The Politics of Adjustment Policy

Akilagpa Sawyerr

Introduction
What is often described as "the African economic crisis" of the early 1980s has
been engraved on the consciousness of the whole world by the glassy look in
the eyes of emaciated and starving African  children and the evident  anguish
of their equally emaciated and starving mothers in posters and pictures on the
television screens and in newspapers the world over. Even as the international
community  was  moved  to  provide  emergency  relief  on  an  unprecedented
scale, the  virulence  and  scale  of  the  disaster  brought  into  sharp  relief  the
question  of  underdevelopment  and  the  long-term  viability,  not just  of  the
countries of the Sahel belt, the hardest hit sub-region, but of all the countries
of  Sub-Saharan  Africa  (SSA).  This  prompted  a  series  of  meetings,
conferences  and seminars, both within the African  region and at the United
Nations  and  other  international  fora,  and  the  adoption  of  important
resolutions and measures for dealing with the crisis.

For their part, almost all the countries of the sub-region have had to institute
programmes  of economic reconstruction, generally described  as  "structural
adjustment  programmes"  (SAP), to  remove  what  are  perceived  to  be  the
causes of the crisis, and to put the economies of the sub-region on a path of
development that would prevent any recurrence of such a catastrophe1. This
has been done usually under the auspices, or in accordance with the precepts,
of the principal international financial institutions, namely the  International
Monetary Fund  (IMF)  and  the International  Bank for  Reconstruction  and
Development (IRBD), otherwise known as the World Bank.

Since the  crisis was seen as resulting from  obvious failures  in  economic
performance in all the countries of the sub-region, the SAPS have tended  to
focus  on  the  strictly  economic  aspects  of  the  corrective  process.  This  left
largely untreated the question of the political preconditions for the success of
the SAPS as well as the impact of the measures undertaken  thereunder  on
internal social and political conditions in the short-to-medium-term. This was
perhaps understandable in the desperate years of the 1980s. But in view of the
devastating impact of the crisis on the living conditions of large sections of the
populations in the SSA countries, and the deterioration of those conditions in
the years immediately following the introduction of SAPS, greater  attention
has more recently been directed at the non-economic dimensions of the crisis
and attempts at its resolution.

It is now recognised, for instance, that the social and political conditions
for the long-term maintenance of economic development programmes  need
to be properly appreciated and written into SAPS. The unavoidable harshness

2 AKILAGPA SAWYERR

of the  austerity measures  is liable to alienate  important  social groups and
political interests, thereby jeopardizing the entire economic recovery process.
It is against this background that conferences such as the present one are
addressing the specifically "human dimension" of the crisis and the measures
adopted for its resolution.

This paper is intended as a contribution to the discussion of the political
aspects of the adjustment process in Africa. It attempts to situate the economic
crisis and the resultant structural adjustment measures within the framework
of the political economy of Africa to relate this to the economic development
objectives explicitly set out at OAU summit meetings since 1980 and to point
out ways in which socio-political  conditions pose serious problems for  the
entire recovery effort.
The Political Economy of Africa, the Economic
Crisis and Structural Adjustment Measures - An
Overview
In this section, we outline the principal features of the African economic crisis
against the background of the political economy of Africa,  then itemise the
main elements of the structural  adjustment  measures undertaken  by many
African countries in response to the crisis.

A.  The African Economic Crisis in Context
The  nature  and  the  causes  of  the  current  crisis  have  been  extensively
discussed in paper after paper, conference after conference, especially within
the last five years. It is, therefore, unnecessary to analyse in any detail here the
specifics of the crisis. For the purpose of setting the scene for a discussion of
the political implications of recent adjustment measures, however, it would be
useful to set out briefly the principal aspects of the crisis.

For  the  sake  of  convenience,  the  discussion  will  be  focussed  on  the
economies  of  the  countries  of  Sub-Saharan  Africa  (SSA),  excluding  the
Republic of South Africa. This focus, while difficult  to justify  scientifically,
enables us to concentrate on a relatively homogenous category of countries
and thereby simplify the argument and its presentation.

