Structural Adjustment Policies: A Feminist Critique

Sigma: Journal of Political and International Studies Volume 27 Article 2 1-1-2010 Structural Adjustment Policies: A Feminist Critique Hillary Campbell Follow this and additional works at: https://scholarsarchive.byu.edu/sigma Recommended Citation Campbell, Hillary (2010) "Structural Adjustment Policies: A Feminist Critique," Sigma: Journal of Political and International Studies: Vol. 27 , Article 2. Available at: https://scholarsarchive.byu.edu/sigma/vol27/iss1/2 This Article is brought to you for free and open access by the All Journals at BYU ScholarsArchive. It has been accepted for inclusion in Sigma: Journal of Political and International Studies by an authorized editor of BYU ScholarsArchive. For more information, please contact , . , Structural Adjustment Policies: A Feminist Critique by Hillary Campbell Introduction "It is clear that it is women who, as workers, producers, consumers, wives, and mothers, are the shock absorbers of adjustment efforts at immense cost to their well being" (Sadisavam 1997, 633). Although women have many roles to play in the economic and societal make-up of society, their gender specific roles and impacts are largely ignored or unseen by the international community. Due to this "invisibility," women may often bear the brunt of the burden when developing countries receive financial aid from international institutions due to the" conditionality" of these loans. In this paper, through the use of several feminist theories, I will evaluate and explain the detrimental effects of structural adjustment policies put in place by the International Monetary Fund (IMF) in developing countries on women. Explanation of Structural Adjustment Policies IMF describes its "core responsibility" as being to "provide loans to countries experiencing balance of payments problems" (IMEorg). In other words, IMF loans money to countries that are in high amounts of debt and find themselves unable to pay. The economies of these countries are weak and unstable. IMF explains the financial assistance helps countries to "rebuild their international reserves, stabilize their currencies, continue paying for imports, and restore conditions for strong economic growth" (IMEorg). The type of loan most likely given to these countries is called the Poverty Reduction and Growth Facility (PRGF) loan, a loan with the written objective of making "poverty reduction ... central to lending operations in its poorest member countries" (IMEorg). This means that not only does IMF work with the country to stabilize the economy but also attempts to reduce poverty in that country. SIGMA It seems like the perfect solution, an international institution lending money to poor countries, while at the same time placing them on an economic regulation program that will get their economy back on track. All that the country needs to do is to follow the structural adjustment policies (SAPs) set by IMF, which are widely used and continually effecting populations worldwide. "In nearly every developing country in the world today, short-term stabilization measures, structural adjustment programs, liberalization efforts, and economic reforms are to be considered, attempted, or adopted" (Biersteker 1990). Because SAPs are so widely accepted as the solution to indebted nations' problems, it is important to understand what they are, what they do, and what effects they have both on the country and international community. The overall goal of SAPs is to reduce the current account deficit and improve the overall economy of a country. They stem from the idea of the "conditionality" of IMF loans (Balaam and Veseth 2008,156). In order for IMF to give monetary loans to a country, the government must agree to put in place and implement the policies IMF specified. SAPs "typically mean significant changes in economic policies to ensure that the country's domestic and external deficits are drastically lowered or even eliminated. Failure to meet those conditions results in suspension, renegotiation, or even cancellation of the program" (Kapur 1998, 4). The different policies and regulations specified may vary slightly from case to case, but the overall ideas behind them are the same. The goal is to follow the principles originally stemming from the Washington consensus, liberalization, and privatization (Balaam and Veseth 2008, 156). These principles translate into reducing the state's economic influence and creating circumstances for the private market to flourish. There are several policies used to increase a country's overall GDP so the country may begin to payoff debts. IMF so delicately calls the benchmarks that must be obtained and followed for funding "performance criteria" (pes). There are two types of pes, quantitative and structural. "Quantitative pes typically refer to macroeconomic policy variables such as monetary and credit aggregates, international reserves, fiscal balances, or external borrowing" (IMF.org). A country must build up its financial reserves by decreasing spending, increasing output, and attracting foreign investment. "Structural pes are also clearly specified structural measures .... These vary widely across programs but could, for example, include measures to improve financial sector operations, reform social security systems, or restructure key sectors such as energy"(IMF.org). Structural reforms are for the government programs that are allowed to stay in place. They must become more efficient, better managed, and cost less money. The typical components of an SAP include policies that encourage price stability to control inflation and encourage savings, as well as the "macroeconomic policies of fiscal austerity" to cut state spending and subsidies (Balaam and Veseth 2008). IMF does not specify which programs to cut or reduce in funding, however it does require a net decrease in government expenditures. The country's necessary decrease in spending must come from somewhere in the budget. More often than not, countries begin the budget cuts with social programs and subsidies. They typically cut from programs such as health care, welfare programs, social security, education, and agricultural subsidies. 2 CAMPBELL Usually other state programs' budgets such as the military and police force are left unchanged. A decrease in spending could mean everything from decreasing the staff size of a program or cutting funding from the program itself. Either way, these social programs usually take a substantial hit under the conditionality of fiscal austerity. IMF also encourages privatization of many state industries (Balaam and Veseth 2008). Privatization is considered necessary because the private sector is viewed as more economically efficient than the state. Any state-owned industries, such as coal or steel, must become privatized and handled completely by the free market. Many social programs, such as education and healthcare, may privatize as much as possible so that they may be ha (...truncated)