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Africa: Structural Adjustment and Rights
Africa: Structural Adjustment and Rights
Date distributed (ymd): 990517
Document reposted by APIC
+++++++++++++++++++++Document Profile+++++++++++++++++++++
Region: Continent-Wide
Issue Areas: +political/rights+ +economy/development+
+security/peace+
Summary Contents:
This posting contains excerpts from the final chapter of a
report prepared for the UN High Commission on Human Rights
55th Session, on the impact of structural adjustment programs
on economic, social and cultural rights. The full report is
available on the web site of the UNHCHR. Go to
http://www.unhchr.ch/huridocda/huridoca.nsf, and then use the
document search for document "E/CN.4/1999/50."
+++++++++++++++++end profile++++++++++++++++++++++++++++++
UNITED NATIONS HIGH COMMISSION ON HUMAN RIGHTS
E/CN.4/1999/50
Commission on Human Rights
Fifty-fifth session
Item 10 of the provisional Agenda
22 March-30 April 1999
THE IMPACT OF STRUCTURAL ADJUSTMENT PROGRAMMES
ON THE
REALIZATION OF ECONOMIC, SOCIAL AND CULTURAL RIGHTS
Report Prepared by Professor Fantu Cheru, Independent Expert
on Structural Adjustment
January 28, 1999
Chapter III: Changing Course: Proposal for an Alternative
Strategy
...
Macroeconomic reforms such as devaluation, pricing policy, and
budget and tax reforms are necessary components of a balanced
and integrated national development strategy. But
implementation of these policies will have little impact on
long-term sustainable development, sound management of natural
resources, or on the reduction of poverty and inequality
unless accompanied by fundamental transformation of unjust
economic and political structures both at national and global
levels. In short, a realignment of economic structures is much
a matter of realignment of power structures, which more often
than not, will be resisted by powerful social and political
groups within a given country or powerful forces in the global
economy. ...
Adjustment with 'transformation': Underlying Principles
An alternative "adjustment with transformation" should
emphasize sustainable economic growth combined with social
justice. This would entail adjusting economies to meet human
needs and not vice versa. The Copenhagen Declaration and
Program of Action (para.91), for example, called on
governments to ensure that, in structural adjustment programs,
social development goals are included; basic social programs
and expenditures are protected from budget reduction; and, the
impact of structural adjustment programs should be reviewed
and altered to reduce their negative effects and improve their
positive impacts. Furthermore, adjustment with transformation
should have the following elements:
(a) Promoting human development and gender equality:
'Adjustment with transformation' should be geared to start the
broad process of human development and empowerment.
Empowerment is the very essence of human development, not just
a means to an end. Political and economic reforms in the Third
World must seek to empower ordinary men and women to take
charge of their lives, to make communities more responsible
for their own development, and to make governments listen to
their people. The process of empowerment involves transforming
the economic, social, psychological, political and legal
circumstances of the currently powerless. It involves the
development of autonomous and coherent popular organizations,
and the defence of, and education about, the legal rights of
the popular sector. ...
(b) Priority to meeting basic human needs: 'Adjustment with
transformation' must place emphasis on alleviating poverty and
meeting the basic needs of the people, who are the principal
resources to build on. The provision of health care, basic
nutrition and education are the basic building blocks of a
human- centered transformation strategy. Malnourished people
unable to receive health and educational services are in no
position to improve their own well-being or indeed contribute
productively to the nation. Nutritional imbalances are as
crucial as trade imbalances, and high infant mortality rates
require as immediate action as high rates of inflation.
Therefore, how countries incorporate human concerns should be
an integral part of their adjustment programs. This implies a
critical look at existing models --primarily export-led growth
-- currently promoted by international financial institutions.
Export-led growth has carried as a corollary the erosion of
basic human needs. The cooperation of Third World governments
with local and international private interests in a triple
alliance has meant that none of the three is beholden to or
likely to serve the needs of the poor. Encouraging developing
countries to become self-reliant in food production is a key
component needed to ensure that countries can weather balance
of payments storms with their people's welfare intact.
(c) Democratic representation and decision-making: 'Adjustment
with transformation' must ensure that the people have a
significant voice in shaping how development policies in
general are formulated and implemented. There is rarely
commitment by the people to any policy which is imposed from
above or from outside by those who assert that they have the
knowledge and arrogate to themselves the authority to decide
for others. Participation is a human right. People should be
enabled to reflect on their own problems and to articulate
their own ideas of solutions to such problems. Only if this is
done can development be seen as a liberating process, and the
creation of conditions for people and societies, particularly
those presently oppressed and marginalized, to identify their
own needs, mobilize their own resources and shape their
future. ...
At the international level, democratization and social reform
in the Third World is contingent upon the degree of internal
change in the core countries and their institutions.
