"Washington Consensus"

The Washington Consensus is a set of economic prescriptions for macroeconomic policy, set forth by the British economist John Williamson in 1989. They were intended as basic guidelines for countries that needed assistance from such international economic organizations as the World Bank and the International Monetary Fund. The main emphasis was on the importance of macroeconomic stability and integration into the world economy, in other words, the neoliberal view of globalization. However, it led to limited results, after it was applied in countries experiencing economic crises.

Over the years, the Washington Consensus was accused of a number of serious destabilizations, primarily in the Argentine crisis. John Williamson noted that in many cases the results of its implementation were disappointing, identified some shortcomings, but at the same time summarized that this policy has brought and positive results, namely - economic growth, employment, poverty reduction in many countries.

Ideas for the time when they were formulated by Williamson were not new. But they represented the quintessence of common themes among the recommendations that were determined by the International Monetary Fund, the World Bank, the US Treasury and other lending bodies.

The goal of the standard package of reforms was to solve the real problems that have arisen in the countries of Latin America. Its subsequent use in relation to other countries is criticized even by the supporters of the rules. As Williamson himself pointed out, the term he introduced for ten concrete recommendations on economic policy began to be used in a broader sense than his original intention, he was associated with market fundamentalism and neo-liberal politics in general. And in this broad sense, the "Washington Consensus" has been criticized by many economists, including George Sores, Nobel laureate Joseph Stiglitz, as well as Latin American politicians.

The public around the world today is confident that this is evidence of such a neoliberal policy when Washington's international financial institutions have created a number of specific measures against Latin American countries experiencing an economic crisis that have led to even greater losses. There are even people who can not utter the words "Washington Consensus" and do not get furious.

The ten reforms that formed the list of Williamson, in fact, represented a basic level.

1. Budget discipline. This was to be carried out in all countries where there was a large deficit leading to a balance of payments crisis and high inflation, which hit the poor classes, as rich people could keep their monetary assets abroad.

2. Redistribution of public expenditures in those areas that offer high economic returns, and the potential for improving the distribution of income (this is medical care, primary education, infrastructure).

3. Tax reform (reduction of marginal rates, expansion of the tax base).

4. Liberalization of interest rates.

5. Competitive exchange rate.

6. Liberalization of foreign direct investment.

7. Privatization.

8. Trade liberalization.

9. Deregulation.

10. Ensuring property rights.

The adoption by many governments of the "Washington Consensus" was largely a reaction to the global economic crisis that hit much of Latin America and some other developing regions during the 1980s. The emergence of the crisis had several reasons: a sharp increase in prices for imported oil after the creation in 1960 of OPEC, setting the level of external debt, growth in the US, and, consequently, in the world of interest rates. As a result of these problems - the loss of access to additional foreign loans.

I must say that many other countries have tried to implement different items of the proposed package, sometimes it is used as a condition for obtaining loans from the IMF and the World Bank.

However, the results of these reforms remain the topic of many debates, and economists and politicians continue to analyze the causes and factors of economic crises since the first world economic crisis in 1857, which even influenced Russia. The fact is that Karl Marx began work on Capital in the winter of 1857-1858, and this was due to the economic crisis that broke out in the autumn of 1857. Today, as is known, the theory of crises is connected precisely with the Marxist economy.