Set out below are the most critical manifestations of the African crisis as it

shows up in the economies of individual countries.

a) Among the more obvious of the manifestations of the crisis has been a
steep decline in the quality of life of an increasingly large proportion of the
population in the affected countries. This shows up in the reduced availability
and/or the increased cost of food and such social services as education and
health. Technically, this decline in the quality of life can be demonstrated from
the  indices  relating  to  health,  sanitation,  nutritional  status,  infant/child
mortality,  school  enrolment,  access  to  portable  water,  etc.  Also  easily
observed  is  the  rise  in  unemployment  and  under-employment,  as  new

THE POLITICS OF ADJUSTMENT POLICY 3

immigrants to the urban areas and school leavers find it increasingly  difficult
to secure remunerative employment.

b) There has been a marked decline in the rate of growth in all sectors of
the national economy. As observed by the World Bank, "The average annual
GDP growth rate for low-income Africa declined by 2,7% during 1970-80, to
0,7% in 1982 and reached a record low of 0,2% in 1983" (World Development
Report 1986, p.24).  This was accompanied by decreases in the average income
per  capita  (Table  1),  as  well  as  the  average  per  capita  food  production
(Sutcliffe,  1986,  p.22). The  result  is  that  food  self-sufficiency  in  SSA  has
dropped from 98% in 1960 to 8% in 1986 {South, Aug. 1986, p.112), and "today
one out of every five Africans depends for his or her survival on food imports,
about 25% of which is provided by food aid" {Submission, 1986, para 16).

c) Local manufacturing  industry has been stagnant, when not in a state of
collapse. The  economy  has become  steadily  "de-industrialised"  as  capacity
utilisation of industrial plant has fallen below economic levels, and the indices
of the growth of industrial production read low or negative (Table 2).

d) There has been a sharp deterioration  in the foreign  exchange  position
of the national economy. This is the result of the collapse of the export earnings
of the region and the failure  as well of financial inflows - grants, credits and
investments - to make up the difference. Particularly noticeable has been the
decline in export credits and private inflows, which combined, fell from a 1979
high  of  $6,9 billion  to  a  low of  $0,5 billion  in  1984, and  was  provisionally
estimated at $2,8 billion in 1986 (Table 3). It has been estimated that for Africa,
"net resources flows from all sources declined by 28 percent between 1980 and
1984, while . ..  ODA flows declined by about 9 percent". (Submission, 1986,
para. 32). The consequence of these movements has been a decline in the level
of imports per capita, and the growing burden of external debt.

e)  Efforts  to  eke a living out  of the land  and  the  forests  have led  to  the
increasing  degradation  of  the  natural  environment.  The  effect  has  been  to
reduce even further the capacity of the environment to sustain production and
life.

f) The deterioration in the political arrangements for  the management of
society is a further  result of the crisis. This is reflected  in a chronic instability
in  the  national  political  infrastructure  which  therefore  tends  towards
authoritarianism and repression, creating conditions for continued instability.
Moreover, the deterioration of the political and economic environment tends
:o exacerbate class splits and encourage ethnic politics.

The general effect of the factors described above, some of which will receive
nore extended treatment later, is a political economy within which investment
evels are too low even to maintain or rehabilitate existing production capacity,
alone develop it, and in which political and governmental  arrangements
nhibit  the  full  mobilisation  of  national  human  resources  in  the  drive  for
urvival and development. In consequence, the economy is left  vulnerable to
very natural  calamity as well as the vagaries of the international  economic
nvironment.

4 AKILAGPA SAWYERR

When one turns to the causes of the crisis, some very difficult  problems of
distinction between causes and effects  emerge. To avoid the worst  of  these
problems, we set out in  simple terms what can be considered  the principal
causes, remote as well as immediate, of the crisis.

The major causes of the crisis lie in the very structure of the economies of
African countries. As it has been well put, "Lack of structural  transformation
and the low level of productivity of the African economies are the fundamental
causes of their continued under-development and persisting economic crisis".
(Submission, 1986, para. 20).

To enable us to grasp the full import of this observation, it is necessary to
paint in the political/economic context - national, regional and international -
within which the African  economies operate. This context is defined  by the
colonial  experience,  the  international  relationships  that  were  established
thereby, and the relationship of both to the domestic and external  economic
structures.

Inspite of the variety of historical experiences of the countries of SS A they
have a number of important characteristics in common. With the exception of
Liberia and Ethiopia, all these countries were subjected to formal colonialism
during the  first  half  of  the  twentieth  century.  In  the  case  of  Liberia  and
Ethiopia, despite their formal independence, the subjection of their political
economy to external political and economic domination was as thorough as
that of the formal colonies, and they can for this purpose be considered in the
same light.

