The growth that does occur is commonly limited to a few sectors like raw materials extraction or goods produced with cheap labor, instead of a more well-rounded and sustainable growth in production. But what does ‘successful’ mean? Economic Structural Adjustment Programs (ESAP), Paper 5 Zimbabwe History Advanced level. Likewise their late concern for good governance only surfaces after successive SAPs have already dismantled many important state institutions and continue to undermine the ability of governments to exercise control over national economic development. The U.S. should push for transparency in the lending operations of the IFIs. The policies are designed to tackle the root cause of the problem and provide a framework for long term development and long term growth. Structural adjustment is a term used to describe the policies requested by the IMF in condition for financial aid when dealing with an economic crisis in. A narrow elite in countries undergoing SAPs do benefit from restructuring and increased integration, but the main beneficiaries are foreign investors and traders. How do you establish it and measure it? At the World Bank, new leadership installed by the U.S. (which traditionally appoints the president of the World Bank) touted SAPs as comprehensive, long-term solutions for debtor nations. In agriculture, SAPs augment the economic liberalization resulting from free trade agreements, undermining peasant agriculture while reinforcing export-oriented agribusiness (and its dependence on dangerous agrochemicals). In Africa, the International Monetary Fund (IMF) and the World Bank do not have a good reputation. The bank from which a borrowing country receives its loan depends upon the type of necessity. Though macroeconomic factors need not be excluded from Washington’s policies, they should be part of a broader definition of U.S. national interests overseas and should encompass more than simply facilitating U.S. trade and investment. Der Globalisierungskritiker Michel Chossudovsky bilanziert „Die Weltbank ist in vielen Ministerien der kreditnehmenden Länder präsent. Title: 2015 World Bank Group / International Monetary Fund Spring Meetings. The U.S. plays a fundamental role in designing and financing structural adjustment programs of the main IFIs, namely the World Bank and the International Monetary Fund (IMF), as well as those of the regional multilateral banks such as the Inter-American Development Bank (IDB). Immediate debt relief for impoverished countries should be a priority for the U.S. and the IFIs. The most recent change in SAPs is the IFIs’ promotion of good governance. In addition, U.S. trade representatives began to insist on changes in other nations’ economic policies to facilitate increased U.S. trade and investment. Even when a SAP-directed economy is growing, it is generally failing to create employment and generate the revenues needed to pay for the unregulated influx of foreign imports. Kritisiert werden die Strukturanpassungsprogramme auch von dem US-amerikanischen Wirtschaftswissenschaftler und Nobelpreisträger Joseph E. Stiglitz. In order to improve the terms of the current loan or to get a new one, the country in … In seinem Buch Die Schatten der Globalisierung betont er, dass das Vorgehen des IWF für die Entwicklung der Länder des Südens nicht förderlich, sondern sogar schädlich (gewesen) sei. The Structural Adjustment Programs (SAPs) are created with the goal of reducing the borrowing country’s fiscal imbalances. Structural Adjustment Programmes (SAPs) are economic policies for developing countries that have been promoted by the World Bank and International Monetary Fund (IMF) since the early 1980s by the provision of loans conditional on the adoption of such policies. To mitigate the harsh social impact of SAP-mandated economic restructuring and austerity measures, the IFIs have sponsored social investment funds. Diese Seite wurde zuletzt am 25. The result can be increasing political instability (such as riots over food prices), outbreaks of guerrilla violence, and widespread disaffection with (and nonparticipation in) electoral political systems. The debt crisis, which reached crisis proportions by 1982, gave the IFIs the leverage needed to impose SAPs on the debt-ridden countries of the South. SAPs have also largely succeeded inshrinking government budget deficits, eliminating hyperinflation, and maintaining debt-payment schedules. The lender services the loan based on the assumption that certain fiscal policies will take place within the borrow- country. Political conditionality was used to link adherence to the programs with the successful receipt of development finance and loans. Largely championed by the Reagan administration and Margaret Thatcher’s government in Britain, the neoliberal principles that shape SAPs gained prominence in the IFIs in the 1980s. The most important change the U.S. could initiate is to make binational and multinational financial agreements a more inclusive and open process. But SAPs are driven more by neoliberal ideological principles than by objective evaluations of a country’s specific economic problems and potential. Layoffs of government workers, wage constraints, higher interest rates, reduced