VALLEY VIEW UNIVERSITY

FACULTY OF ARTS AND SOCIAL SCIENCES

DEPARTMENT OF DEVELOPMENT STUDIES

GROUP MEMBERS

NAME ID

MENSAH SOLOMON WISE 213DS01000055

KONOR WILLIAMS ENOCH 210DS01005716

KEITA SIRA 213DS02000907

ADOMAKO JASSIE ANDREW 213DS01000068

GINA YAA BENEWAAH 212DS01008594

TOPIC: STRUCTURAL ADJUSTMENT PROGRAME IN GHANA.

COURSE: THEORIES OF DEVELOPMENT AND

UNDERDEVELOPMENT

15TH, APRIL, 2014.

LECTURER: MR SAMUEL ELVIS ADDO

INTRODUCTION

Ghana as a Nation has undergone many economic, social and political stress and turmoil just

after her final liberation from colonial domination in 1957. As a result, the people of Ghana

suffered, and their socio-economic and political plights worsened. Beside this the Nation was

absolutely left with nothing to boast of as its economy was completely ravaged by the unguarded

policies of her leaders. Ghana’s economy then deteriorated and decayed to an unthinkable level

thus giving room for governments (both incumbents and successive) to seek help from anywhere

and not taking into cognizance the dire implications and consequences of those assistance they

are seeking.

This presentation therefore focusses greatly on one of Ghana’s most controversial foreign

assistance during 1983 which was called the structural adjustment program (sap). It was

known in Ghana as the economic recovery program (erp). This term was first introduced into

the Ghana’s economy by General J.A Ankrah under the leadership of the National Liberation

Council (NLC) but was finally implemented by the military Junta Lieutenant J.J Rawlings

upon assuming office in his second military intervention known as the 31st December 1981

revolution with his Provisional National Defense Council regime (PNDC).

However, the high hopes of Kwame Nkrumah (Ghana’s original nationalist leader) and

Ghanaian were dimly shrouded as the economy of this vibrant Nation just after the struggle for

liberation was seen slowly teetering toward bankruptcy; with dried up foreign reserves,

Plummeting GDP and serious national debt among other economic woes.

A devastating phenomenon that struck Ghana from the early 1966 through to the mid-1990s

could best described as catastrophic for Ghana as her first National leader was overthrown in a

bloody coup. Ghana’s economy was in shatters and all attempts made to rebuild and restore

Ghana’s tarnished image proved futile.

The reconstruction of Ghana’s economy was virtually impossible, it rather fell under the

merciless dictates of the two Bretton Woods institutions’ namely- International Monetary

Fund (IMF) and World Bank sponsored Structural Adjustment Programs (SAPs). These

Bretton Woods institutions have touted Ghana as one of the best examples of successful

economic restructuring in Africa. Which however was a misrepresentation of facts about Ghana.

And the ramifications of these so called successful programs have produced dire costs to the

Ghanaian economy.

Our reflections in this presentation will therefore examine the following;

The real definition of the SAP,

Short history of the SAPs, World Bank, & the I.M.F formation,

Requirements of SAP from developing Nations (Ghana inclusive)

Why Ghana opted for the SAP,

Successes and failures of the SAP in Ghana,

And lastly the conclusion that the impact of these Adjustment Programs have not

been totally beneficial to Ghana’s development as is often claimed and pontificated

by the IMF and World Bank.

THE REAL DEFINITION OF THE SAP

Structural adjustment programs refer to the comprehensive economic programs that the major

international lenders such as the two Bretton Woods institutions require of developing countries

when they are granted a loan. It also embraces a set of "free market" economic policy reforms

imposed on the developing Nation’s as a condition for receipt of loans.

SHORT HISTORY OF THE SAPS, WORLD BANK, & THE I.M.F FORMATION

Structural Adjustment Programs- as they are known today, originated due to a series of global

economic disasters during the late 1970s: the oil crisis, debt crisis, multiple economic

depressions, and stagflation (recession, inflation and standstill of economic processes).

