Structural adjustment
From Biocrawler, the free encyclopedia.
Structural adjustment is a term used by the International Monetary Fund (IMF) for the changes it recommends for developing countries. This includes internal changes (notably privatization and deregulation) as well as external ones, especially the reduction of barriers to trade.
The term "structural adjustment" has been somewhat replaced since the late 1990s by an emphasis on "poverty reduction", with developing countries encouraged to draw up Poverty Reduction Strategy Papers (PRSPs); the content of these is often quite similar to Structural Adjustment Programs.
Conditions
Structural Adjustment Programs (SAP) are loans from the IMF given to a nation with certain conditions. Nations are demanded to follow these conditions for approval of the loan. These conditions are technically known as "conditionalities".
Some of the conditions commonly are:
- Cutting social expenditures,
- Devaluing currencies against the dollar,
- Lifting import and export restrictions,
- Balancing budgets and not overspending,
- Removing price controls and state subsidies
SAPs have the effect of commercializing the soveriegnty of national economies. Lowered wages cause local purchasing power to be reduced, privatization of public enterprises reduces state capacity and export expansion often displaces local production systems.
Further reading
- SAPRIN, Structural Adjustment: The SAPRI Report, Zed Books 2004
External links
- International Monetary Fund (http://www.imf.org)
- Structural Adjustment Participatory Review International Network (http://www.saprin.org)
- Bretton Woods Project (http://www.brettonwoodsproject.org)
