- Category: Stories
- Published on Thursday, 23 December 2010 18:37
- Written by Charles Rukuni
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While adjustment is necessary for any system, as to deny to adjust is to refuse to allow a system or set of systems to function as they were intended to or to function in the most efficient manner, Structural Adjustment Programmes in Africa have failed largely because they are imposed by the International Financial Institutions (IFIs) without taking cognisance of the social and economic realities in the affected countries, economic analysts say.
The experts say the International Financial Institutions have tended to heap the entire blame for poor economic performance in African economies on internal causes in these countries. Terms of trade which have worked against these economies have been least considered.
They argue that there have been no attempts to decipher in quantitative terms contributions to the African economic crisis of external and internal causes. Criticisms of "white elephants" constructed soon after independence have been put on poor policies yet these were created with the tacit support and technical advice of the World Bank and other IFIs. Their share of the blame for economic mismanagement in post independence Africa is not stated. As a result of this one-sided viewpoint, measures taken to combat the economic crisis are either irrelevant or do not address the real causes.
The presentation of the weaknesses discovered in the African economies were also poorly handled by the IFIs, the experts argue. The IFIs often adopted an air of "these people do not know anything and distort the market". To worsen the situation, some sections of the African economies took the same line as the IFIs and posed as "brave anti-government proponents", the experts say yet these very critics are people who benefitted from the government policies they now criticise like free education, free medical treatment and guaranteed employment.
"African leaders have equated the critics to people who after climbing by a ladder, they pull the ladder up with them so that climbing up becomes difficult for the majority, " the experts argue.
ESAPS have also failed because of the IFIs attack on social services such as free health and free education which African leaders see as the stepping stone for the majority of the people.
There has also been a tendency to link economic aid with political pluralism. While the idea is not bad since development comes if there is true democracy and intelligent hard work in a competitive environment, the presentation of the issue was unacceptable as it sounded like "getting orders from abroad", a sort of neo-colonialism, the experts argue.
Another problem is that while demanding pluralism and democracy the IFIs never advised the creation of sound tripartite institutions to guarantee industrial democracy. On the contrary their recommendations insinuated that labour protection and minimum wage legislation worked against labour market flexibility.
The experts also say IFIs have adopted the story of profit maximisation at all times without considering things like employment creation, balanced economic growth and improvement of the living standards of the workers.
These are issues which they claim will be solved automatically as the economic growth picks up. This has not happened. Instead their policies have led to reduced employment levels, reduction or freezing of wages an high inflation rates.
The measures have actually been very unpopular with the workers because of the increased suffering they face, the experts say.
The IFIs have also concentrated on reducing budget deficits, sifting-off excessive liquidity, reducing credit expansion and the privatisation of State-owned enterprises to reduce the burden on governments. These measures have been implemented unselectively.
Even some profitable State -owned enterprises have been privatised. After the privatisation prices have gone up beyond the reach of the people that were supposed to benefit.
The experts argue that the popular thinking in Africa is that it is only unprofitable parastatals that should be privatised so that the private sector can prove its financial muscles and entrepreneurial capabilities. Unfortunately,the IFIs say unprofitable parastatals should be closed, the workers retrenched and the profitable parastatals should be privatised.