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Note: This document is from the archive of the Africa Policy E-Journal, published by the Africa Policy Information Center (APIC) from 1995 to 2001 and by Africa Action from 2001 to 2003. APIC was merged into Africa Action in 2001. Please note that many outdated links in this archived document may not work.

Africa: Structural Adjustment and Rights

Africa: Structural Adjustment and Rights
Date distributed (ymd): 990517
Document reposted by APIC

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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, and then use the document search for document "E/CN.4/1999/50."

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Commission on Human Rights
Fifty-fifth session
Item 10 of the provisional Agenda
22 March-30 April 1999


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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