These fiscal disasters led policy makers to decide deeper intervention to improve a country's

overall well-being. Historically the International Monetary Fund and the World Bank were

conceived by 44 nations at the Bretton Woods Conference in 1944 with this goal;

Creating a stable economic framework for developing & post-war global economies.

The IMF- was originally envisioned to promote steady growth and full financial balance to

countries, offer unconditional loans to economies in crisis establish mechanisms to stabilize

exchange rates and to facilitate currency exchange.

Much of that vision, however, was never born out. Instead, the IMF took to offering loans based

on strict conditions as a result of compulsion from the U.S representatives and other major

stakeholders such as the so called rich Nations or the G7 Nations. For decades, the IMF and

World Bank have been largely controlled and directed by these so called developed nations such

as the USA, Germany, France, UK, Japan, Britain, and Canada... statistically the so called

G7 Nations hold more than 40% of the votes on the Boards of Directors of these institutions

of which the U.S. alone accounts for almost 20%... (16.45% of the votes at the World Bank,

and over 17% of the votes at the International Monetary Fund.) In addition, the World

Bank is 51% funded by the U.S. Treasury.

NB- Not surprisingly, the World Bank and IMF was directed by the governments of these

world’s richest countries to circumvent its vision to developing a policy that have the tendency

of decimating social safety and worsening labor and environmental standards in developing

countries. A policy ostensibly tailored to gain stronger influence over the economies of debt-

strapped governments in the South. Structural Adjustments Program was the end result of that

idea in the 1980s.

The World Bank -The International Bank for Reconstruction and Development was created to

serve a purpose;

Fund the rebuilding of infrastructure in nations ravaged by World War Two.

Its vision too, however, soon changed in the mid 1950’s.

Over the past two decades, the World Bank and International Monetary Fund (IMF) have

undermined Africa’s health through the policies they have imposed on their economies. The

dependence of poor and highly indebted African countries on World Bank and IMF loans

has given these institutions leverage to control economic policy-making in these countries.

The policies mandated by the World Bank and IMF have forced African governments to

orient their economies towards greater integration in international markets at the expense

of social services and long-term development priorities. They have reduced the role of the

state and cut back government expenditure.

Requirements of SAP from developing Nations

Since borrowing nations are usually in dire straits, they have no choice but to comply with

whatever plans are laid out in order to receive funds to keep their Nation’s functioning. This

means that the IMF and the World Bank can force through policies that the borrowing

government and the people themselves may oppose strongly to which in many ways can

undermine the democratic integrity and the will of the populace.

Some of the requirements usually takes the form of the following;

Extreme free market strategies, monetary austerity, Fiscal austerity, Privatization and

Financial Liberalization - such as;

deregulating banking sectors,

Cutting expenditures (austerity measures),

removing trade barriers,

Privatization or divestiture of all or part of state-owned enterprises- (privatizing

natural resources and government industries),

devaluing currencies against the dollar- (which increase import costs while

reducing the value of domestically produced goods), NB-Devaluation makes their

goods cheaper for foreigners to buy and theoretically makes foreign imports more

expensive),

strictly adhering to balanced budgets,

Enhancing the rights of foreign investors vis-à-vis national laws- (changing

national laws to make an environment more conducive to foreign investment),

building up export economies,

Trade liberalization, (lifting import and export restrictions and high interest rates

to attract foreign investment),

Removal of price controls and state subsidies,

a shift from growing diverse food crops for domestic consumption to specializing in

the production of cash crops or other commodities (like rubber, cotton, coffee,

copper, tin etc.) for export,

abolishing food and agricultural subsidies to reduce government expenditures,

Deep cuts to social programs usually in the areas of health, education and housing

and massive layoffs in the civil service.

Consequently Nations that fail to enact these programs (notably privatization, deregulation and

reduction of trade barriers.) may be subject to severe fiscal disciplines.

NB- Critics argue that the financial threats to poor countries amount to blackmail, and

that poor nations have no choice but to comply.

WHY GHANA OPTED FOR THE SAP.

