Structural Adjustment Programe in the 1980s
London Southbank University
JANUARY, 2011
THE EFFECT OF STRUCTURAL ADJUSTMENT PROGRAMME IN DEVELOPING COUNTRIES: CASE STUDY OF NIGERIA AND UGANDA
STUDENT NUMBER: 2720509
COURSE UNIT: IMAGES OF DEVELOPMENT
COURSE TUTOR: PROF. JOHN TAYLOR
WORD COUNT:
THE EFFECT OF STRUCTURAL ADJUSTMENT PROGRAMME IN DEVELOPING COUNTRIES: CASE STUDY OF NIGERIA AND UGANDA
INTRODUCTION
A structural adjustment program is a high-powered austerity plan imposed by the Bretton Woods Institutions, i.e. the World Bank and the International Monetary Fund (IMF), in many developing countries as conditionality for debt recovery and economic restructuring. In effect, the ultimate goal of a structural adjustment program is to help indebted countries pay off their debts and have a revitalised economy that will sustain future debt payment.
This usually takes the form of extreme free-market strategies, such as deregulating banking sectors, removing trade barriers, privatizing natural resources and public industries, devaluing currencies, strictly adhering to balanced budgets, changing national laws to make an environment more conducive to foreign investment, and building up export economies. In recent years poverty reduction has become a cornerstone. The programme may be implemented as part of an initial agreement to lend money, or it may be brought in later as part of conditions for the borrowing nations to receive better terms of payment on past loans. (Beneria 1996). The origins of the programme could be traced to the two packages adopted by Philippines in September 1980 and the more high profile one, by Mexico in August 1982 due to the excessive debt burden that had ensued as a result of certain developments between the late 1970s and early 1980s. Due to the position of Mexico as one of the largest economy in Latin American, the announcement by the government that it could not meet its debt repayment obligations sent panic waves in Northern creditor countries and financial
JANUARY, 2011
THE EFFECT OF STRUCTURAL ADJUSTMENT PROGRAMME IN DEVELOPING COUNTRIES: CASE STUDY OF NIGERIA AND UGANDA
STUDENT NUMBER: 2720509
COURSE UNIT: IMAGES OF DEVELOPMENT
COURSE TUTOR: PROF. JOHN TAYLOR
WORD COUNT:
THE EFFECT OF STRUCTURAL ADJUSTMENT PROGRAMME IN DEVELOPING COUNTRIES: CASE STUDY OF NIGERIA AND UGANDA
INTRODUCTION
A structural adjustment program is a high-powered austerity plan imposed by the Bretton Woods Institutions, i.e. the World Bank and the International Monetary Fund (IMF), in many developing countries as conditionality for debt recovery and economic restructuring. In effect, the ultimate goal of a structural adjustment program is to help indebted countries pay off their debts and have a revitalised economy that will sustain future debt payment.
This usually takes the form of extreme free-market strategies, such as deregulating banking sectors, removing trade barriers, privatizing natural resources and public industries, devaluing currencies, strictly adhering to balanced budgets, changing national laws to make an environment more conducive to foreign investment, and building up export economies. In recent years poverty reduction has become a cornerstone. The programme may be implemented as part of an initial agreement to lend money, or it may be brought in later as part of conditions for the borrowing nations to receive better terms of payment on past loans. (Beneria 1996). The origins of the programme could be traced to the two packages adopted by Philippines in September 1980 and the more high profile one, by Mexico in August 1982 due to the excessive debt burden that had ensued as a result of certain developments between the late 1970s and early 1980s. Due to the position of Mexico as one of the largest economy in Latin American, the announcement by the government that it could not meet its debt repayment obligations sent panic waves in Northern creditor countries and financial
References: * Ali Abdel Gadir Ali (2004), Structural Adjustment Programs and Poverty in Sub-Saharan Africa: 1985–1995, [Online], http://www.idrc.ca/en/ev-56338-201-1-DO_TOPIC.html, [Assessed Saturday 1st January 2011] * Botchwey K., P * Devarajan, S., D.R. Dollar and T. Holgren (2001); “Overview” in Devarajan, S., D.R. Dollar and T. Holgren (eds.), Aid and Reform in Africa Washington D.C.: The World Bank.