The 14 papers that comprise this book, edited by Ke-young Chu and Sanjeev Gupta, provide a comprehensive review of the IMF's work on social safety nets. Part I provides a broad overview of the social concerns in structural policy and the basic work related to social safety nets. Part II deals with the design of social safety nets. Part III provides case studies on nine countries from different parts of the world.
The papers presented in this volume edited by Taher H. Kanaan - the eighth in a series of seminars sponsored by the Arab Fund for Economic and Social Development, the Arab Monetary Fund, the IMF, and the World Bank - explore the relationship between economic reforms, growth, employment, and social sector performance. Topics discussed include the political and social dimensions of policies privatization in the social sectors, social safety nets, poverty and the poor, and women, poverty, and population growth.
This seminar volume, edited by Richard C. Barth, Alan R. Roe, and Chorng-Huey Wong, presents an overview of the links between structural and macroeconomic policies that were addressed in an IMF Institute seminar held in Washington, D.C., in 1993. The most important areas of structural reform are covered: the price system, tax and expenditure policy, exchange rate management, external trade, public enterprises, the financial sector, and social safety nets. Four case studies are presented: China, Poland, Argentina, and the Gambia.
Most Arab countries have embarked on, or are in the process of formulating, medium-term economic reform policies with an important common objective: sustaining a high level of economic growth. This objective reflects policymakers’ increasing recognition that structural changes and financial stability are needed if their economies are to (1) provide sustainable employment opportunities for the un- and underemployed, as well as for the increasing number of nationals entering the labor force; (2) progress further in improving basic social indicators; and (3) benefit from the important changes taking place in the regional and international economies.
It is my pleasure to welcome you to this IMF Institute seminar, which over the next week offers you the opportunity to discuss in some detail the linkages between structural reform and macroeconomic stabilization. Perhaps the most logical place for me to begin is with the terms being used. Structural reform is a broad term that encompasses those policies aimed at improving market functioning, while macroeconomic stabilization has as its goals low inflation rates, high employment levels, a sustainable external position, and relatively calm financial markets. Recent experience and policy challenges in all parts of the world have demonstrated the interdependence of these two prerequisites to sustainable growth. For without macroeconomic stability, market signals are no longer clear, and restructuring is hampered by uncertainty. Conversely, a lack of structural reform undermines stabilization policies.
My remarks will concern economic reform efforts and macroeconomic stabilization in China. There are some remarkable differences between the effects of the Chinese reforms and the results to date of the reforms that have been undertaken in the countries of Eastern Europe and the former Soviet Union (FSU). While valuable conclusions can be drawn from both sets of experiences, China offers some unique lessons.
From 1978 to 1992, China’s liberalization was gradual, with a fairly stable price level and extraordinarily rapid output growth. Since 1989, rapid liberalizations in Eastern Europe and the former Soviet Union (FSU) attempted in the face of falling real output have generated much higher inflation. Yet both regions’ fiscal policies have been surprisingly similar. Like its socialist counterparts in Europe, the Chinese Government has seen its revenue share in GNP fall sharply; in 1991-92, its fiscal deficit approached 10 percent of GNP, as illustrated below. How did China manage to avoid inflation when its government was such a heavy borrower from the state banking system?
Comparing Argentina in the 1980s with Argentina today, I am struck by a phenomenal change. For Argentina, the 1980s started off with the debt crisis and the war in the South Atlantic. The decade was characterized by negative GDP growth, capital outflows, persistent fiscal problems, and hyperinflation. Inflation averaged more than 300 percent a year before 1985 and more than 1,000 percent a year between 1986 and 1990, with two episodes of hyperinflation. Overall, the 1980s were a lost decade for Argentina.
Let me begin by providing a brief overview of the proceedings so far in order to identify some of the issues our panelists may want to address. The seminar to date has covered the main linkages between macroeconomic stabilization and reform and has included case studies from both developing countries and transition economies. Two well-known principles have been reaffirmed, namely, that macroeconomic stabilization is a necessary, but not a sufficient, condition for sustained growth; and that structural reforms are necessary in order for macroeconomic stabilization to be effective.
This paper discusses the experiences of Jordan, Algeria, and Tunisia with social safety nets. Since the beginning of their developmental efforts, these countries have accorded special attention to social development, adopting strategies that were designed to ameliorate the living standards of the population, particularly low-income groups, and improve the distribution of income. Toward this end, they established elaborate and extensive schemes to provide targeted social services and transfers in cash and kind to these groups and in untargeted services to society at large.