Structural Adjustment Programs


OVERVIEW


Structural Adjustment Programs (SAPs) are a set of economic policies that are implemented by International Monetary Fund (IMF) and World Bank (WB) in developing countries. They constitute the “conditionality” of loans provided by IMF and WB, leaving heavily indebted developing countries with virtually no choice but to implement them. The principle goal of SAPs is to address balance of payment problems and implement fiscal discipline. They also call for significant cuts in public services, trade liberalization, broadening the tax base, reducing marginal tax rates and minimal state regulation on economic activity. [1]
SAPs are traditionally based on a set of economic principles called “Washington Consensus,” a name that alludes to the city that both IMF and WB are headquartered in. Washington consensus principles are based on neoliberal economic philosophy. Developed by Chicago School economists and chiefly advocated by Milton Friedman, neoliberal economics suggest that private markets can do anything the state can in the socio-economic realm, including the provision of social goods. Moreover, without state intervention, a self-regulating market would produce the most efficient results. Hence SAPs that aim to minimize the economic activity of the state and its involvement in the market.

HISTORY


The ideas that led to neoliberal economic thinking was born out of the ideological rift between classical liberal thought of the enlightenment and economic liberalism of Adam Smith. Enlightenment thinking argued that human beings were rational and self-interested agents who would make the decisions to maximize their happiness when there is no outside interference. Led by Chicago School economists like Milton Friedman, neoliberal ideology sought to apply those principles to liberal economics. They argued that if actors in the market were not intervened, they would produce to best results for themselves and which consequently would lead to greatest utility for everyone participating in a free market. Hence, they advocated for a libertarian economic environment with minimal control and regulation.[2] Following WWII, Chicago School initially lost the ideological debate to John Maynard Keynes, who advocated for “controlled capitalism” with fixed exchange rates, a comprehensive welfare state and major public projects financed by the state. Keynesianism sought to ail the excesses of the markets and the potential damage that a boom and bust cycle could do on the poor. However, Keynesianism could not survive the oil shock and global economic recession in 1970s. Neoliberalism re-emerged in 1980s, boosted by Reagan and Thatcher governments in the US and the UK. Consequently, neoliberal economic thinking became the guiding principles of the IMF and WB.[3] Their ideological commitment was reflected into SAPs, which were first designed in 1980 to be implemented in developing countries that accumulated crushing debts during the crisis years. As a result, the ideological commitments of Reagan and Thatcher governments were forced upon developing countries. Today, SAPs serve to promote neoliberal economics in all corners of the globe. Often, SAP agreements signed by different countries are very similar, largely disregarding the local conditions, demands and cultures. [4]

SAPs AND PUBLIC HEALTH SYSTEMS


In line with the neo-liberal disdain with government’s involvement in economy and welfare state, SAPs seek to push the privatization of public healthcare systems. Since the main goal of SAPs is to address the balance of payments issues, governments are most often instructed to attach user fees to public health services that were free. Even though such fees tend to be small, they nevertheless created significant barriers for the destitute poor to access basic healthcare needs. SAPs also sought to decentralize public health systems in order to open the market up for private healthcare providers. International NGOs were entrusted to address the gaps in the overall system. [5] However, as private providers and NGOs came to set up their programs based on their own interests, significant potholes in national healthcare system remained. As the national systems have been decentralized, governments have been unable to develop horizontal healthcare policies that encompass the entire system. [6] As a result, IMF came to be the most influential international governance organization in healthcare policy, surpassing World Health Organization. (WHO)

polyp_cartoon_IMF_Structural_Adjustment.jpg
A cartoon criticizing public service cuts in developing nations due to SAPs


SAPs AND MEDICAL ANTHROPOLOGY


Several medical anthropologists, specifically those who focus their studies on health policy and/or health inequalities have critically engaged with SAPs and their affects on healthcare. At the core of medical anthropology’s engagement with SAPs is the privatization of health and pension systems in developing countries. Several studies have suggested that the erosion of such public safety nets left the poor without access to adequate healthcare and exacerbated health inequalities. They argue that private market is based on profit and not care. Therefore, it does not serve those who cannot pay, fueling inequality. [7]
Medical anthropologists have also criticized SAPs for transforming health into a market good rather than a human right. Critics have also invoked Foucaldian notion of governmentality, arguing that neoliberal policies dictated by SAPs shift the responsibility of health to the individual, hence absolving state from any responsibility for the health of its citizens. Political economy based arguments have also been made within the field in order to critically engage with the inequality related issues created by privatization of healthcare. Within a more cultural approach, some medical anthropologists have argued that the one-size-fits-all SAPs ignore traditional health systems and their needs in favor of promoting an individualized approach to healthcare based on Western culture and ideology. [8]
James Pfeiffer and Rachel Chapman wrote an article in 2010 reviewing anthropological perspectives on the SAPs effects on public health. According to Pfeiffer and Chapman “the stories that anthropologists tell from the field overwhelmingly speak to a new intensity of immiseration produced by adjustment programs that have undermined public sector services for the poor” [9] Within the article, Pfeiffer and Chapman recite several such stories that have emerged from the field of medical anthropology. They show examples of several works in medical anthropology that describe the consequences of the erosion of public health systems. They also pay special attention to HIV epidemic and ART therapies. They cite several medical anthropologists who argue that SAPs exacerbated the social conditions that helped the spread of the epidemic and make treatment more difficult.

