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Why did socialist governments take out IMF loans in the 1980s? (lemmygrad.ml)

submitted 6 months ago by [email protected] to c/[email protected]

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I noticed that several socialist countries took out loans from the IMF (Yugoslavia, Poland, Romania) even though there was an understanding that the IMF is a predatory organisation. I assume it is connected to the wave of liberalisation in the 1980s, but would be interested in a more concrete breakdown of the logic and context behind it, or articles/links on the topic.

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[–] [email protected] 17 points 6 months ago

The 1980s were a time of incredibly high USD interest rates. Known within the US as the Volcker Shock, interest rates were increased to about 20% to reduce inflation. Outside of the US this precipitated a debt crisis, as many countries were suddenly unable to make interest payments due to the punishing interest rates. Many were forced to go to the IMF for emergency loans to cover the skyrocketing costs of their already existing loans.

I think Radhika Desai's first book and many of her research papers deal with this topic.