Structural Adjustment

1
Structural Adjustment

• Refers to process by which many developing
  nations are reshaping their economies to be more
  free market oriented. Assumes that an economy
  will be more efficient, healthy productive if
  market forces are not protected, subsidized,
  regulated or produced by the government (Sparr
  1994).

2
IMF WORLD BANK

• World Bank longer term structural adjustment
• IMF quick relief. Stabilization loans
  (austerity measures)
• Inflation, budget deficit balance of payment
  problems
• Expected to reduce domestic demand to level the
  country can afford.

3
Goals of SAPs

• Get prices right, e.g. remove ceiling on
  interest rates
• Minimize government involvement in the economy.
  Governments encouraged to sell to private
  enterprise
• Create a more open economy. Trade investment
  laws are altered.

4
Conditionality of SAPs

• Currency devaluation. Imports more expensive
• Slash budget deficit cut subsidies on goods
  services, lay offs
• Raise or remove ceilings on interest rates
• Abolish price controls, impose wage restrictions
  or temporary import restrictions.

5
Impact

• Employment Free market oriented.
• Creation of freezones (poor working conditions
  etc.) Rural to urban migration
• Job cuts
• Triple burden for women
• Traditional areas of womens work further
  devalued/marginalized.

6
Impact cont.

• Health, Education Other Social Services
• Cutbacks in health budget. Decline in health
  status of population
• Increase in food prices elimination of food
  subsidies. Reduction in spending power
• Cuts in educational services. Increase in
  illiteracy rates.

7
Impact cont.

• Women and men are affected differently by SAPs
  b/c they are not politically, economically or
  socially equal
• Women are affected to a greater extent especially
  b/c
• Globally, they are the poorest of the poor
• While they are producers, they are also the
  nurturers caregivers for the sick, elderly
  children, etc. (their families)
• They are regarded as supplementary wage earners
  unskilled labourers.