As is well known, the objective of the colonial experience was to re-order
the social, political and economic structures within each colony in such a way
as to integrate the colony into the world capitalist system. This was done by
aligning  the  dynamic  sectors  of  each  economy  with  the  interests  of  the
dominant classes in the metropolitan countries, and creating within the colony
the  political  and  social  conditions  necessary  to  sustain  and  reproduce  the
relationship  established  under  the  colonial  system. So  successful  was  this
process that the termination of formal  colonialism nowhere led to  a radical
change  in  the  relationship  between  former  colonies  and  metropolitan
interests, at least at the level of the economy.

The legacy of the colonial period can for present purposes be summed up

as follows:
(a)  political  power  is  vested  in  an  alliance  of  social  classes  with  no
fundamental interest in the transformation of the local political economy
and a break from domination by metropolitan interests;

(b)  given its untransformed structures, and because of its one-sided external
orientation,  the  economy  tends  to  work  itself  more  closely  into  the
international capitalist order, but in a position of subordination;

(c)  the majority  of people, the principal victims of the continuation  of the
colonial  economic  relations, are  effectively  disenfranchised  and  thus
disabled from moving to effect the necessary  transformations;

THE POLITICS OF ADJUSTMENT POLICY 5

(d)  the  colonial  economies  are  individually  linked  to  the  metropolitan
economies in such a way as to preclude genuine regional or sub-regional
integration - a situation which persists, inspite of the good intentions, the
rhetoric, the many meetings and the formal institutions for co-operation
set up throughout SSA.

The picture presented by independent Africa is thus one of an unintegrated
collection  of  non-industrialised,  undemocratic,  non-self-sustaining  and
dependent states, with little clout in international economic affairs.  It is this
situation that explains why Africa as a region has remained directly vulnerable
to world capitalist recessions but in no position to affect  policy or practice at
that level.  '

This  summary  represents  only  a  slight  over-simplification  of  the  brutal
reality of the political economy of Africa. Failure to grasp this fully, at least as
a starting point, will mean a failure to appreciate and begin to deal realistically
with the current crisis. For the timing of the crisis is intimately connected  to
this subjection  of African  economies to one-sided determination by external
events.

With the collapse of the generalised boom in the world economy following
the Korean War, Western economies have been experiencing a succession of
worsening economic shocks. These have stretched out into a long-run crisis,
especially following  the oil crises of  1973,1974-and  1979. The  consequence
has been  a severe reduction  in the growth  rates in all Western  economies,
especially in the 1980s (see Table 2), creating a situation of very weak demand
for commodities of export interest to SSA economies. As a result, real prices
of primary commodities other  than  oil stand  at  their  lowest level since  the
Great Depression (Trade and Development,-1986,11), causing Africa  foreign
exchange losses amounting to some US$13,8 billion over the period 1980-83.
(Submission, 1986, para. 29).

Compounding these decreases in the export earnings of African countries,
inflation in the Western industrialised economies has been passed on to Africa
in  the  form  of  constantly  increasing  prices  of  items  of  import  interest  to
African economies. Given the dependence of these economies on their export
earnings, and the dependence of most of their industry on imported  inputs
and  capital,  this  development  would,  by  itself,  have  had  disastrous
consequences for production and consumption in the SSA countries. To make
matters  worse,  the  difficulties  experienced  in  the  Western  industrialised
economies led to a sharp drop in private capital flows (see Table 3). The overall
effect  of all these movements in the export  earnings and capital inflows  has
been  a  drastic  reduction  in  the  import  capacity  of  African  countries  and
therefore their capacity to extricate themselves from the current crisis.5

These  structure-determined  features  were  aggravated  by specific  policy
measures adopted in the Western capitalist economies. Those policies, often
ill-defined  and  contradictory,  contributed  to  the  drastic  slowing  down  of
economic  growth  in  some  leading  industrialised  countries  and  hence  the
generally  depressed  conditions  in  the  African  countries  (Westlake,  1987,

6 AKILAGPA SAWYERR

40-41). One could mention the impact of U.S. interest rate policy on the debts
payable by African countries6; exchange rate fluctuations which led to serious
instability  and  overall  loss  in  the  foreign  exchange  holdings  of  African
countries; and the deteriorating terms of borrowing, with commercial banks
imposing  ever  harsher  terms  and  generally  reducing  credit  to  African
countries. In the face of such evidence, it is difficult  to escape the conclusion
that  these  structural  and  policy  movements  in  the  leading  Western
industrialised  countries  are  the  principal  causes  of  the  problems  in  the
economies of SSA countries.

