Structural Adjustment Program ( Saps )

According to Mohan, (2009) despite the presence of the financial bodies usually at the request of government authorities, he is of the opinion that SAP is a political tool for eroding the sovereignty of developing countries. It serves as an opportunity for these institutions to influence national agendas through conditionality’s, sanctions or collaboration with policy elites of the state.

Several developing countries are sunk in debt and poverty because of the arrangements of global establishments, for example, the International Monetary Fund (IMF) and the World Bank. Their projects have been vigorously reprimanded for a long time and have been constantly blamed for poverty. Moreover, developing countries have been in constant expanded reliance on the wealthier countries, despite the IMF and World Bank's claim that their main goal is to fight poverty (Shah, 2013). During recent decades, the poorest nations on the planet have needed to swing progressively to the World Bank and IMF for money related help, because their impoverishment has made it unthinkable for them to acquire somewhere else. The World Bank and IMF connect strict

In order to be considered for assistance, countries must have an unsustainable amount of debt, be eligible for interest free loans from the World Bank’s International Development Agency, have a good track record of reform through World Bank supported programs, and have completed a Poverty Reduction Strategy Paper (PRSP). After a country shows that they have met this criteria and continues to meet it and follow through with with their strategy, then they are deemed capable of earning their complete amount of debt relief funds.

Due to capital limitations, most governments, particularly in the developing nations borrow funds from their bilateral friends and organizations such as World Bank and International Monetary Fund (IMF) in earnest to enable them pursue development projects, and sometimes to correct balance-of-payment deficits. Nevertheless, such governments must adhere to some outlined conditions that are spelt out in the article of agreement in order for them to secure the loans; otherwise, the loans are withheld (White, 2012). Equally, a healthy population significantly contributes to economic development of

The IMF and World Bank providing loans to impoverished and financially unstable countries is not only irresponsible, it's unethical. I intend to use the example of the loans provided to Mexico during the Mexican peso crisis, also called the Tequila crisis or December mistake crisis to illustrate this, and then provide what I believe would be a better solution

Neoliberal globalization is an economic system that promotes free market policies of liberalization, deregulation, privatization, and the cutting of social support systems. The International Monetary Fund and the World Bank help promote these policies by making structural adjustment programs conditions for any aid or support. Unfortunately, once structural adjustment programs are put into place they tend to disrupt developing countries’ economies and end up making them even worse off than before. Before the 1980s, developing countries had a per capita growth rate of more than 3%, once these policies were put into place growth rates dropped to 1.7% (Hickel 2012: 7). This provides evidence that these programs are pushed at developing countries

is accomplished through loans to struggling countries. In addition to the World Bank, the International Finance Corporation was annexed to provide loans to corporations who are seen to help aide in poor countries’ development. These three organizations

International institutions reflect the interests of core capitalists and therefore do not essentially alter the economic positions of core and periphery countries. Global institutions and organizations are usually created by core countries and often refrain from undermining the authority of the core. Instead, IGOs and NGOs tend to perpetuate the power of the core by encouraging policies that align with the interests of wealthy countries and consequently exacerbate underdevelopment in peripheries. A significant example of mistreatment against Chile is the debt crisis it faced since the late 1900s. The USA and lending agencies such as the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD) declined

However, although globalization has helped several countries, "in some developing countries, foreign aid and investments are not relieving widespread poverty, and policies forced by global institutions like the International Monetary Fund (IMF) and World Bank have created more harm than good, because the policies are based on models constructed by the developed countries and are not customized for each developing country 's situation" (2003).

One major complaint about the World Bank is that it causes high debt in developing countries. Even though the loans are meant to help these countries, they end up causing the countries to take on debt that they must pay interest on and remain under the conditions of the institution. Another is that as part of their lending requirements; the World Bank has imposed rigorous conditions on recipient countries. These requirements are known as structural adjustment programs. These programs force countries to adopt their conditions, such as deregulation of capital markets, reformation of national companies to private corporations, and downscaling of social welfare programs. Privatization of water supplies and public pensions, and imposing fees for public hospitals and publics schools are among the debated bank reforms. In his book, 50 Years Is Enough, Kevin Danaher describes the World Bank's policies as "austerity plans that 'reform' economic policies by suffocating the poor and inviting

After debt crisis, neoliberal policies, implemented by IMF and World Bank in 1982 and resulted by Washington Consensus, led to inequity in income distribution and increased poverty. In addition, these policies aimed transformation on social and political structure and established new institutions as an alternative interventionist model to state intervention. Thus, social unrest increased and new resistance mechanisms emerged as a reaction to neoliberal policies in 1990s. Resurgent social movements tended to break with neoliberal policies by producing alternatives. As an expression of this tendency, political results came out of these social movements.

Harvard Business School’s Case Study “Aid, Debt Relief, and Trade: An agenda for fighting World Poverty” outlines the steps, and missteps, that the world community has taken since World War II to address the efficacy of international assistance. The study focuses on international financial institutions (IFIs) and their ability to help poor nations break out of poverty and the possible obligations of rich, developed countries to assist the heavily indebted poor countries (HIPCs). Additionally, the study seeks to see if this assistance has been and can be parlayed into growth and investment for the HIPCs.

Under the Bretton Woods organizations the debtor countries where financial discipline. This led to asperity and the Third World charging it as “lost decade.” .(Mc Michel 223). The lending institutions that were trustees in debtor nations were centralized in the Global Governance .

Many governmental and non-governmental organizations argued that external constraint like high inherited levels of foreign debt have crippled in the capacity of low income countries to overcome poverty and that concessional lending’s are not enough. This lead to the ‘Enhanced Heavily Indebted Poor Country (HIPC)’ initiative in 1996 in collaboration with world bank to eliminate unsustainable debt in the world’s poorest and most heavily indebted countries.

In the periods of 1980s and 1990s the introduction of structural adjustment programmes differently named as economic reconstruction programme, new economic policy, economic adjustment programme and so on in several African, Latin American, Caribbean and Asian countries. The focus of the programme at two levels one is micro level and second is meso level. At micro level programme has been towards liberalizing the markets and creating an environment for global transfer of goods and services. At meso level, the