In contemporary world the neoliberal economists have pursued to establish the thought that economic liberalization consistently promotes growth and decreases poverty in less developed countries. Liberalization of markets in the developing countries, according to them, promotes exports and it will create economic perfection by intensifying competition between domestic and external economic actors and exposing management and workers to improved practices Did the market liberalization policies of Ethiopia is helpful? This paper surveys the literature and provides its own assessment of the nexus between private sector and trade liberalization in connection with export promotion. The country's step wise liberalization process has shown some favourable prospects for investment and growth. However, the next steps, liberalizing the capital account and leaving the exchange rate to be determined in the market, among other things, require a skillful design. The capital account which is still left unliberalized has to wait for some time till the economy ensures a sustainable capacity of generating foreign currencies. Otherwise economic instability would follow and consequently, the reform process would be as stake.
Financial Regulations in Developing Countries: Can They Effectively Limit the Impact of Capital Account Volatility?