Adjustment policies may harm small businesses, boost exports, and trigger inflation.
Adjustment policies like changing exchange rates and credit controls affect different types of businesses in developing countries in various ways. Small businesses may suffer from higher costs and reduced access to credit, while larger corporations can adjust prices to offset these changes. These policies can impact household incomes, savings, and investments, leading to changes in overall economic activity. Devaluing currency can boost exports but also raise inflation and debt servicing costs. The success of these policies depends on how well they address conflicts between different groups and consider how businesses will react.