While these factors  constitute the long-term  causes, it is their  conjucture
with other more immediate causes that has often  determined  the timing and
extent of the crisis in any particular  country. Among such factors  have been
natural disasters like drought, floods and cyclones, and man-made  disasters
like civil wars and the destabilising efforts  of external powers. Though these
have undoubtedly contributed, sometimes dramatically, to the current crisis,
it needs to be emphasised that they were aggravating rather than  fundamental
causes, as can be seen from the fact that several countries affected  by the crisis
could claim no such excuses.

In  addition  to  constituting  the  fundamental  causes,  external  factors

account, to a large extent, for the incidents of the crisis. Thus:
(a)  dependence on the export of a limited number of primary products and
the  importation  of  critical  inputs,  over  whose  prices  Africa  has  no
control, means that the terms of trade between Africa  and the Western
industrialised  countries  lie  totally  beyond  the  control  of  African
countries;

(b)  the deterioration in the terms of trade, and the reduction in the financial
inflows, lead to a reduction in the capacity of African countries to import
food  and  needed  industrial  inputs,  which  in  turn  contributes  to  the
collapse of local production  and  employment  generally  - all  of this in
turn fuelling inflation and balance of payments problems;

(c)  these  developments  leave  the  African  economies  so  little  room  to
manoeuvre  that  they  become  prey  to  natural  as  well  as  man-made
calamities, and create conditions of social and political instability which
are conducive neither to the mobilisation of local resources, human and
material, nor to the productivity increases, which together  provide  the
basis upon which alone Africa can work and earn its way out of crisis.
In  the  light  of  these  observations,  it  should  be  clear  that  no  sustained
resolution of the current African crisis is conceivable unless it addresses at the
same  time  the  roots  of  the  crisis in  the  international  capitalist  order.  The
argument is not that the ending of the recession in the Western  industrialised
countries would bring Africa back to something like its conditions in the boom
years of the 1960s and the early 1970s. The fundamental causes of crisis would
remain, rendering Africa vulnerable to future bouts of crisis caused by external
events. What is called for is a radical reshaping of African  economies, which
can only occur  in the context of a fundamentally  restructured  international

THE POLITICS OF ADJUSTMENT POLICY 7

economic order, or the  effective  de-linking of African  economies  from  the
existing order.

The idea of a radically restructured international economic order has been
under discussion, at least as far back as the end of the 1960s, reaching a climax
in the resolutions of the United Nations General Assembly and the UNCTAD
in the 1973-1977 period. The failure of the proposals for the establishment of
the New International Economic Order was not unpredictable (Sawyerr, 1984,
300-301). It is doubtful  if the prospects for such a new order are any brighter
now than they were a decade ago.

Turning to the notion of de-linking, it has received considerable attention,
mainly among academic and political theorists, not only in the Third  World
but also elsewhere. Somehow the notion has never been treated as a serious
option because the political  and economic pre-conditions  for  its realisation
have always been found too much for the existing order.

B. Tlie Lagos Plan of Action, APPER  and  UN-PAAERD
Africa  has  not  been  slow to  acknowledge  the  crisis  and  take  collective
counsel on how to deal with it. In 1980, the OAU convened a summit meeting
of African  Heads  of  State  and  of  Government  to  consider  exclusively  the
economic problems  then  gathering  momentum. The meeting  lamented  the
African  condition, provided  a diagnosis of the problems, and prescribed  an
action plan for dealing with them. This was set out in the "Lagos Plan of Action
for  the Economic  Development  of Africa,  1980-2000" and  the  Final Act of
Lagos, simply referred  to as the Lagos Plan of Action (LPA).

The LPA included detailed analyses and prescriptions in respect  of food,
agriculture, technology and industry, etc., which it was intended should help
African  countries  achieve  self-sustaining  development  by  the  end  of  the
century. The essence of the prescriptions can best be captured by reference
to the basic principles which were to guide the implementation  of the LPA.
These, as set out in the Preamble, run as follows:

(i)  Africa's  huge resources must be applied principally to meet the needs

and purposes of its people;

(ii)  Africa's almost total reliance on the export of raw materials must change.
Rather,  Africa's  development  and  growth  must  be  based  on  a
combination  of  Africa's  considerable  natural  resources,  her
entrepreneurial,  managerial  and  technical  resources  and  her  markets
(restructured  and  expanded),  to  serve  her  people. Africa,  therefore,
must  map  out  its  own  strategy  for  development  and  must  vigorously
pursue its implementation.