SAPs IN CONTEXT


Within the field of Medical Anthropology, Paul Farmer stands out as one of the most critical voices against SAPs. In his writings about his work in Haiti and Peru, Farmer specifically focuses on the ill effects they bring to those countries and their health systems. Farmer points out that SAPs undercut local healthcare mechanisms and put healthcare needs out of the poor’s reach. Farmer also argues that SAPs lead to destruction of local livelihoods, as trade liberalization lets imported food that destroy local agricultural jobs and bring sweatshop jobs instead. The resulting rural-urban migration as Farmer points out, creates an unstable and unhealthy environment and the state has no means to address the situation. While writing about his work in Haiti, Farmer occasionally mentions how a WB funded dam flooded the homes and fields of several Haitian farmers near Farmer’s clinic there. Farmer has also adamantly questioned the appropriateness of using neoliberal cost-effectiveness measures when it comes to healthcare. [10]
Francisco Armada and Carles Muntaner wrote several articles about the affects of neoliberal socio-economic reforms in Latin American health systems and argued that such reforms have exacerbated existing health inequalities and promoted transfer of capital from local poor to national and global corporations. [11]
Another example is James Pfeiffer’s work on healthcare NGOs in Mozambique. Pfeiffer shows that how the SAPs left Mozambique without a chance to develop comprehensive healthcare policy. NGOs who were entrusted to pick up the slack have many limitations, according to Pfeiffer, such as turf wars, overlapping of services, lack of continuity, facilitation of brain-drain of local medical professionals, etc. [12]

MULTIMEDIA RESOURCES



Dr. Clive Peedell of Coventry University talks about the consequences of Global Neoliberalism on Public Health Systems


Chris Banbury, humanitarian activist, talking about the relationship between SAPs and famine conditions in Africa

FURTHER READING


Stiglitz, Joseph E. Making globalization work. WW Norton, 2007.

Friedman, Milton. Capitalism and freedom. University of Chicago press, 2002.

Farmer, Paul. Pathologies of power: health, human rights, and the new war on the poor. Vol. 4. University of California Press, 2004.

Hayek, Friedrich August. Law, legislation and liberty: a new statement of the liberal principles of justice and political economy. Routledge, 2012.

Castro, Arachu, and Merrill Singer. Unhealthy health policy: A critical anthropological examination. AltaMira Press, 2004.

Harvey, David. A brief history of neoliberalism. OUP Oxford, 2005.

WORKS CITED


  1. ^ Stiglitz, Joseph E., et al. Globalization and its Discontents. Vol. 500. New York: WW Norton, 2002.
  2. ^ Snarr, Michael T., and Neil Snarr, eds. Introducing global issues. Lynne Rienner Publishers, 1998.
  3. ^ Rodrik, Dani. "After neoliberalism, what." Remarks at the BNDES seminar on New Paths of Development, Rio de Janeiro, September. 2002
  4. ^ Hardt, Michael, and Antonio Negri. Empire. Harvard University Press, 2001.
  5. ^ Pfeiffer, James. "International NGOs and primary health care in Mozambique: the need for a new model of collaboration." Social Science & Medicine 56.4 (2003): 725-738.
  6. ^ Paluzzi, Joan E. "Primary Health Care since Alma Ata: Lost in Bretton Woods." Unhealthy Health Policy; A Critical Anthropological Examination. A. Castro and M. Singer, eds (2004): 63-78.
  7. ^ Nguyen, Vinh-Kim, and Karine Peschard. "Anthropology, inequality, and disease: a review." Annual Review of Anthropology (2003): 447-474.
  8. ^ Towghi, Fouzieyha. "Shifting policies toward traditional midwives: implications for reproductive health care in Pakistan." Unhealthy health policy: a critical anthropological examination (2004): 79-95.
  9. ^ Pfeiffer, James, and Rachel Chapman. "Anthropological perspectives on structural adjustment and public health." Annual Review of Anthropology 39 (2010): 149-165.
  10. ^ Farmer, Paul. Infections and inequalities: the modern plagues. University of California Press, 2001.
  11. ^ Armada, Francisco, Carlos Muntaner, and Vicente Navarro. "Health and social security reforms in Latin America: the convergence of the World Health Organization, the World Bank, and transnational corporations." International Journal of Health Services 31.4 (2001): 729-768.
  12. ^ Pfeiffer, James. "International NGOs and primary health care in Mozambique: the need for a new model of collaboration." Social Science & Medicine 56.4 (2003): 725-738.