This book explores issues related to poverty in South Asia in a two-pronged manner—by focusing on injustice created and perpetuated by the unjust nature of a social order as its source and by providing concrete suggestions about how policymakers may move to challenge these injustices.
Drawing on research inputs from studies across various South Asian countries, the book redefines poverty as a process which excludes certain segments of the society from equitable participation in development opportunities as well as decision-making. It further identifies a variety of operational ideas which can be used by policymakers, political activists, and civil society advocacy groups committed to build a more just, inclusive and poverty free society in South Asia.
Chapter 7: Financial Policies for Poverty Eradication
Financial Policies for Poverty Eradication
Market Failure in the Finance Sector
The Limits of Financial Sector Reforms in South Asia
Every South Asian economy was exposed to financial sector reforms, usually inspired by the IMF and World Bank, designed to liberalise the financial sector and make it more receptive to market forces. These reforms were usually directed to promote privatisation in the banking system and end the regime of financial repression which imposed a regime of regulated interest rates and directed credit to preferred sectors on the banking system, both public and private. The earlier approach to monetary policy was based on a belief that the financial sector was the handmaiden of the development process and could be used as an instrument to ...