EmilyVierling

YesRobinHood,ThereisStillaGreedyKing

Theworldhasntchangedabit.Greedstilllivesintheheartofthewolf,wrappedinsheeps
clothing.TheWorldBankandInternationalMonetaryFund(IMF)cloaktheStructural
AdjustmentProgram(SAP)inaltruism,butinrealitytheyuseittobenefitthemselvesand
wealthynations
.

TheWorldBankandIMFarewellknownentities,especiallyforparticipatingintheSAP.The
purposeoftheSAPistolendmoneytothepoorestdevelopingcountriesaroundtheworld.It
requiresparticipatingbanks,principallyfromwealthynorthernnations,toprovideloansto
developingcountries.ToqualifyforSAPloans,countriesneedtobeinaneconomiccrisis.
Participatingcountriesneedtoreducefundinginspecificareassuchaseducation,healthand
socialcare,andremovesubsidiesdesignedtocontrolthepriceofbasicssuchasfood.TheSAP
hurtsthepoorthemost,becausetheydependheavilyontheseservicesandsubsidies.

TheWorldBankandInternationalMonetaryFundtakeadvantageoftheStructuralAdjustment
Programbyalteringthesystemforthebenefitofwealthynations.TheSAPdispenseslargeloans
athighinterestrates,knowingdevelopingcountrieswillbeunabletomakethepayments.
DevelopingcountriesareworkingtoescapeeconomichardshiponlytobecheatedbytheWorld
Bank,IMF,andwealthynations.TheSAPloanspromiseeconomicgrowth,buttheonerous
termsinsteadensuredisaster.

Developingcountriesareinaprecariouscondition.Theeconomicsituationbecomesespecially
direwhenasubstantialresource,suchasoil,risesinprice.Thishappenedin1973whenoil
pricesquadrupledinashortamountoftime,leavingpoorcountriesdesperatelyneedingloansto
coverincreasedoilcosts.ThecrisisgavetheWorldBank,IMF,andwealthynationsan
opportunitytoencouragetheirbankstolendmoneytodevelopingcountrieshithardbyrisingoil
prices.Banksobligedbecausetheywereanxioustolendlargeamountsofmoneytoearnhigh
interest.Thiscauseddevelopingcountriestofallfurtherintodebtastheywereunabletorepay
theloans.

The1973oilcrisishighlightedtheprimarypurposeoftheSAP.Insteadofhelpingdeveloping
countriesoutofpoverty,theSAPallowedbankstoprofitfromhighinterestloansattheexpense
ofdevelopingnationswhilecloakingthetrueobjectiveundertheguiseofeconomic
development.JeanSomersmentionsthisnewobjectiveofwealthynorthernnations:Thusthe
priorityofnortherngovernmentswastoprotectthebanksfromtheconsequencesoftheirown
irresponsibility.Theylookedatthecrisisasaproblemofindividualpoorcountriesthathad
simplyborrowedtoomuchnotaresultofthebehaviorofwealthynortherncountries.

Thedisingenuousloantermscreatedistrustbetweendevelopingcountriesandthebanks.How
cantheSAPbeastructuredeconomicdevelopmentprogramifthebanksbetraythetrustofthe
developingcountrieswhoparticipatetobe
helped,
butinsteadaretakenadvantageof?


Thereisofcourseanobjectivehere,togenerateprofitforthebanksandwealthiernorthern
nations.ToseeasystemasbenevolentastheSAPissupposedtobemanipulatedinsuchaneasy
wayisfrightening.TheIMF,WorldBank,andwealthynationsunderstandhowtheSAPworks
andusethatknowledgetobenefitthemselves,whiledesperatedevelopingcountrieslackthe
resourcestoescapethepredatoryterms.

EventhoughSAPsstatetheyhavemadeadifference,mostcitizensofparticipatingcountriessay
ithasnothelpedthemtoemergefromeconomichardship.KennaOwohclearlystatesthe
conclusionfoundduringhisstudiesinNigeria:SAPshavemadelittleimpactonpoverty
reduction.

SAPsareassociatedwithadeclineinpovertyrates,butnotenoughprogressismade,asstatedin
anarticlewith
ThinkAfricaPress
inaninterviewwithShantayananDevarajan:...whilepoverty
isdeclining,itisnotdecliningatafastenoughpace.Whiletheeconomicgrowthisaresultof
commodityprices,thepoorareworkinginagricultureandthereisnodirectlinkbetweenthe
growthinnaturalresourcesandagriculturalgrowth.

So,whoisresponsible?Whoholdstheblame?Obviously,theSAPcanbecategorizedasa
riggedsystem,benefitingonlythebanksandwealthycountries.However,manycountriesthat
participatehaveunaccountablemilitarydictatorswhoweresupportedbyloansfromequally
unaccountablebankers.NortherngovernmentsandtheIMFalsocarryashareoftheblame,as
theirmainconcernistoprofitfromhighinterestrates.

Thearticle,Adjustments:TheCostsAdjustments:TheOutcomestatesanopinionIagree
with:WhiletheadjustmentpoliciesoftheFundandtheBankwerenottheonlycauseof
deepeningpovertyandgrowinginequality,theywereacentrallinkinaviciouscirclewhose
otherkeyelementswerethecuttingoffofcreditflowsbroughtonbythedebtcrisis,increasing
marginalizationfromflowsofforeigndirectinvestment,anddeterioratingtermsoftradeowing
tothesharplyfallinginternationalpriceoftheThirdWorldsprimarycommodityexportsandthe
inexorablyrisingpriceofitsmanufacturedimports.(Walden,1).

TheSAPsabotagesthemarketandtradesystemsindevelopingcountries.Eventhoughthe
primarygoalistohelpdevelopingcountriesbecomemoremarketoriented,itseemsfrom
numerousaccountsthatinfact,themarketandtradeorientationworsensratherthanimproves.

ToreversetheunseenavaricebehindtheSAP,thefirstthingneededistobringtolightthe
hiddensecretsbehindtheseeminglyaltruisticSAP.EventhoughtheSAPmaybehelping
developingeconomiestogrowinminisculeamounts,thelivesofcitizensincountriesarenot
becominganyeasier.Economicgrowthstrengthenstheeconomy,notnecessarilytheindividual
livesofcitizens.AninterviewwithShantayananDevarajanstatestherealtruth:Ataxidriverin
Senegaltoldacolleagueofmine,Icannoteatgrowth.TheSAPshouldbeheldaccountablefor
itsresultsandshouldimprovethelivesofordinarycitizensaswellastheeconomicfutureof
developingcountries,ratherthansimplyliningthepocketsofalreadywealthynations.

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1000

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