General Flashcards
What is structural adjustment?
When World Bank or IMF implement policies in 3rd word are conditions for obtaining loans, or lower interest rates on existing loans.
What are some of the conditions of structural adjustment? (aka the Washington Consensus)
- Cutting expenditures (austerity)
- Focusing economic output on direct export and resource extraction.
- Devaluation of currencies
- Trade liberalisation (lifting restrictions on imports/exports)
- Increasing the stability of investment (supplementing FDI with opening of domestic stock markets)
- Balancing budgets and not overspending
- Removing Price controls & state subsidies
- Privatisation or divestiture of all or part of state-owned enterprises
- Enhancing rights of foreign investors vis-a-vis international laws
- Improving governance and fighting corruption
How do structural adjustment programmes (SAP) affect S.African nations in regards to their national sovereignty?
- outside organisation dictating nation’s economic policy
- some argue: economic policies are in nation’s best interests however others argue that nations will favour political gain over economic gain.
- decisions about africa made mile away in western nations
What happened in Mozambique when an SAP was initiated by the IMF
(Pfeiffer, James. 2003.International NGOs and primary health care in Mozambique:)
Currency was devalued,gov services cut, princes increased, health system deterIORated. SAP called for curb in spending etc.
-counter argument: currency devalued -> increase in exports, decrease in imports as prices of domestic goods are cheaper than imports. A side effect of this is a price increase of imports which is viewed as higher inflation
(Pfeiffer, James. 2003.International NGOs and primary health care in Mozambique)
How do structural adjustment programmes (SAP) affect S.African nations in regards to their privatisation?
(McPake, Barbara. 2009. Hospital Policy in Sub-Saharan Africa and Post-Colonial Development Impasse.)
Ostensibly this policy aims to increas efficiency and investment and reduce state expenditure.
- this replaces goal of “public welfare” with “private accumulation”
- privatisation = commodification of water and health
- welfare of borrowing nation not catered for, but the TNC elite is.
(McPake, 2009. Hospital Policy in Sub-Saharan Africa and Post-Colonial Development Impasse.)
How do (SAP) affect S.African nations’ education and health care in regards to their privatisation?
(Feo, 2008. Neoliberal Policies and their Impact on Public Health Education)
Negative as poor people can’t access health services or education. These people are unproductive and as a result nation cannot move forward
(Feo, 2008. Neoliberal Policies and their Impact on Public Health Education)
How do (SAP) affect S.African nations’ their agriculture?
Disengagement of gov from irrigation development and management.
- also focuses on increased use of fertilisers and pesticides, which damage local fish etc.
Give an example of SAPs negatively affecting agriculture? Tiemen and Koeing reveal, Western Mali during the 1980s
(Koeing and Tiemen 1998. The environmental effects of policy change in the west African Savannah)
Tiemen and Koeing reveal, Western Mali during the 1980s
- privatisation of agricultural sector caused inequality of food distribution and wealth as some farmers adapted and some didn’t.
- instead of mining land (using plot, moving on to next to allow the used one to replenish) farmers used fertilizers that left land nutrients barren and unstable
- increased exports may not compensate for the loss of purchasing power of a cheaper currency (Kleptocracy by government)
(Koeing and Tiemen 1998. The environmental effects of policy change in the west African Savannah)
Give an example of SAPs negatively affecting environment.
Less regulation in developing countries. Some argue that 1st world also damaged environment so why deprive the 3rd of the development benefits? Others say the world cannot handle this. SAP encourages environmental damage and laws are viewed
- can lead to deforestation or desertification
Give an example of SAPs and austerity pt1
- austerity measures are implemented to balance the budget (make sure the Balance of payments (BOP) are balanced)
- this can lead to a cut in social programs (gets rid of social safety nets)
Give an example of SAPs and austerity pt2
2009, a book by Rick Rowden titled The Deadly Ideas of Neoliberalism: How the IMF has Undermined Public Health and the Fight Against AIDS, claimed that the IMF’s monetarist approach towards prioritizing price stability (low inflation) and fiscal restraint (low budget deficits) was unnecessarily restrictive and has prevented developing countries from being able to scale up long-term public investment as a percent of GDP in the underlying public health infrastructure.
The book claimed the consequences have been chronically underfunded public health systems, leading to dilapidated health infrastructure, inadequate numbers of health personnel, and demoralizing working conditions that have fueled the “push factors” driving the brain drain of nurses migrating from poor countries to rich ones, all of which has undermined public health systems and the fight against HIV/AIDS in developing countries. (note counter arguemt: this funding could be use in efficiently - corruption etc)
Relationship between SAPs and public health? Negative example?
Recent studies have shown strong connections between SAPs with Tuberculosis rates in developing nations - over 20 correlations (Stuckler, 2009) Instead, they found that the increase in tuberculosis mortality followed the lending; each 1 percent increase in credit was associated with a 0.9 percent increase in mortality. And when a country left an I.M.F. loan program, mortality rates dropped by an average of 31 percent.
This is disputed by william murray of IMF saying TB takes a long time to develop across the population, and was before IMF funding
Loganand and Mengisteab 1993- IMF-World Bank Adjustment and Structural Transformation on Sub-Saharan Africa
Discordant links between unformal (traditional/rural) and formal sector (modern/urban) of the economy
Many traditional societs are kin-based, and operate familial relations, so if there’s aren’t considered, this can cause differing power relations at differing geographical scales
(Involuntary resettlement can cause problems)