International financial institutions, so long dominated by the
G-7 countries, need to be democratized. Currently,
representation and voting in these Bretton Woods institutions
are based on economic power: "one dollar, one vote." Thus the
G-7 exercise dominant influence over these institutions'
decisions, while the vast majority of poorer countries have no
real power at all. As a result, these institutions continue to
enforce their own definitions of development around the world
with little regard to the consequences of their policies on
the majority of poor people in developing countries. Ideally,
institutions like the IMF and informal fora like the Paris
Club should be reshaped to ensure that non-governmental
organizations of debtor countries-- such as peasant and worker
unions--have input into fashioning their countries' adjustment
programs. Until large numbers of informed citizens demand
these changes, it will be very difficult to affect decisionmaking
in the multilateral institutions.
(d) Guarantee of fair reward for labor: This principle is
relevant to all institutions governing the world economic
order, whether they govern finance, trade, or development. At
the level of national economies, the world economic system
should guarantee fair and remunerative prices to developing
country producers of raw materials, and institutions governing
world trade should be reformed or built anew to further this
principle. For the debtors of our era, just as in the 1930s,
it is catch 22. Countries struggling to export their way out
of the debt crisis ought at lest to earn a fair price for
their wares, and be able to sell them without undue
encumbrance. Neither condition holds true today. ...
At the level of the individual laborer, decisions by the
multilateral institutions should not undermine labor rights.
Currently, IMF programs often seek to reduce real wages and
reinforce government repression of workers seeking better
wages or working conditions.
(e) Equity in sharing the burden of debt: Democratic treatment
and accountability implies greater equity in sharing the
burden of adjustment both at the local and international
level. The costs of the $1.5 trillion Third World debt will be
paid by someone. They must, however, be lifted from the poorer
majorities who have had the least role in creating the crisis.
The burden must be shared more equitably among countries as
well as social groups and the world's transnational bank
lenders. This requires an end to disguising the problem, to
maintaining the fiction that the bulk of these loans are still
"performing" in any meaningful way.
It is on the foundation of these principles that the range of
proposed solutions to the social and economic crisis are
assessed, and that new proposals for advancing human-centered
development are offered.
(1) Actions to be taken at the International Level
(a) Debt
cancellation for the Heavily-indebted poor countries:
significant debt reduction is necessary for the recovery and
resumption of growth in many poor indebted countries. Priority
should be given to: (i) countries emerging out of years of
devastating civil war (so-called post-conflict countries); and
(ii) countries that have been devastated by natural disasters.
Even for countries not classified as severely indebted, the
debt overhang poses tremendous constraint to growth. However,
any debt-cancellation program must have broad-based citizen
support and be consonant with a national economic plan that is
formulated with broad consultation with all the relevant
national actors, particularly civil society organizations.
This is a proposal currently being pushed by the Global
Jubilee 2000 campaign on debt reduction. ...
(b) Instituting Human rights conditionality in future lending:
While 'conditionality' is a contentious issue as it is
considered to be undermining the sovereignty of nations, it is
desirable as long as it is based on 'human development' and
'human rights' criteria, and on the basis of broad
consultation with civil society organizations and national
governments. This requires greater transparency and
accountability by lenders, particularly the World Bank and the
IMF. The secrecy surrounding adjustment programs should be
eliminated. Specifically, all letters of intent to the IMF
should spell out the projected impact of economic adjustment
policies on jobs, wealth distribution, and basic needs.
Conditionality ensures that debt relief provided is used
effectively and not squandered on corruption, military
expenditure and grandiose projects with little if any benefit
in terms of sustainable growth or poverty reduction. Each
country should establish a monitoring unit composed of
representatives of government, donors and civil society to
monitor compliance by governments.
(c) Establish international mechanism to retrieve money stolen
by corrupt leaders: The pressure of debt on some poor
countries can be eased if an international effort is mounted
to retrieve large sums of money taken away illegally by many
corrupt Third World leaders. This will require the same level
of attention, if not more, by western countries as they do to
the tracking of money laundered through commercial banks by
drug traffickers. The recent decision by the Swiss Government
to compensate survivors of the Nazi 'holocaust' for stolen
gold and money deposited in Swiss banks could be used as a
precedent to do the same with large sums of money taken away
by Third World elites.
(d) Reform of the international economic, financial and trade
systems: Long-term development in indebted countries is
impossible without a basic restructuring of world financial,
monetary, and trade systems. Much more effort by the
international community will be required to establish a more
propitious trading and financial climate within which debtor
nations can hope to increase their exports and attract various
forms of financing needed to achieve a positive momentum in
their economic development. Measures to end recession, to
stimulate trade and ease financial constraints should be
considerably more important than aid transfers. Specifically,
ensuring fair prices for commodities and market access to
these products are of dominant importance. This requires
structural changes in the field of primary commodity trade, by
giving the least developed better access to Northern markets,
encouraging more processing of their commodities before
export, extending the preferential treatment now accorded
them.
