monopolies, and a pro-urban, anti-agricultural bias. The Government actively supported industrialization by maintaining an overvalued exchange rate to promote imports of capital equipment and immediate goods, by protecting local producers with high tariffs on finished goods. Government subsidization policies during this period placed a negative effect on the fiscal balance. The Government increased its foreign borrowing to compensate for the steep decline in the international purchasing power of copper. (c) Economic Transition (1985-1990); this period was characterised by the introduction of un-sustained stabilization and structural adjustment policies. Significant socio-economic changes were undertaken; and (d) Stabilization and Structural Adjustment (1991 onwards); the Government actively pursued policies that facilitate private sector growth, including price, trade, exchange and interest rate policies; financial sector liberalization; and more responsible fiscal and monetary policies. Agricultural output and input markets were liberalized and significant privatization and other institutional reforms were undertaken. 18. The experiences of the past three decades show that sustained improvements in living standards require the country’s economic policy to be set in a medium term context, with appropriate consideration for the relative strengths of the different economic policies. The medium-term fiscal objectives aim to enhance domestic resource mobilization for the social and poverty programs and for investment in infrastructure. These objectives are consistent with lowering inflation to the single digit level and to moving towards a sustainable external current account deficit. 28