF suffered a loss of purpose, standing and relevance....

It is notable that even recent reports of institutions like the World Bank have acknowledged the trend towards “economic multipolarity”.

Just as the Asian crisis laid the groundwork for institutional developments that have deepened only in the current crisis, so do we expect the current crisis to catalyse further innovation along the lines already in place, and in directions not yet imagined, when the next period of instability emerges. 

Said as Ukraine falls into the clutches of the IMF with predictable strings attached involving "reforms" like hiking the price of energy 50%, when they had a much better deal with Russia.

Counterpunch
Beginning of the End of the Neoliberal Approach to Development?
Ha-Joon Chang And Ilene Grabel