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minimized, and if present at all should only focus on providing transparent rules and let the market solve every problem (Pallye, 2005). For the less developed countries the neoliberal agenda materializes in the form of structural adjustment programs, mainly delivered by external organizations such as the International Financial Institutions. Structural adjustment programs are used a precondition on receiving loans from these institutions and usually they include “cutbacks in public spending, currency devaluation, export promotion, opening up of both trade and capital accounts, privatization and tax reductions” (Colás, 2005, p. 87).
Structural adjustment programs are not exclusive to peaceful developing countries en route to economic success. Boyce (1995) notes that in El Salvador the peace building activities did not play any role in the type of the structural adjustment that was carried out by the government and the International Financial Institutions. The policies would have been the same even if the country was not coming out of war. Kosovo under United Nations Mission in Kosovo has followed transformation through privatization of socially owned companies and providing laws and other conditions for foreign investment (Pugh 2004), a strategy akin to what was typical for Eastern European countries post-communist transition in the early 1990-ties.
However, the neoliberal policies do not fit well in post-conflict settings. Free markets weaken social cohesion, and macroeconomic policies that have priorities in
repaying debts, sacrifice the role of the state in the social, labor and industrial policies (Pugh 2004). This has not gone unnoticed by the International Financial Institution, but as Pugh (2005) argues “the reform has been largely cosmetic” (p. 59). Studdard (2004) goes on to elaborate that “The set of economic policies relied upon by the donor community and International Financial Institutions (IFI’s) do not treat war transformation as distinct from economic crises unaccompanied by violence. To secure a lasting peace, it is necessary to understand that policies aimed at privatization, foreign direct investment, and deregulated markets may have debilitating effects on peace building” (p. 5). Cramer (2008) explains more specifically that labor markets “barely feature as a policy focus in the programmes for economic recovery after wars that are encouraged by international development agencies.” (p. 121)
Countries that have just emerged from war have plenty of problems to solve. Regardless of the underlying causes for conflict, the challenges they face probably include
some or all of the following: reconstruction of physical capital in the form of communication, housing and transports infrastructure in war struck regions, rebuilding of or creating new political institutions and building public trust in them, dealing with the economic decline, reestablishing of markets, providing basic goods and services such as

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