(iii)  Africa  must cultivate the virtue of self-reliance. This is not to say that
the  continent  should  totally  cut  itself  off  from  outside  contributions.
However, these outside contributions should only supplement our own
effort:  they should not be the mainstay of our development;

8 AKILAGPA SAWYERR

(iv)  as a consequence of the need for  increased  self-reliance,  Africa  must
mobilise her entire human and material resources for her  development;
(v)  each  of  our  States  must  pursue  all-embracing  economic,  social  and
cultural  activities which will mobilise the  strength  of  the  country as a
whole and ensure that both the efforts put into and the benefits  derived
from development are equitably shared;

(vi)  efforts  towards  African  economic  integration  must  be  pursued  with
renewed determination in order to create a continent-wide  framework
for the much needed economic co-operation for development based on
collective self-reliance (LPA, 1980,8-9).

The promulgation  of this plan was followed by the Sahelian drought  and
famine, which struck with unimaginable virulence, peaking in 1983/84. At the
time there was a general feeling that the very physical survival of millions of
Africans and, indeed, the very basis of several African countries, was in severe
jeopardy. In addition to the emergency relief measures undertaken by Africa
and the international community, an OAU summit, devoted primarily to the
discussion of  the African  economic  crisis, was convened  in July  1985. The
specific purpose this time was to prepare a position to be presented to a special
session of the General Assembly of the United Nations, which was to consider
and take action on Africa's economic and social problems.

The  Addis  Ababa  summit  produced  a  document,  Africa's  Priority

Programme for Economic Recovery 1986-1990 (APPER), in which the African
leaders noted that five years after the adoption of the LPA, little progress had
been  made  in  its  implementation.  They  took  note  of  the  obstacles  and
constraints  which  were  considered  primarily  responsible  for  this  failure.
Among these were:
(a)  failure to restructure the inherited colonial economies;
(b)  the  deepening  of  dependency  through  the  misallocation  of  domestic
resources and over-reliance on external human and financial resources;
(c)  the  intervention  of  unforeseen  factors  such  as  drought,  accelerated
desertification, cyclones and South African destabilization, especially in
the Frontline States; and

(d)  the  "very slow" development  of  co-operation  and  integration  in  new

sub-regional groupings.

It is clear that some of these constraints or short-comings can, and should be,
remedied by African  countries themselves,  while others are beyond  their
control and may thus call for concerted international action. In any case, the
implementation of the Lagos Plan of Action  in the years ahead will remain a
challenge which requires consistently conscious action and  vigilance on the
part of individual African countries and collectively.  (APPER,  1985,  13-14)

The burden of the documents which emerged from this summit and which
were submitted to the UN General Assembly for consideration in June 1986
was an acknowledgement by African leaders of Africa's share of the blame for

THE POLITICS OF ADJUSTMENT POLICY 9

the parlous condition of the continent and the proposal of action programmes
to  deal  with  it; Africa's  appreciation  for  the  relief  effort  mounted  by  the
international community to help  alleviate the famine, etc.; and a call to  the
international community to go beyond emergency relief and to contribute to
the  long-term  resolution  of  the  African  crisis.  It  was  emphasised  that
international  action  was  needed  to  ease  the  crushing  burden  of  Africa's
external debt and to improve the outlook for the export earnings of  African
countries by stabilizing and increasing the prices paid for their exports, as well
as by allowing them greater access to the markets of the developed countries
(Submission, 1986, para. 47).

The result of the UN session convened to consider the African crisis was a
"compact" between Africa  and  the  international  community  set  out  in  the
United Nations  Programme of Action  for  African  Economic  Recovery and
Development, 1986-1990 (UN-PAAERD).

The position thus taken by the African  Heads of State in Africa's  Priority
Programme for Economic Recovery (APPER) and her submission to the UN
General Assembly in 1986, while affirming  the basic objectives  of the LPA,
lacked the latter's confident insistence on collective self-reliance. No doubt in
response to the deterioration of the situation since 1980, attention was more
narrowly focussed on the priority areas, and the limitations of any action taken
by the African countries on their own were frankly acknowledged. Hence the
appeal  to  the  international  community  through  a  UN  General  Assembly
discussion, and the compact between Africa and the international community
for joint action towards the resolution of the crisis.

