Answer to Question #235677 in Economics for atiyah

Question

QUESTION

The notion of Structural Adjustment Programmes (SAPs) being effective in, and necessary for, achieving African development would likely be favored by the Bretton Woods institutions— the IMF and the World Bank—the creators of them (Chabal & Deloz, 1999: 119). To assist African development, Structural Adjustment Programmes (SAPs) provided “conditional lending” (Thomson, 2010: 197). Throughout the 1980s and 1990s, the U.S. has been a principal force in imposing Structural Adjustment Programs (SAPs) on most countries of the South. REQUIRED Discuss the expected impact and outcome of the Structural adjustment programs (SAPs) provided by the International Monetary Fund (IMF) and the World Bank (WB) in Third World countries with special reference to Zambia. 

Answer 1

SAPs had failed to develop African states not because assistance was hindered — or ‘thwarted’, in the language used by the IMF. Ineffectiveness occurred because assistance was never the intention. Once the Bretton Woods institutions had “control of exports”, the prices they paid for them decreased, while the cost of their own exports into Africa increased. This was neo-colonialism through “coerced adoption”. Profits were exported to the West and economic growth was crippled through limited local investment. Investment had to be directed towards mono-crop industries, a continuation of the colonial legacy, forcing African states to seek demand from within the international free trade arena until they had become “totally dependent” on IFIs – the very actors claiming to be reducing their dependency.