[stop-imf] Reasons to Come to DC for A16 No.1: Structural Adjustment Worsens Poverty

Thu, 6 Apr 2000 18:51:45 -0400 (EDT)

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This is a first of a series of one pagers on "Reasons to Come to DC for
April 16." Each will address a different aspect of IMF/World Bank
policies. A version formatted in MS Word is attached. Please spread these
widely, and feel free to lift from them for your own use.

For more on the demonstrations, go to www.a16.org

Robert Weissman
Essential Information			|   Internet:	rob@essential.org

Essential Action
P.O. Box 19405
Washington, D.C.  20036
TELEPHONE: 202-387-8030       o       FAX: 202-234-5176       o
E-MAIL: ACTION@ESSENTIAL.ORG

Reason No. 1 to Come to DC on April 16:
International Monetary Fund (IMF)/World Bank structural adjustment
programs have increased poverty around the world

Structural adjustment -- the standard IMF/World Bank policy package which
calls for slashing government spending, privatization, and opening up
countries to exploitative foreign investment, among other measures -- has
deepened poverty around the world. In the two regions with the most
structural adjustment experience, per capita income has stagnated (Latin
America) or plummeted (Africa). Structural adjustment has also contributed
to rising income and wealth inequality in the developing world. 

Here's how various structural adjustment policies increase poverty:

* Privatization -- Structural adjustment policies call for the sell off of
government-owned enterprises to private owners, often foreign investors.
Privatization is typically associated with layoffs and pay cuts for
workers in the privatized enterprises.

* Cuts in government spending -- Reductions in government spending
frequently reduce the services available to the poor, including health and
education services (though the IMF and World Bank now say they preserve
health and education spending). 

* Imposition of user fees -- Many IMF and World Bank loans call for the
imposition of "user fees" -- charges for the use of government-provided
services like schools, health clinics and clean drinking water. For very
poor people, even modest charges may result in the denial of access to
services.

* Promotion of exports -- Under structural adjustment programs, countries
undertake a variety of measures to promote exports, at the expense of
production for domestic needs. In the rural sector, the export orientation
is often associated with the displacement of poor people who grow food for
their own consumption, as their land is taken over by large plantations
growing crops for foreign markets.

* Higher interest rates -- Higher interest rates exert a recessionary
effect on national economies, leading to higher rates of joblessness.
Small businesses, often operated by women, find it more difficult to gain
access to affordable credit, and often are unable to survive.

* Trade Liberalization -- The elimination of tariff protections for
industries in developing countries often leads to mass layoffs. In
Mozambique, for example, the IMF and World Bank ordered the removal of an
export tax on cashew nuts. The result: 10,000 adults, mostly women, lost
their jobs in cashew nut-processing factories. Most of the processing work
shifted to India, where child laborers shell the nuts at home.

FOR INFORMATION ON THE APRIL 16 PROTESTS IN DC, GO TO WWW.A16.ORG

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