C. Adjustment Measures
At the same time that they were making these formal pronouncements and
proposals at regional and sub-regional meetings, individual African  countries
were  instituting  programmes  for  the  rehabilitation/development  of  their
national economies. The majority of these have taken the form of structural
adjustment programmes (SAPs), to which we now turn.

The technical details  of SAPs as well as accounts of  particular  national
instances,  have been  extensively  discussed  in  the  literature  and  at  several
recent  conferences.  Moreover,  the  country  papers  commissioned  for  the
present conference will, I am sure, throw more light on the subject than I could
possibly do in this paper. I shall, therefore, attempt but a brief outline of the
main features of SAPs to provide the background to my discussion of some of
the political implications of SAPs.

A distinction is sometimes drawn between SAPs formulated under the aegis
of  the  IMF/World  Bank,  and  other  adjustment  programmes.  This  is  a
distinction we consider to be without much difference, except that in the case
of the IMF/World Bank-sponsored  programmes in SSA, there is the  added
benefit  of special access to financial  flows from  these institutions and other
bilateral and multilateral sources.

10 AKILAGPA SAWYERR

It  is  undoubtedly  the  case that  structural  adjustment  measures  recently
undertaken  by SSA countries  are  similar  in  all essentials. This  is no  mere
coincidence.  It  stems  primarily  from  the  fact,  already  noted,  that  the
economies of all these  countries  occupy objectively similar  positions  in  the
world capitalist economic dispensation. So long as an underdeveloped country
remains within that order, the basic choices open to it remain much the same.
For instance, any attempt  to raise bank credit  during the crisis or to secure
investments from  any part  of the  capitalist  world is likely to be  met  by the
demand that the country first conclude an arrangement with the IMF. Even if
this were not the case and a country attempted to proceed without  recourse
to the IMF, the structural location of the economy of that country within the
international  order  would  restrict  its choices  in responding  to  the crisis  to
measures of the same sort as would be imposed under an IMF/World  Bank
regime.

The claim is sometimes made by some SSA countries  that the  particular
adjustment  measures they have adopted are "indigenous", either in the sense
that they had been concluded independently of the IMF/World Bank  or that
they were the outcome of hard bargaining on the part of the SSA negotiators
While this may provide a psychological boost  to SSA leaders  or salve their
consciences, and while there may be short-term local variations, the claim is
of very little consequence.  Our discussion will, therefore, make no distinction
between IMF/World Bank and other SAPs.

The  essence  of  the  SAPs  adopted  by  countries  in  the  SSA  is  the
reduction/removal  of  direct  state  intervention  in  the  productive  and
distributive sectors of the economy, restricting the state to the creation  mainly
through  the  manipulation  of  fiscal  and  monetary  instruments  of  an
institutional and policy framework  conducive to the mobilisation  of private
enterprise  and  initiative. This, it  is believed, would  give freer  play  to  both
internal and external market forces and provide the appropriate engine for a
resumption of economic growth and development.

Within  this  very  broad  theme,  adjustment  measures  adopted  by  SSA

countries mclude measures on some or all of the following:

(a) Public Expenditure: Steps  are  taken  to reduce  public borrowing  and
budget deficits by means of expenditure cuts and ceilings, as well as to  shift
the pattern of public investment towards the export sector. Moreover  public
service emolument expenditure is contained by the retrenchment of staff and
a general restraint on salary and wage increases, in some cases, actual salary
and  wage  cuts.  Finally,  subsidies  for  the  provision  of  public  services  are
reduced or removed through the generalisation of cost recovery programmes
(b)  Domestic  Savings: A  package  of  measures  intended  to  increase
domestic savings is introduced, among them the manipulation of interest rate
policy and income tax reforms to put more money in the hands of those likelv
y
to save or invest their surpluses. 

(^"Rationalisation" ofthe State-Owned Sector of the Economy: The object
here is to reduce state ownership and  control  of economic  activities  to  the

THE POLITICS OF ADJUSTMENT POLICY 11

barest  minimum,  and  to  make  surviving  state-owned  enterprises  more
profit-oriented and less protected and subsidised. To this end profitable state
enterprises  are to be sold off,  or private parties invited to buy in, the latter
usually  taking  up  management  control  as  well.  As  to  "unprofitable"
enterprises, they are to be liquidated altogether, or, if of strategic importance,
"rationalised" by retrenchment  of employees, severe reduction in real wages
and upgrading of the quality of management. In addition they are to charge
economic  rates  for  their  services,  thereby  working  themselves  off  state
budgetary subventions.

