THE STRUCTURAL ADJUSTMENT POLICIES

The structural adjustment policies of the World Bank and IMF violate the principle of state sovereignty

The structural adjustment policies of the World Bank and IMF violate the principle of state sovereignty

Structural adjustment is the name granted to a set of "free market" financial principle reforms imposed on evolving countries by the Bretton Woods institutions (the World Bank and International Monetary Fund (IMF)) as a status for acknowledgement of loans. SAPs were evolved in the early 1980s as a means of gaining stronger leverage over the economies of debt-strapped governments in the South. To ensure a proceeded inflow of funds, countries already devastated by liability obligations have little alternative but to adhere to conditions mandated by the IMF and World Bank.(Kearney,2005)

The World Bank and the IMF argue that SAPs are necessary to convey an evolving homeland from crisis to financial recovery and growth. Economic development propelled by private sector foreign investment is seen as the key to development. These agencies argue that the resulting national wealth will eventually "trickle down" or spread all through the finances and eventually to the poor. The achievement of social well-being is not an integral constituent of SAPs but a hoped-for result of applying free market principles to the economy. The process of adjustment, as described by many World Bank and IMF officials to evolving countries, is one of "sacrifice," of "present pain for future hope."

Many groups argue that SAPs impose harsh financial measures which make deeper scarcity, destabilise nourishment security, and self-reliance and lead to unsustainable resource exploitation, environmental destruction, and population dislocation and displacement. These groups, which encompass non-governmental organizations (NGOs), grassroots organizations, economists, social scientists and United Nations agencies, have turned down the narrow beginning of financial development as the means to achieve social and environmental objectives. They accept as factual SAP policies have increased the gap between wealthy and poor in both local and global terms.

Despite claims to the contrary, World Bank-imposed SAPs have paid little or no attention to their environmental impact. SAPs call for increased exports to generate foreign exchange to service debt.(Benería, 1995) The most important exports of evolving countries encompass timber, oil and natural gas, minerals, cash crops, and fisheries exports. The acceleration of resource extraction and product output that results as countries increase exports is not ecologically sustainable. Deforestation, land degradation, desertification, soil erosion and salinization, biodiversity loss, increased output of greenhouse ...