government spending, and the shutdown of domestic industries all contribute to the shrinking of the domestic market. Structural Adjustment Programs (SAPs) according to leftwitch (1996) is defined as a set of institutional and economic measures intended to solve the macroeconomic problems facing developing countries by correcting a country’s borrowing deficit, reducing the intervention of governments in the economy and opening up the state’s economy to the world market. Therefore, the conventional structural-adjustment programmes emphasised liberalisation, deregulation and privatisation. The liberalization of trade does make imported items less expensive, but most people in low-income countries consume little besides basic necessities. SAPs are based on a short-term, profit-maximization model that perpetuates poverty, inequality, and environmental degradation. What are Structural Adjustment Programmes (SAPs)? " The leading role of the IMF has proven problematic in many ways. Structural adjustments … Strukturanpassungsprogramm (SAP, englisch: Structural Adjustment Program, von der Enhanced Structural Adjustment Facility – deshalb auch ESAF-Program) bezeichnet wirtschaftliche Maßnahmen in Ländern der Dritten Welt, die vom Internationalen Währungsfonds (IWF) und der Weltbank als Bedingung für die Vergabe von Krediten oder den Schuldenerlass im Rahmen der HIPC-Initiative verlangt werden. Through its aid and trade policies, Washington has worked to restructure the economic policies of the Southern nations. Diese Wegbereiter zur von Weltbank, WHO und IWF verlangten Good Governance nötigten bittstellenden Staaten nicht selten einige ihrer Souveränitätsrechte ab. These changes brought economic incentives more into line with the country's underlying comparative advantage. The country in need (the borrower) approaches the IMF and World Bank (the lenders) for a loan. In this latter regard, SAPs have been successful. The U.S. should carefully examine what IMF Managing Director Michel Camdessus terms “the second generation of structural reform,” which includes further neoliberal macroeconomic reforms along with good governance conditionality and measures to provide temporary relief to those impacted by SAPs. SAPs benefit a narrow stratum of the private sector—mostly those involved in export production, trade brokering, and portfolio finance. The U.S. leverages its dominant role in the global economy and in the IFIs to impose SAPs on developing countries and open their markets to competition from U.S. companies. Virtually all developing countries—particularly in Latin America and Africa, and increasingly in the transition countries of east and central Europe—have implemented or are in the process of acceding to SAPs. STRUCTURAL ADJUSTMENT PROGRAMME IN TANZANIA Tanzania got her independence in 1961 at that time it was under the leadership of Julius K. Nyerere, Tanzania adopted and practiced socialism even though, the country was a multi-ethnic society, all the groups were united by the language of Kiswahili introduces by Nyerere. Jason Oringer, Carol Welch, The U.S. should also encourage a major role for affected governments in crafting the terms of agreements, rather than their being regarded as the passive recipients of SAPs. Content under a Creative Commons Attribution licence, by Carol Welch, Friends of the Earth, and Jason Oringer, It managed seven structural adjustment programs—covering the automotive industry, Arrium, Alinta, BlueScope Steel, Caterpillar, Queensland Nickel After decades of subverting populist and interventionist central governments, the IFIs have recently accepted some of the criticisms leveled against their neoliberal notions of a minimalist state. Structural adjustment programs were sponsored by the Bretton Woods Institutions (BWIs) and ubiquitously included capital account and trade openness, devaluation, a reduction in the public sector and privatization of publicly owned companies. Structural adjustment programs (SAPs) consist of loans provided by the International Monetary Fund (IMF) and the World Bank (WB) to countries that experience extensive economic crises. But while government balance sheets may improve, SAPs have failed to establish a base for sustainable, balanced economic development. If economic standards and the adoption of economic policies are conditioned to financial assistance, they should not be stricter than those that the U.S. and other donor nations find acceptable for themselves, and they should be mutually agreed upon by both the U.S. and the borrowing country. SAPs are broadly imposed on nearly all developing countries, while the North only selectively adheres to its own neoliberal principles. Sometimes SAPs are imposed despite overt opposition. Page 4) notes that a UN survey of 12 African structural adjustment programmes (SAPs) found little improvement in export earnings following such devaluation and that, since the demand for most of Africa's exports are inelastic - price fluctuations change demand very little devaluation of African currencies has led to steep declines in export revenues. IMF Lending to Poor Countries—How does the PRGF differ from the ESAF? Many people consider them agencies of misery, poverty and social distress. The economic policies dictated by the IFIs and Washington have greatly facilitated the process of global economic integration. The neoliberal philosophy of economic development revived the old precepts of economic liberalism, which hold that an unregulated free market and private sector are the engines for unrestricted growth, the benefits of which will trickle down from the owners of capital to the entire population. reallocation of resources between sectors, changes in the distribution of income and institutional reform. Eine Studie des Entwicklungsökonomen William Easterly konnte keinen positiven Effekt von Strukturanpassungsprogrammen auf Wirtschaftswachstum finden.