(d) Liberalisation of  the  Economy:  In  a  sense  the  measures  considered
above are all aspects of liberalisation, which aims at allowing greater play to
the forces of the market. Our concern here is with:

(i)  the removal of state controls on the determination of the value of the
national currency (resulting almost invariably in its steep devaluation
as against foreign currencies);

(ii)  the  removal  of  exchange  controls,  thereby  subjecting  the  external

payments situation to market determination; and

(iii)  the  removal  of  curbs  on imports, prices  and  distribution  within  the

economy.

The  broad  justification  for  this  last  set  of  measures  is  that

market-determination will lead to the most efficient  allocation of productive
resources.

(e)  Export  Promotion:  To  deal  with  the  chronic  shortage  of  foreign
exchange, an export  drive is vigorously undertaken. Thus in addition to the
shifting  of resources  into the export  sector, there is often  a substantial  real
increase in the producer price of export products, as well as the strengthening
of special arrangements  to enable exporters  to retain  a proportion  of their
export  earnings  in  off-shore  "retention  accounts".  This  is  furthered  by  a
liberalisation of the uses to which such accounts may be put, e.g. the payment
of dividends and trade bills and the purchase of machinery and spare parts.
(f)  Promotion  of  Foreign  Private Investment:  This  often  involves  the
promulgation of investment codes setting out extensive concessions to foreign
investors.  In  addition  to  these  concessions,  subsidies  and  protection  for
indigenous industry are often eroded in order to reduce its competitive edge
over  foreign  investments.  Finally,  a  general  programme  of  wage  restraint
within the economy is more or less actively pursued in order to reduce the cost
of  doing  business  locally  and  thereby  increase  the  returns  to  foreign
investment.

It will be noted that there is no reference  in all this to a specific push  for
industrialisation, nor is there any indication of an industrialisation strategy. In
the typical adjustment  programme this is either because the condition of the
economy is considered  too  desperate  even  to think  of  industrialisation,  or
because it is assumed that market forces and the investment  concessions'will
lead to the setting up of "appropriate" industry. None of this can stand up to
analysis, since the measures introduced tend to favour the old-style extractive

12 AKILAGPA SAWYERR

industries  and  work  against  the  establishment  of  locally-sourced
manufacturing  industry.  For  instance,  most  of  the  heavy  infrastructural
development  is  focussed  on  agriculture,  mining  and  primary  export
production  generally.  Again,  the  focus  on  demand  management  and  a
low-wage regime deprive local industry of the effective demand without which
it cannot survive, let alone thrive, even as the open-door policy exposes such
local  industry  as  survives  to  crippling  competition  from  foreign  imports,
especially of finished consumer goods. The problems of local  manufacturers
are compounded by the general credit squeeze which deprives them of easy
access  to  working  capital.  As  the  SAP  continues,  therefore,  many  local
manufacturers are forced to fold up or be absorbed by foreign "partners".

Similarly, there is no effort  to fashion  a coherent agrarian policy that will
lead  not  only  to  increases  in  rural  incomes,  but  also  to  the  necessary
complementarity between rural production and industrialisation. Again, mere
increases in the producer price of food products cannot substitute for  reforms
of rural ownership structures and technical supports that will be necessary to
support a self-sustaining and industrialising domestic economy.

It should be clear from the foregoing that, in general, the nature of the SAP

measures is such that:
(a)  each  African  country  acts  individually  in  its  dealings  with  the
international financial and donor community, whether at the bilateral or
the multilateral level;

(b)  the measures tend towards the reproduction of the existing conditions,
especially  the  dependence  on  external  financial  flows,  the  extreme
external orientation of production and trade, and the non-integration of
the domestic economy; and

(c)  there is a failure to mobilise all domestic resources, material and human,

in the drive for true development.

When it is recalled that a significant element, particularly in the LPA, was
the insistence on an approach to the crisis which demands of the African States
collective action, on the basis of self-reliance, with a view to self-sustaining, i.e.
non-dependent development, there emerges a major  contradiction  between
the objectives of the LPA, APPER and UN-PAAERD, on the one hand, and,
on the other hand, the nature of the SAPs adopted by African  countries in
their attempt to resolve the crisis.

