At the same time, the Fund was encouraging the government to increase timber exports and grant concessions to private companies. Regulations were relaxed and unprecedentedly large concessions were given to private developers. Lax regulations and reduced enforcement led to increased clear cutting and environmental degradation. In addition, the IMF does not encourage governments to set realistic values on the commodities which they sell on the world market. The International Monetary Fund promotes deregulation of labor markets because it contends that labor markets are overburdened with regulations, creating disincentives for employers to hire more workers.
Deregulation harms the labor force in many ways.
One of the most significant impacts is through abolishing minimum wage and collective bargaining laws. In many cases, the Fund encourages countries to foster low wages in order to attract foreign investment. The deregulation of labor standards in these countries is especially devastating to workers because they are not organized, generally are not permitted to organize and are unable to bargain for better working conditions. People end up working longer hours for less pay. The deregulation of the economy also results in rapid and substantial job loss as public sectors are quickly privatized.