[2]. Diese Maßnahmen sind für jedes Land einzeln zugeschnitten, jedoch weisen die meisten folgende Merkmale auf: Haushaltsdisziplin, Subventionsabbau, Deregulierung, kompetitive Wechselkurse, Abbau von Devisenverkehrsbeschränkungen, Privatisierung von Staatsbetrieben. The insistence by SAPs on the deregulation of laws and the downsizing of enforcement agencies further obstructs a government’s capacity to protect its environment. They generally entail severe reductions in government spending and employment, higher interest rates, currency devaluation, lower real wages, sale of government enterprises, reduced tariffs, and liberalization of foreign investment regulations. ‘Structural Adjustment’ or simply ‘adjustment’, emphasises the fact that in some instances successful stabilization requires structural changes in the domestic economy, e.g. Although governance stipulations (such as increased budgetary transparency and judicial reform) may be positive changes, they place an added burden on countries and increase the power of Washington and the IFIs to dictate policy in the South. Loan conditions and program documents should be publicly available so that all parties are informed and accountable. The implementation of the SAPs, it is claimed, has arrested Ghana's economy from complete collapse, resulted in consistent growth in GDP averaging 6% over the past decade, reduced inflation levels, created budget surplus, and increased export earnings. Summary. Die dort durchgeführten Reformen in Gesundheit, Bildung, Industrie, Landwirtschaft, Verkehr, Umwelt usw. Um einen Schuldenerlass zu erhalten, müssen die Länder nun so genannte Armutsbekämpfungs- und Wachstumsprogramme durchführen (Poverty Reduction and Growth Facility, PRGF). SAPs usually include several basic components geared toward reducing inflation, promoting exports, meeting debt-payment schedules, and decreasing budget deficits. Strukturanpassungsprogramm (SAP, englisch: Structural Adjustment Program, von der Enhanced Structural Adjustment Facility – deshalb auch ESAF-Program) bezeichnet wirtschaftliche Maßnahmen in Ländern der Dritten Welt, die vom Internationalen Währungsfonds (IWF) und der Weltbank als Bedingung für die Vergabe von Krediten oder den Schuldenerlass im Rahmen der HIPC-Initiative verlangt werden. Following an ideology known as neoliberalism, and spearheaded by these and other institutions known as the Washington Consensus (for being based in Washington D.C.), Structural Adjustment Policies (SAPs) have been imposed to ensure debt repayment and economic restructuring. In addition, both Washington and the IFIs consistently fail to broaden the scope of SAPs to consider poverty, unemployment, the health of the domestic market, the impact of development patterns on the environment, and a government’s capacity to ensure that the benefits of economic development are equitably distributed. For example, a structural adjustment loan may include a stipulation that the borrowing country relax any protectionist subsidies or impose higher taxes to balance the budget. Structural Adjustment Policies: Main Features and Social Implications The SAPs designed by the Bretton woods institution, the World Bank and the International Monetary Fund and later embraced by other major international fin… As SAPs guide how money is spent, they are supposed to ensure good use of development funds. In its insistence on the promotion of the private sector, Washington fails to recognize the fundamental importance of government regulations and safety nets in fostering and maintaining economic development. Citizen participation in all stages of IFI lending—from planning and defining the scope of projects to implementation and evaluation—should be standard. Thus, reforms intended to open countries to foreign trade, investment, and finance may result in increased exports and greater access to foreign capital, but they also heighten financial volatility and speculative investment, flood the affected countries with imported luxury goods, undermine local industry, and constrict local buying power. Washington’s foreign policy should encourage sustainable, equitable development that benefits local people rather than international traders and financiers. The underlying structural reasons for poverty, unemployment, and malnourishment are left unaddressed. Yet in many cases the GDP growth of countries undergoing structural adjustment is stagnant. Conditions and terms of all lending should be stated publicly so that the recipient country’s citizenry is fully aware of the potential impact of lending agreements. liegen in ihrer Zuständigkeit.