Preamble to the origin of Ghana’s economic crisis and the SAPs consequent inception and

Implementation;

Explanation of the Origin of Ghana’s Economic Crisis and the consequent implementation of the

SAP in Ghana by the PNDC regime in 1983 stems from the poor approaches used by the

incumbent and successive governments.

As a result, one need also to revisit the statistics in order to fully appreciate the economic decay

Rawlings and the PNDC inherited which paved the way for the SAPs final implementation in

Ghana.

Ghana’s Decision therefore to Implement Structural Adjustment Program (SAP), dates back to

the late 1960s when the N.L.C overthrew Kwame Nkrumah, Ghana’s first president in a

bloodless coup d'état.

1) At independence in March 1957, Ghana’s prospects for developments were bright and

there was general optimism in the international community that an irreversible process of

political, social, and economic development was about to unfold. Ghana was having a

stable economy based on natural resources such as timber, gold and cocoa. There

was relatively high per capita income, Low national debt, and sizeable foreign

currency reserves, the education system was relatively advanced, and? Its people

were heirs to a tradition of parliamentary government...Ghana was the world’s

largest producer of cocoa and endowed with such resources as gold, diamond,

manganese, and bauxite. These apparently ample resources facilitated President

Kwame Nkrumah’s pursuit of a state-led strategy. The result was a centrally planned

economy in which free trade was highly discouraged

Nkrumah’s Seven-year Development Plan after independence stressed the following;

Industrialization through domestic production of import substitutes.

His central planning approach also included state provision of a wide range of

social welfare services such as free education, health care, and housing.

Nkrumah’s socialist-oriented policies were predicated on the continuation of the post-war

increase in the prices of raw materials and agricultural goods, particularly cocoa. However,

Nkrumah’s state-led approach resulted in economic problems such as; overstaffing of state

enterprises, corruption, and incompetence.

Since his focus was on redistributing national prosperity to the masses, the state virtually

became the “father and mother” making it extremely difficult to resist huge public expenditures.

Unfortunately, the price of Cocoa-the major export earner of the economy fell in the early 1960s,

resulting in the Nation’s inability to fund these state-led social policies. As a result, Nkrumah

was toppled in a bloodless military coup on February 24th 1966.

2) The successor government was the National Liberation Council (NLC) under the

leadership of General J. A. Ankrah.

The NLC abandoned all the state led social policies and most of the industries established by

Nkrumah, and immediately became pro-IMF and initiated Ghana’s first negotiation with the

Bretton Woods institutions with standby agreement such as; Trade liberalization, removal of

subsidies, fiscal and monetary discipline and most importantly, devaluation of the Ghana’s

cedi.

The NLC sought to empower the private sector to become the engine of economic growth.

However, recognized professional bodies representing the masses resisted these market-oriented

policies of Ankrah. These pressures forced the NLC to handover to Dr. K. A. Busia’s Second

Republic in 1969.

3) The Second Republic government of Bussia was equally pro-IMF, and occupied itself

with addressing the weaknesses in the private sector as well as reducing inflation. In

other words, Busia’s approach was to use same neo-liberal economic policies of Ankrah

to bring back the economy on track.

Consequently, Bussia’s drew an austerity budget of 1971 and introduced the ff; Taxes on

imports, development levy, withdrew subsidies, liberalized trade, and abolished free

education and transport, it also devalued the cedi by 44%.

NB-The reason why Dr. Bussia implemented IMF austerity measures is because of Ghana’s

weak bargaining position compared with the powerful Western economic institutions.

Again, major segments of the Ghanaian population were discontented and these austerity

measures were cited by the military as reckless and wicked. Resulting in another coup of the

Second Republic on January 13, 1972.

4) The National Redemption Council (NRC/SMC) of Col. I. K. Acheampong and F. W. K.

Akuffo assumed office with a promise to capture the “commanding heights” of the

Ghanaian economy.

