Structural Adjustment Programs (SAPs)

A structural adjustment is a set of economic reforms that a country must follow in order to
secure a loan from the International Monetary Fund or the World Bank. Structural
adjustments are often referred to as a set of economic policies, including reducing
government spending, free trade, etc. Structural adjustments are commonly based on the
assumption that they will make the nation more competitive and increase its economic
growth.

Controversies Surrounding Structural Adjustment

The supporters argue that, structural adjustment encourages countries to become

economically self-sufficient by creating an environment that is friendly to innovation,
investment, and growth. Unconditional loans, according to this reasoning, would only create
a cycle of dependence, in which countries in financial trouble borrow without fixing
anything.

Structural adjustment programs have attracted sharp criticism. Critics argue that the burden
of structural adjustments falls most heavily on women, children, and other vulnerable
groups. Critics also argue that rich countries overpower poor ones—in many cases where the
poor countries get exploited by multinational corporations.

Enough evidence had built from the 1980s to the 2000s showing that structural adjustments
often reduced the standard of living within countries, that the IMF publicly stated too. This
appeared to be the case in the early 2000s, but the use of structural adjustments grew again
in 2014. This has again raised criticism, particularly that countries under structural
adjustments have less freedom to deal with economic shocks, while the rich nations can
avoid public debt freely.