Structural Adjustment Programs Have Led To The Increase

1682 WordsMar 31, 20177 Pages
Structural adjustment programs have led to the increase in poverty by reinforcing the peripheral status of these countries within the capitalist system. The international system in characterized by the domination of peripheral countries by core, developed nations (Afriyie, 2009, 51). This system is being reinforced by structural adjustment policies that make these peripheral countries dependent and indebted to the core. The first policy that helps reinforce this system is currency devaluation. This policy makes the adjusting countries goods cheaper for foreigners to buy while increasing the price of foreign goods (Afriyie, 2009, 54). To counteract this these countries are given large foreign currency loans that encourage the purchase of…show more content…
This unequal exchange of raw materials for processed goods is impoverishing these peripheral countries and allowing the developed, core countries to flourish. Rising food prices leads to more families being pushed under the poverty line (Rao & Lowenson, 2000, 7). While the IMF and World Bank claim structural adjustment programs would eliminate poverty, this has not been the case in many of the countries where these policies were implemented in (Odutayo, 2015) The continued indebtedness of developing countries results in the inability to address the growing poverty and inequality problem within these countries. The policies these developing countries are forced to implement keep them poor and powerless in the global economy (Odutayo, 2015, 88). These programs produce a vicious cycle where these indebted countries are forced to implement detrimental neo liberal economic policies that result in poverty and debt being a permanent condition of the developing world (Manji, Fiorze, Burnett, 2010, 10). In 2002, the North received around $200 billion American dollar from the South in debt repayment (Odutayo, 2015, 88). In Ghana one third of its export revenue goes to the IMF and the reaming profits go to the the Bretton Woods Institution and G7 members (Harrigan & Younger, 2000, 198). With developing countries contributing their export revenue to loan repayments, they are unable to address any
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