#CASE 446 HIDRIVE POINT ADJUSTMENT FREE#

Īs stated earlier, implementation of SAPs resulted in a drastic turnaround of Ghana’s overall economic performance. Ghana’s economic reform program was financed by more than six billion dollars in loans from the World Bank and other institutions. Ghana also increased its production and exportation of staple products such as cocoa and timber, as well as non-traditional exports. In Ghana the implementation of structural adjustments involved reducing government expenditures through cuts in social services… privatization of state-owned enterprises. Third, countries that do not adhere to adjustment programs are seen as imposing massive costs on the poor due to unsustainable budget and trade deficits that lead to hyperinflation and economic collapse.

Second, officials at the World Bank and IMF also maintain that a chief element of SAPs is social conditionality, which incorporates provisions that grant welfare services to poverty stricken areas. In the urban sector, SAPs promote import liberalization instead of protected markets, which drives competition amongst local industries because they are able to take advantage of imported technology. SAPs therefore call for the deregulation of rural markets, raising prices and increasing rural employment. For example, when states intervene in the rural sector, where a vast majority of the poor live, agricultural prices inevitably drop, thus decreasing market opportunities. They assert first that when properly implemented SAPs foster the conditions for growth, raising local living standards. Officials at the Bretton Woods Institutions provide three arguments to support their claim that countries that institute SAPs experience greater development than non-adjusting countries.

#CASE 446 HIDRIVE POINT ADJUSTMENT FREE#

The World Bank and the IMF argue that SAPs, rooted in neo-classical economics, a theory that sees the free market as producing the best possible economic outcomes, will alleviate poverty in the Global South, thereby decreasing the divide between the rich and the poor, and decreasing the disparity between rural and urban areas. Proponents assert that the problems of the Third World are due mostly to state intervention in the economy, such as state control of manufacturing enterprises and expansive social service programs.

Ultimately, adjustment programs have had a negative impact on the human rights of Ghanaians. Instead, Ghana is a poignant example of how powerful states have used the implementation of SAPs to maintain the interests of the capitalist system by exploiting the resources of the Global South. The second section argues that the IMF and World Bank have failed to fulfill their mandate in three separate ways: alleviate poverty, improve living conditions in Ghana, and promote economic growth by relieving indebtedness. This section also defines development, a concept used throughout the paper.

The first section briefly outlines the arguments made by the World Bank and the IMF in favor of structural adjustment. Examining data from 1983-1998, this essay will consider whether Ghana has truly developed under its adjustment program as the World Bank and IMF claim. Consequently, the Bretton Woods Institutions including the World Bank and International Monetary Fund (IMF) have lauded Ghana as the most successful implementation of an SAP in Africa. Since then, the country has experienced strong improvements in its socio-economic standing and the heightening of its industrial capacity. Ghana launched its Structural Adjustment Program (SAP) in 1983.

Case 446 hidrive point adjustment