Hickel says SAPs introduced a three-part cocktail: austerity, privatisation and liberalisation.
“It was a one-size-fits all blueprint, handed down from above by Washington-based technocrats – the central planners of an emerging global economic order that claimed, ironically, to detest central planning.
“The promise was that these policies would alleviate the debt crisis and prevent it from recurring. But this was a very subtle sleight of hand – a kind of ruse. The structural adjustment reforms themselves had nothing to do with the real causes of the crisis.
“The real causes of the crisis were exogenous: they had to do with exorbitant interest rates and declining terms of trade, over which global South countries had no control. But the IMF had no intention of tackling these problems, for to do so would require challenging the interests of Western governments and their commercial banks.
“Instead, the IMF acted as though the problem was endogenous, as though it had to do with problems in the local economy. So the IMF pushed domestic economic reforms as if they were a response to the crisis when in fact they were not. The crisis was simply an excuse for rolling out an economic agenda that Washington had long been seeking to impose.”
Hickel says while the IMF and the World Bank promised the world that structural adjustment would improve economic growth and reduce poverty, it ended up doing exactly the opposite. Instead of helping poor countries, as they were supposedly designed to do, SAPs basically destroyed them….
‘Indeed, structural adjustment turned out to be the greatest single cause of impoverishment in the 20th century: the number of people living on less than $5 per day increased by more than 1 billion during the 1980s and 1990s,” Hickel writes.
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