The Washington Consensus as a prescription for Arab oil-exporting countries: A critical evaluation

Abstract

Arab oil exporting countries have been advised by the IMF to diversify their economies away from oil and that the way to do that is to adopt the ten principles of the Washington Consensus, which call for liberalization, deregulation and privatization. It is not clear how measures like these are conducive to economic diversification, but the message is obvious—that diversification cannot be done without giving the private sector the driving seat and without the participation of multinationals through foreign direct investment. This paper presents a critical evaluation of the advice given by the IMF to Arab oil exporting countries and conveys a simple message to policy-makers in those countries: that they should handle with care the advice received from the IMF.