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The Soon Coming Judgment Of God Upon America and How To Escape It 138
Structured Adjustments
When a nation gets too far in debt to the development banks and is unable to make its
payments, the banks offers structural adjustments. The term sounds like a method by which a
nation is given some form of debt relief; this is in no way the case! The organization “50 Years
Is Enough: U.S. Network for Global Economic Justice” points out that “[s]tructural adjustment
has exacerbated poverty in most countries where it has been applied, contributing to the suffering
of millions and causing widespread environmental degradation. And since the 1980s, adjustment
has helped create a net outflow of wealth from the developing world, which has paid out five
times as much capital to the industrialized countries of the North as it has received.”
Further, they point out that “[m]uch of this [third world] debt dates back to 1970s, when
it was lent irresponsibly by commercial banks and borrowed recklessly by foreign governments,
most of which were not popularly elected and which no longer hold power. The advent of the
debt crisis, which occurred in the early 1980s due to a worldwide collapse in the prices of
commodities that developing countries export (e.g., coffee, cocoa) and to rising oil prices and
interest rates, forced these countries into a position where they were unable to make
payments.”
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Structural adjustment programs (SAPs) are a set of conditions that the World Bank and
IMF are able to negotiate with debtor nations who are having difficulty making their payments or
have defaulted. SAPs don't benefit debtor nations; they benefit the US and the six other nations
(U.K., Japan, Germany, France, Canada, and Italy) who control 40% of the votes on the boards
of the banks. SAPs are not entered into enthusiastically or what you would call “willingly” by
debtor nations, they simply have little choice.
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To sweeten the package, debtor nations are
offered millions of dollars in further loans if they accept the SAP.
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“It has been argued that the
IMF prefers dictatorships to democratic governments, because dictators can more successfully
impose SAPs. And once the rules are in place the WTO extends the attack on democracy by
overruling any regulations that corporations claim interfere with their right to profits.” Typical
terms of SAPs include:
“Cut Social Spending: Reduce expenditures on health, education, etc.”
“Shrink Government: Reduce budget expense by trimming payroll and programs.” Payrolls
are trimmed by laying off employees.
Increase Interest Rates: in order to combat inflation, interest rates are increased which
discourages borrowing and encourages saving.
“Eliminate Regulations on Foreign Ownership of Resources and Businesses.” This enables
multinationals to exploit the nation.
Eliminate Tariffs: Tariff taxes are eliminated which has the net effect of increasing a nations
imports and decreasing domestic sales of domestically-produced goods.
“Cut Subsidies for Basic Goods:” Government subsidies make domestically produced goods
more affordable and more price competitive with cheaper imports. Subsidized goods include
commodities such as grains used for bread, petroleum, and others.
“Re-orient Economies from Subsistence to Exports:” After subsidies for basic necessities are
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