Col.I. K Acheampong & F.W.K Akuffo with the NRC sought to rid the Nation of neo-liberal

economic policies and tendencies by restructuring the economy through; Abolishing the

development levy, restoring full benefits to public sector workers, repudiated many of the

country’s external debts and revalued the Nation’s currency by 42%. -The intention of the

NRC was to put the cedi back fairly close to where it was before Busia altered the exchange

rate.

The early years of Acheampong’s rule focused on;

Achieving food sufficiency through Operation Feed Yourself (OFY)-These decisions

won immediate popular support, but eventually worsened the country’s economic

locus.

Notwithstanding the flushing out of the major neo liberal economic tendencies inherited by

Acheampong from the Bussia’s regime and the restructuring strategy employed to heal the

already fragile economy, some Ghanaian observers have contended his regime of;

economic mismanagement,

Corruption, and incompetency

Siphoning of the country’s scarce resources.

And that the foreign exchange realized from the unprecedented increase in world

producer prices of cocoa was largely diverted.

It was in this era of economic uncertainty that saw the first coming of the military junta Flight

Lieutenant Jerry John Rawlings in politics on June 4, 1979.

5) Rawlings and his supporters established the Armed Forces Revolutionary Council

(AFRC) with the intention of cleaning-up the “mess” created by the NRC/SMC. True to

its promise, the AFRC fought; corruption, profiteering (exploitation), and

mismanagement.

To a great extent, the AFRC succeeded in suppressing these vestiges (shadows, tinctures, traces)

of exploitation before acting on its promise to hand power over to a civilian government of Dr.

Hilla Limann in September 1979

6) Dr. Limann’s Third Republic and the PNP, inherited; a collapsing social infrastructure,

shortage of foreign exchange, scarcity of consumer goods, and weak state

institutions.

Mismanagement under the NRC/SMC had resulted in an era in Ghanaian social life where

“destitution and despondency “became the order of the day, and Rawlings’s brief rule had not

changed that situation fundamentally.

Limann and the PNP regime likewise did consider seeking external assistance, including IMF

loans, to resuscitate the economy. However domestic pressure groups such the Association of

Registered Professional Bodies (ARPB), the National Union of Ghana Students (NUGS),

and the Ghana Bar Association (GBA), once again, compelled the government to withdraw

from such negotiation. As usual, these domestic groups were concerned about the negative

impact of IMF prescriptions.

In addition, the military concluded that the PNP was; Incompetent and “dull” and a result

Limann’s third PNP was abruptly ended on December 31, 1981 by another coup led by

Rawlings, which saw the second coming of the military junta.

7) Immediately Rawlings declared a revolution and established the Provisional National

Defense Council. (PNDC)

When the PNDC assumed office in 1981, the country’s economy was in disarray and its

economic position had further weakened as a result of the aggregate mismanagement of the

Nation’s economy since 1966 up till 1981. PNDC was confronted with economic and political

realities.

The PNDC implemented its preferred economic measures during its first year in office even in

the face of dramatic decline of the Nation’s economy. However, these measures failed.

Rawlings’ PNDC, therefore came to a realization that the time to seek external support had

arrived. In the absence of any credible alternative, the PNDC accepted neo-liberal policies.

The PNDC knew that participating in the global economy meant accepting neo-liberal

economic policies, which have the potential of giving the Western business firms control of

Ghana’s economy.

Even though successive governments in Ghana have stressed the need for domestic self-

sufficiency and sought to de-link Ghana’s economy from that of the metropolitan countries.

These efforts, however, have been unsuccessful. As is typical of developing countries, Ghana did

not have the necessary material base to resist neo-liberal policies and neo-colonialism.

Additionally, Ghana was heavily dependent on external sources for its machinery, manufactured

items, petroleum, and other essential commodities and de-linking itself from this external sources

would be a recipe for economic disaster.

Fact must be presented Ghana had no way of dealing with its economic decline. Because

the reliance on the cultivation of cocoa as the only major export earner was insufficient to

shoulder its economic difficulties. And the Nation’s inability therefore to diversify cash

crop production meant that Ghana had no choice, but to follow the dictates of the

prevailing international economy. Indeed, because the economy was deeply linked to the

international capitalist arrangement, there is very little, if any, that any leader could do to

reverse these trends.

