ISAS Briefs

In the 1970s, the oil - producing and exporting countries of the Middle East delivered a shock to the global economic system that had many unexpected consequences. The then - q uadrupling of the price of oil hastened a process that came to be called “globali s at ion” . It deeply affected the structure of the global economy and also produced a number of political consequences. The oil - importing developing countries were the most - affected group . Some of those who could borrow from the world’s capital markets did so t o pay the oil import bill. This created indebtedness and moved some of the countries which had borrowed massively towards default on their external obligations. Many of them turned to the International Monetary Fund for help. The Washington - based instituti on responded with aid - and - policy - reform packages that were unprecedented in its history. The Fund received additional funding from the world’s rich nations to follow through with these program me s.