O Washington Consensus was the way a meeting that took place in 1989 in the capital of the United States was popularly recognized. At this meeting, a series of recommendations were made aimed at the development and expansion of neoliberalism in Latin American countries. This meeting was called by the Institute for International Economics, under the name of "Latin Americ Adjustment: Howe Much Has Happened?”, and involved institutions and economists with a neoliberal profile, as well as some thinkers and administrators from Latin American countries.
In general, no “unprecedented” measures were advocated during the Washington Consensus, which was named after the economist John Willianson due to its wide acceptance by the countries of Latin America, except, until then, Brazil and Peru. The ideas of this meeting – seen as a “recipe”, and not as an imposition – were already proclaimed by the governments of the countries developed, mainly US and UK, since the 1970s and 1980s, when Neoliberalism began to advance by the world. In addition, institutions such as the IMF and the World Bank already placed the neoliberal primer as a necessary prerequisite for granting new loans and economic cooperation.
The objective of the points of this meeting, according to John Willianson himself, was to “accelerate development without worsening the distribution of income”. Thus, the recommendations presented revolved around three main ideas: economic and trade opening, application of the market economy and macroeconomic fiscal control.
Among the basic premises placed in the Washington Consensus, we can highlight:
a) Fiscal discipline, in which the State should cut expenses and eliminate or reduce its debts, reducing costs and employees.
b) Fiscal and tax reform, in which the government should reformulate its tax collection systems so that companies pay less taxes.
c) Privatization of state-owned companies, both in commercial and infrastructure areas, to ensure the predominance of the private sector in all sectors.
Do not stop now... There's more after the advertising ;)
d) Trade and economic opening of countries, reducing protectionism and providing greater opening of economies to foreign investment.
e) Progressive deregulation of economic control and labor laws.
Although Brazil was one of the few countries that did not immediately accept these measures, it was a of those who applied them more quickly, in a process that reached its peak throughout the decade of 1990. The main action of the Brazilian government in this regard was the implementation of the privatization policy, in which state-owned companies in the energy, telecommunications, mining and other sectors were transferred to the initiative. toilet.
The Washington Consensus thus became a true “cake recipe” for the implementation of neoliberal premises throughout the Latin American region, which followed its ideas mainly due to the pressure and influence exerted by the US government and by institutions such as the IMF, the World Bank and the Inter-American Development Bank (BIRD).
Left and statist groups and movements frequently criticize the consensus, mainly because they consider that their ideas would have been directed to serve North American interests throughout Latin America, in addition to benefiting local elites, favoring the concentration of income in the countries of the region. In opposition, these groups point out that the solution for the countries of the South would be to adopt an inverse policy to the recommended in Washington, with greater state intervention in the economy, in addition to the expansion and strengthening of laws labor.
Charge criticizing the Washington Consensus¹
_________________________
¹ Image source: Portal Luis Nassif
By Rodolfo Alves Pena
Graduated in Geography
Would you like to reference this text in a school or academic work? Look:
PENA, Rodolfo F. Alves. "Washington Consensus"; Brazil School. Available in: https://brasilescola.uol.com.br/geografia/consenso-washington.htm. Accessed on June 27, 2021.