In effect, despite the rhetoric of non-alignment in their dealings with the great powers, economic

and political exigencies have compelled the PNDC regime to seek foreign support to undertake

national development programs thus the full implementation of the SAPs in Ghana for the first

time in 1983.

Three major factors that led to the PNDC government’s adoption of the SAP

a) First, the disappearance of rents- that is the gradual inability of the government to pay its

people because of disappearing resources among others. This also increased the threat to

the survival of the PNDC regime.

Available statistics backing these facts indicate that;

Between 1970 and 1983, the Gross Domestic Product (GDP) per capita fell by more

than 2% per annum.

Industrial output also dropped by 4.2% per annum,

While agricultural production dropped by 0.2 % (Bawumia, 1998:50).

Within the same period, the ratio of exports to GDP fell from 21% to 4%

Similarly, the ratio of investment to GDP dropped by 14% to 2%,

real wages reduced by 80%,

With earnings from exports reducing by 50%.

Per capita income equally declined by 30% (World Bank cited in Brydon,

1999:368).

Between 1974 and 1983, Ghana’s currency was devalued only once (from 1.15 to

2.75 cedis to US$1), and this unwillingness to devaluate the currency led to

accumulation of external debt. This is because an overvalued exchange rate made

production for export less profitable for major exports such as cocoa, and gold.

Instead of raising exports to attract foreign exchange.

Ghana had to use its dwindling foreign exchange to import such essential commodities as

spare parts, crude oil, and drugs. No wonder Ghana’s debt in 1982 stood at 105.7% of its

GDP.

b) These poor economic figures were compounded by several internal and external shocks

that hit the country by 1983.

Firstly, between 1978 and 1983, the PNDC regime had to deal with series of bush fires and

severe drought. And this reduced;

The production of major agricultural commodities.

The bush fires destroyed both food and exportable crops such as cocoa.

Ghana was only able to meet two-thirds of its own food requirement,

The government had to import grains on a commercial basis at a time when the

national coffers were running empty.

Because about 65% of Ghanaians depended on farming, mass poverty became

unavoidable.

The drought also compelled the Akosombo Hydroelectric power plant to operate

under capacity.

The failure of Akosombo to provide the needed hydroelectric power reduced

Ghana’s export of energy to neighboring West African states further decreasing its

export earnings

It also led to decrease in industrial production since power supply was rationed.

c) Thirdly, Ghana’s precarious economic situation was worsened in January 1983 by the

Nigerian government’s decision to deport about 1 ½ millions of Ghanaians residing in

Nigeria. These deportees were part of the over two million Ghanaians who traveled to

Nigeria in the early 1970’s to take advantage of the oil boom. (Boafo-Arthur, 1999b: 47).

President Shehu Shagari who was facing elections later in 1983 deported undocumented

aliens as a way of reducing unemployment and invigorating Nigeria’s economy. There was

no doubt that the deportees from Nigeria worsened Ghana’s food situation as well as

adding to the pressure on the collapsing social infrastructure.

SUCCESSES AND FAILURES OF THE SAP IN GHANA.

Successes; Despite the fact that the ERP brought some costs to Ghanaians, it also chalked some

successes. Below are the important successes chalked under the Economic Recovery Program?

First, the ERP had a good impact on macroeconomic indicators. -There was an

increase in national income by 10.34% in 1984 and a decrease in the inflation rate

from 123% to 39.5% in 1983.

Secondly, export volumes also increased by 2% in 1984 compared with the decline

of 27.8% in 1983.

Third, the investment rate in the country increased by 50% between 1984 and 1985,

and increased by 30% between 1986 and 1987.

Fourth, the total national output expanded in 1984 for the first time in four years,

and GDP growth was 8.6% in 1984. GDP growth continued at 5% for the next three

years, 1985, 1986, and 1987.

