Do you think structural adjustment programs are good interventions or bad interventions?

Question: Do you think structural adjustment programs are good interventions or bad interventions? Why?

In my opinion, structural adjustment programs (SAP) are bad intervention based on its uniformity policies. During the 1980s, most of the countries in Latin America, Eastern Europe and Africa, with different forms of governments professing very different ideologies, found themselves trapped by levels of debt to international public and commercial banks which were far beyond their capacity to finance. Consequently, they came to depend on IMF and World Bank approval to persuade commercial banks to reschedule -their debts and maintain lines of commercial credit. Across several continents, state economic policies required the external approval of the international receivers, the IMF and the World Bank. The inability of governments to secure their fiscal bases and to satisfy the multiplicity of demands of their various constituents undermined their legitimacy and led to the emergence of popular movements demanding democratic reforms, and encouraged some regimes to embark in haste on strategies to transfer power to elected successors. The collapse of communist power discredited communist one-party regimes and their imitators in Africa. They also reduced the inclinations of the western powers to continue their military, political and financial support for authoritarian, and sometimes bankrupt, anti-communist regimes in Africa and Latin America. The twin slogans of ‘democracy’ and ‘the market economy’ provided an ideological flag for the short-lived ‘New World Order’ proclaimed by the Bush regime as it bombed its – and Britain’s – former Iraqi clients into submission. The origins of ‘structural adjustment’ programs go back well before this latter-day enthusiasm for ‘free enterprise’, ‘free trade’ and ‘the market economy’, let alone for a new ‘democratic’ dispensation. Indeed, in some cases the attempts to carry through programs of structural adjustment have engendered opposition to dictatorial regimes and led to their relinquishing power.

In the beginning, the dominant view was that SAPs were inevitable and essentially correct, but created hardships which had to be addressed to increase their acceptability. Thus, the discussion did not extend to a questioning of the macro-economic policies underpinning SAPs. The anti-SAP lobby gained ground as the 1980s – ‘SAP decade’ – came to a close and it became clear that even the macro-economic policies were in dispute.

Since the late-1980s, the view that SAPs are based on wrong assumptions about Africa and are inimical to the continent’s long-term development have gained ground as has the position that SAPs have either created or worsened poverty levels or at the very least, have ignored the adverse effects of the program on the poor. The IFIs and their supporters continue to insist that SAPs are the only way forward and without them, Africa would have been worse off. In between these two positions for and against SAPs, are a range of positions which question the validity of specific policies which make up SAPs and insist on the consideration of macro-economic policies together with policy at other levels including their distributional effects.

The modesty of the macro-economic gains of SAPs has been compared to the programs’ profound socio-economic and political effects, with the lop-sided distribution of limited gains and extensive hardships raising questions of social justice. A number of analysts and activists assert that SAPs have failed in Africa because they have been based on an assumption that a uniform set of principles can yield successful policies for all countries irrespective of their differences. This overlooking of important differences, it is said, has led to policies which ignore the differences between Africa and other continents and the differences within Africa itself.

Reference

Thomson, M., Kentikelenis, A., & Stubbs, T. (2017). Structural adjustment programs adversely affect vulnerable populations: a systematic-narrative review of their effect on child and maternal health. Public health reviews38, 13. https://doi.org/10.1186/s40985-017-0059-2

https://www.globalpolicy.org/component/content/article/218/46625.html

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