“[1]. By Yet SAPs are largely imposed on developing countries without sufficient input from the very sectors of society that will be subjected to them. Cit. To what extent did the Economic Structural Programme (ESAP) achieved its objectives in Zimbabwe by the mid 1990s. Starting in the 1980s, the U.S. also routinely began conditioning its aid agreements on acceptance of a package of economic reforms and adherence to the prescriptions of the World Bank and IMF. Structural adjustment " is the name given to a set of "free market" economic policy reforms imposed on developing countries by the Bretton Woods institutions (the World Bank and International Monetary Fund (IMF)) as a condition for receipt of loans. Throughout the 1980s and 1990s the U.S. has been a principal force in imposing Structural Adjustment Programs (SAPs) on most countries of the South. These winners are usually well-connected elites and transnational companies. The goal of such a program is to help the borrowing nation pay off its debts and have a growing economy that will sustain them into the future. This new programming—called neostructuralism by some analysts—reduces the social and political impact of SAPs through temporary job programs and other relief measures. Tightened credit requirements and higher interest rates make it virtually impossible for small farmers and businesses to invest. The IMF and World Bank are expanding their loan conditions (and hence their power) to include reforms in tax, budgetary, and judicial system transparency, along with the traditional economic policies. Since the 1980s several countries in Africa, Latin America, Asia and Eastern Europe have adopted structural adjustment programmes (SAPs) – loans given by the World Bank (WB) and the International Monetary Fund (IMF) – to overcome their economic and debt crisis. ESAP is a top-down economic strategy which is designed to resuscitate an economy using massive doses of foreign exchange (acquired mostly through loans) and hugely increased … With the waning of North-South private capital flows, indebted countries became increasingly dependent on the IFIs, which conditioned new lending on the implementation of SAPs. Increased unemployment and decreased government services are the most direct blows, but changes in the tax system often emphasize easy-to-collect, regressive sales taxes that also disproportionately affect the lower classes. Through its financial clout in the IFIs, its central role in shaping global economic integration, and its own bilateral lending programs, Washington has the power to change or eliminate SAPs. To assist African development, Structural Adjustment Programmes (SAPs) provided “conditional lending” (Thomson, 2010: 197) – conditional, in that governments receiving debt relief were obliged to adjust their economic policy.In general, ‘adjustment’ meant liberalising and privatising, although SAPs were wider in scope in that their developmental aims were highly political. SAPs may achieve nominal GDP growth, but it is growth based on unsustainable resource extraction and the exploitation of cheap labor. Structural Adjustment Programs have been adopted by Kenya since the late 1980s along IMF-WB lines in order to solve the problems of growing foreign debt, fiscal and balance of payments (BOP) deficits, shortage of foreign exchange, stagnant productive sectors (especially the export-oriented sectors), and rising levels of unemployment. SAPs share a common objective: to move countries away from self-directed models of national development that focus on the domestic market and toward outward-looking development models that stress the importance of complete integration into the dominant global structures of trade, finance, and production. Though reduction of world poverty is proclaimed as a major goal of U.S. and multilateral lenders, SAP policies hit poor people hardest. The objective of social investment funds is to provide temporary relief and stave off political unrest until the benefits of neoliberal reform start trickling down. The World Bank recently launched a historic initiative to encourage such participation, working with civil society groups in several countries to assess the impact of SAPs (see SAPRI under Sources for More Information). These claims are made sometimes more stridently, sometimes more cautiously and with qualifications. Since 1983, Ghana has been undergoing World Bank and International Monetary Fund (IMF) sponsored Structural Adjustment Programs (SAPs). SAPs often succeed in achieving specific objectives such as privatizing state enterprises, reducing inflation, and decreasing budget deficits. The longer term Structural Adjustment Programme is aimed at the promotion of production and resource mobilisation through the promotion of commodity exports, public sector reform, market liberalisation and institutional reform. The emphasis placed by SAPs on increased exports can hasten the destruction of ecosystems by accelerating extractive enterprises such as the timber, mining, and fishing industries. Structural Adjustment Programs typically include a lot of different policies which interact with each other. 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