Fifth, the ERP brought significant flows of aid into Ghana, and along with the

devaluation of the cedi, contributed to the increase in the value of cocoa exports,

which doubled between 1983 and 1986. Government revenues and the incomes of

cocoa farmers also increased.

Sixth and finally, the increase in exports and imports led to a rapid expansion in

domestic transportation, retailing, and wholesaling. Imports and exports as a share

of GDP together doubled from 18% in 1984 to 37% in 1992 (Gyekye-Jandoh 2006).

NB-However, those who benefited the most from the ERP were big local and foreign

capitalists or businessmen who were engaged in gold mining and timber industries, and

rural, cash crop and cocoa farmers, who benefited from the devaluations and producer

price increases.

Ghana received official aid, long-term loans, and private transfers constituting 9% of GDP. It

also received about $4 billion in concessional loans and grants between 1983 and 1991.

Failures

First, there were grave inequities in the distribution of the benefits of economic

growth. Students and urban workers went on strike in the 1980s, and nurses went

on strike in 1986 regarding wages, but the PNDC government cracked down on

these shows of agitation.

Second, another cost of the implementation of the ERP in Ghana in the 1980s was

that real wages remained low and income growth was slow, while the level of

poverty was high. Between 1987 and 1988, 36% of Ghanaians lived below the

poverty line. In the years 1987-1990, poverty levels worsened.

Third, urban unemployment rose due to PNDC retrenchment policies and

withdrawal of subsidies from public services. Many public service workers were laid

off, and the cost of living rose as subsidies on health and education were withdrawn.

Between 1987 and 1988, the civil service lost 24,000 people, and 12,000 more civil

servants were to be let go in 1989, a big blow to the Civil Servants Association

(Nugent 1996: 184). The cost recovery policy on health, education, and public utility

services led to a decline in real wages. By 1993, unemployment had risen to 13%.

Over the remaining years of the decade, the Trades Union Congress (TUC) leadership

consistently opposed the withdrawal of public subsidies, particularly on petroleum, and was

always at odds with the PNDC over the daily minimum wage, which Bank/IMF SAP policies

sought to keep down (Nugent 1996: 148).

These major woes brought by the implementation of the SAPs led to the PNDC’s creation

of another intervening program called the Program of Action to Mitigate Social Costs of

Adjustment in 1988. (The PAMSCAD).

The PAMSCAD was a US$85 million fund donated by external donors to help those who

suffered due to the strict implementation of the SAP.PAMSCAD was set into motion and sought

to create 40,000 jobs over a two-year period. It was aimed at;

the poorest individuals,

small-scale miners and artisans in particular,

And communities were to be helped to implement labor intensive self-help projects.

The PAMSCAD tried however but failed to bring a human face to the effects of the adjustment

policies in Ghana.

CONCLUSION

Firstly, the World Bank and the IMF argue that SAPs are necessary to bring a developing

country from crisis to economic recovery and growth. Economic growth driven 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 throughout the economy and eventually

to the poor. These neo liberal policies of imposing; Harsh economic measures which deepen

poverty, undermine food security, and self-reliance and, lead to unsustainable resource

exploitation, environmental destruction, and Population dislocation and displacement can

never be said to bridge the gap between the poor and the rich in both local and global

terms.

Secondly, SAPs call for increased exports to generate foreign exchange to service debt. As a

result, most important exports of developing countries like; Timber, oil and natural gas,

minerals, cash crops, and fisheries exports have been destroyed all in the name of defraying

debts

Thirdly, the acceleration of resource extraction and commodity production that results as

countries increase exports is not ecologically sustainable.

Fourthly, deforestation, land degradation, desertification, soil erosion and salinization,

biodiversity loss, increased production of greenhouse gases, and air and water pollution are but

among the long-term environmental impacts that can be traced to the imposition of SAPs.

Fifthly, many developing nations are in debt and poverty partly due to the policies of these two

Bretton Woods Institutions. This is because SAPs are based on a narrow economic model that

perpetuates poverty, inequality, and environmental degradation.