(e) Natural Resource Preservation: Future lending should be
made conditional on impact to the environment and resource
base the poor depend on. The financing of large dams that
would result in displacement of large numbers of people and
ruin the ecosystem should be discouraged if possible. Projects
of that magnitude should not be contemplated without proper
consultation with the affected communities.
(2) Action to be taken at the Regional level
At the regional level, the need for much stronger coordination
and cooperation on many aspects of economic development must
be given much more emphasis. The potential benefits from
increased intra-regional trade in agricultural and industrial
items, in many areas of services (transport, communications,
tourism, etc), in financial matters, and on research into
agriculture and health, for example, are very considerable
indeed. Unfortunately, the orthodox SAP approach deals with
each country individually and without taking into
consideration the need to strengthen regional cooperation, and
more efficient use of resources through sharing.
In a world economy dominated by powerful regional economic
blocs, enhanced regional integration, particularly in Africa,
would enable countries to expand regional trade and for close
coordination in broad areas of economic policies. Cooperation
would offer conditions under which local specializations can
take place, fully exploiting local (as opposed to global)
comparative advantages, by combining their assets and sharing
resources. It would allow complementarities to emerge across
regions and reduce high production and marketing costs.
Therefore, 'structural adjustment with transformation' should
give due emphasis to regional cooperation.
(3) Action to be taken at the national level
Structural adjustment with transformation at the national
level must emphasize economic growth that is oriented toward
improvement in human development. Without growth, it is
difficult to create jobs and increase wages. But the links
between economic growth and human development depend on the
following:
- Renewal of democratic forms of government: A credible policy
framework to promote economic growth and human development in
indebted countries, particularly in Africa, must address
issues relating to the political climate. The key elements of
such an environment are political stability, rule-based
political order mediated by an impartial and independent
judiciary, and good governance, with particular emphasis on
transparency and accountability. Decentralization and the
strengthening of key government institutions are essential for
opening up new avenues for people's participation in national
politics. ...
- Creating a climate for equitable economic growth: Emphasis
on market reform alone cannot provide an 'economic miracle';
also required is strong cooperation between both the state and
civil society. An effective strategy of poverty reduction must
include increasing investment in rural infrastructure and
improving access of the poor to productive assets, such as
land and credit. Better price incentives, improving the
efficiency of markets, swift steps to deal with unproductive
government expenditures, better selection of public investment
projects, containing monetary pressures, maintaining a
realistic exchange rate, etc. are all necessary components to
growth with equity. The important role of the private sector
(particularly the domestic private sector) must also be
recognized and promoted. In short, the state must create an
enabling environment for citizens to save, invest and produce.
- ensuring food security: Fundamental economic restructuring
in poor indebted countries must give priority to
transformation of peasant agriculture, by shifting significant
levels of national resources to support this sector and by
reversing the balance of power from central administration to
community control of decision-making. Priority should be
assigned to food and livestock production and distribution
(including for export), and attention should be given to
assure not only that food is available but also that the
people have the means to acquire it.
This in turn leads to the need for providing either employment
or accessibility to productive land, which in turn implies the
necessity to improve agricultural extension, credit and
training, as well as sectors in support of agriculture,
including the development of agro-related industries, and the
improvement of transport and other physical infrastructure in
rural areas.
- support for the informal sector: In many countries, the
informal sector plays a significant role in generating
employment and income for millions of people while providing
necessary services. A strategy of adjustment with
transformation should be directed to encourage this sector, by
removing inhibiting legal regulatory customs, and by
developing sources of credit, training and marketing channels.
Structural adjustment in post-conflict countries
Economies wrecked by years of war, famine, and or military
dictatorships, which lack infrastructure and management
skills, cannot overnight adjust to changing dynamics of the
global economy. The primary objective of external and local
efforts in post-conflict countries should, therefore, be the
establishment of peace with justice. It is unrealistic to ask
countries like Rwanda, Somalia or Sierra Leone to embrace an
"orthodox" adjustment program to rebuild their devastated
economies, when heeling the deep scars of war and genocide
alone is such a daunting task.
Of the 33 heavily-indebted poor countries in Africa, 12 are
currently engaged in war or are struggling to put their houses
in order after years of war. The task of peace building and
reconstruction in these countries is extremely difficult.
Reconstruction faces the dual challenges of reactivating the
economies of the ex-conflict countries while promoting
reconciliation among those who were life-and-death
adversaries during the war. Establishing a functioning civil
administration, ensuring security to returnees and displaced
persons, providing basic food and shelter are all daunting
tasks which cannot be remedied by adoption of conventional
structural adjustment programs. ...
This material is being reposted for wider distribution by the
Africa Policy Information Center (APIC). APIC's primary
objective is to widen the policy debate in the United States
around African issues and the U.S. role in Africa, by
concentrating on providing accessible policy-relevant
information and analysis usable by a wide range of groups and
individuals.
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