Structural Adjustment Programmes : Official Aims Vs. Actual Experience
p. 17 · Read in the full issue
'he Structural Adjustment Programmes (SAPs) do vary from country to country, but the mam policies demanded by both the IMP and the World Bank are the same
Policies
Official Aims
Actual Experience
Currency Devaluation increase exports reduce imports UN survey of 12 SAPs found little improvement inexpert earnings; commodity prices fall as more exporters compete lor same markets; damages import-dependent economies I. Export Promotion earn foreign exchange tor debt repayment replaces food crops with export crops, "a recipe for starvation"; increases dependence on foreign markets. damages ecology through pesticides used in export agriculture and cutting of forests; earnings go to debt payments instead of investment in development; displaces rural people and damages environment by building large dams, irrigation projects, mining, five-star hotels and nuclear power protects . Government Spending Cuts reduce "excessive" demand means cutbacks in education, health services, sanitation, water & irrigation, electric power supply, roads S Iransportion i. Privatization make enterprises more efficient turning over utilities to private sector, where profitability overrides social welfare; exclude the poor from electricity. transportation & communication services; subsidizes private investors. i. Unreslrictive Imports increase international competitiveness; improve efficiency undermines local industries; discourages food self-reliance; encourages luxury imports, while poor cant afford basic necessities.
High Interest Rates allocate investment to "most efficient investors" discourages investment in production for home market; encourages speculations; reduces small farmers and small manufacturers access to credit; fuels inflation.
Restricted Money Supply control inflation depresses economy, raises unemployment; infrastructure deteriorates; U.N survey of 12 SAPs found only half lowered inflation.