Finally, a program which;

over-emphasize the restoration of balance of payments instead of adopting a more

just and equitable approach to resolving the debt crisis;

undermine the state's sovereignty and limit its role for socio-economic intervention

through deregulation, privatization and dismantling of the state in the name of "free

markets"

exacerbate the disparities between rich and poor by facilitating income

concentration by the wealthy and the exclusion of the poor from decisions and

control over resources;

Undermine democracies and democratic process by imposing non-democratic

economic programs even if they conflict with government policy and the will of the

people thereby resulting in bankruptcy;

lack transparency, accountability and public participation in their design and

implementation;

Hurt the poor disproportionately through deep cutbacks in social programs. User

fees, privatization, massive layoffs and retrenchment of social services which have

led to malnutrition, school and hospital closures, recurrence of previously

eradicated disease, and deepening poverty;

undermine national food security

make many basic necessities inaccessible to local people as currency devaluations

drastically reduce the buying power of local wages;

Violate the UN Convention on the Rights of the Child, the UN Declaration on the

Right to Development- According to UNICEF, over 500,000 children under the age

of five died each year in Africa and Latin America in the late 1980s as a direct result

of the debt crisis and its management under the International Monetary Fund’s

structural adjustment programs.

These programs required the abolition of price supports on essential food-stuffs, steep

reductions in spending on health, education, and other social services, and increases in taxes. The

debt crisis has never been resolved for much of sub-Saharan Africa. Extrapolating from the

UNICEF data, as many as 5,000,000 children and vulnerable adults may have lost their lives

in this blighted continent as a result of the debt crunch.

These programs cannot be said to be an intervention to a Nation’s already sickening economy

but rather a thorn in the flesh of the Nation’s progress. However, in a more cynical or harsher

description, structural adjustments and other trade related policies could also be seen as a

“weapon of mass destruction” as Raj Patel hints, (commenting on the Doha WTO conference

in November, 2001.)

NB- A fertilizer bombs that kills 100 in Oklahoma and Fuel-laden civil jets that kill 4000 in

New York cannot be compared to a sanction policy that kills 1 and a half million in Iraq

and a trade policy that bleeds continents to death.

You can make a bomb out of anything but the ones on paper hurt the most.

However, we have seen that the achievement of the social well-being of our people is

not an integral component of SAPs as claimed by the two Bretton Woods

institutions, but a hoped-for result of applying free market principles to the

economy. A process of adjustment, as described by many World Bank and IMF

officials to developing countries, is one of a "sacrifice," of one’s "present pain for

future hope." SAPs are based on a narrow economic model that perpetuates

poverty, inequality, and environmental degradation.

BIBLIOGRAPHY/REFERENCES

Susan George, A Fate Worse Than Debt, (New York: Grove Weidenfeld, 1990), pp. 143,

187, 235

The U.S. uses its dominant role in the global economy and in the IFIs [International

Financial Institutions] to impose SAPs on developing countries and open up their markets

to competition from U.S. companies.

Carol Welch, Structural Adjustment Programs & Poverty Reduction Strategy, Foreign

Policy in Focus, Vol 5, Number 14, April 2000

Raj Patel, They also make bombs out of paper, ZNet, November 28, 2001

Ross P. Buckley, The Rich Borrow and the Poor Repay: The Fatal Flaw in International

Finance, World Policy Journal, Volume XIX—

Carol Welch, Structural Adjustment Programs & Poverty Reduction Strategy, Foreign

Policy in Focus, Vol 5, Number 14, April 200, No 4, Winter 2002/03 (Emphasis Added)

Joseph Stiglitz, What I learned at the world economic crisis. The Insider, the New

Republic, April 17, 2000

(John F. Henning Center for International Labor Relations, Institute for Industrial

Relations, University of California, Berkeley) (http://ghanaian-

chronicle.com/features/fighting-poverty-and-enhancing-rural-development/).

Posted by U.G POLITICAL SCIENCE DEPARTMENT at 00:48

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The World Bank, March 2000.The Lost Decades: Developing Countries’ Stagnation in

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