The  following  questions,  therefore,  need  to  be  asked:  given  existing
conditions  and  trends  both  international  and  national, what  would  be  the
shape  of  a  fully  "structurally  adjusted"  African  country?  Would  it  be  a
fully-integrated,  self-reliant,  self-sustaining  and developing economy, as the
LPA and the APPER  envision, or would it continue to be a  disarticulated,
dependent, externally-dominated and regionally unintegrated economy? It is
difficult  to avoid the conclusion that the specifics of the SAPs and trends in
the international environment suggest that a successfully  "adjusted"  African
economy, if  such  were  ever  attained,  w<juld  look  more  like  the  latter  -  a
dependent  economy, than  the former  - a self-reliant  one. On  this view, the

THE POLITICS OF ADJUSTMENT POLICY 13

adjustment measures currently adopted by African countries are likely to lead
to results totally at variance with those envisioned by the LPA and the APPER.
This brings up a further  set of questions: to what extent is the vision of the
LPA and APPER realistic in the present circumstances? Are the  adjustment
measures adopted by African countries not the more realistic, in that they, at
least, address more pragmatically the options realistically available to Africa?
Put  another  way,  given  the  existing  or  any  other  conceivable  capitalist
international  economic  order,  are  the  objectives  of  the  LPA  and  APPER
attainable? Is there not  a disjuncture  between the vision of  fully-integrated,
self-reliant economies and the specific measures proposed, even by the LPA
and APPER, for dealing with the African crisis? Would it be pressing matters
too far  to suggest that, while the spirit  and the origin of current SAPs may
appear inconsistent with the stated objectives of the LPA and the APPER, the
specific SAP measures are not inconsistent with the specific prescriptions of
the LPA and APPER, given the realities of the existing international economic
order? This point will have to be further  developed.

Political Implications of Current  Structural
Adjustment  Policies
A principal  characteristic  of  current  SAPs in SSA countries  is their  direct
dependence on external financial flows usually linked to the IMF/World Bank,
the international private banks and the trans-national corporations (TNCs).
Largely because of this dependence, countries undertaking SAPs are obliged
to surrender  control  over  critical elements  of  national  economic policy  to
external determination. As we have seen, this affects  policy on such matters
as  credit,  public  expenditure  and  wage  levels,  the  value  of  the  national
currency, imports, exports, external payments, investment and the nature and
extent of public ownership within the economy.

The  degree  to  which  external  interests  determine  the  particular  policy
measures adopted by a country depends, obviously, on the specific conditions
under which the adjustment programme is adopted, including the strength and
the political orientation of those in power in the country, the depth of the crisis
affecting  the  local  political  economy,  and  the  prevailing  international
environment.  But  in  all  cases  the  macro-economic  framework  is
fundamentally  conditioned  by  the  external  factors  described  above.  This
determination may take the form of the direct introduction  of a package of
policies into the SSA country or, less directly, of "technical advice" insistently
pressed. It sometimes  comes under the guise of prerequisites  for  obtaining
relief from other  sources. This last occurs where there is direct pressure by
donors or where international.private financial sources such as banks withhold
loans until an appropriate arrangement with the IMF has been concluded by
the country in question.

Whether the external influence takes the direct or indirect form, the result
is a further constriction of the power of the African state to make fundamental

14 AKILAGPA SAWYERR

policy choices. In this connection, particular attention needs to be paid to the
political role played by aid and external debt in such circumstances. Indeed,
in the contemporary world, aid and the debt trap constitute the carrot and the
stick by which the industrialised countries seek to bend Third World countries
to their will.

Lest it be thought that resentment  against this external determination  of
critical elements of the adjustment package within the SSA countries is based
solely on hurt national pride, it must be pointed out that, inspite of the pretence
that the strategies and policies advocated by the IMF/World Bank are the most
efficient  means for the revival and sustenance of African  economies in crisis,
the specific  strategies and policies are not  as neutral  as the  rhetoric  would
suggest.8 This arises from  the very nature of the IMF/World Bank and  their
role in world  economy. The  two institutions,  as well as  other  multilateral
financial  institutions,  are  heavily  dominated  by the  Western  industrialised
states, in particular the U.S.A. Indeed the IMF and the World Bank have been
boldly described as "western capitalist institutions" (Hayter and Watson, 1985,
150). As is only to be expected, those states pursue policies that advance their
national interests, especially as those interests are interpreted by their TNCs
and banks. In consequence, both the ideology that animates the IMF and the
World Bank, and their specific policy prescriptions clearly reflect the interests
of the principal actors, namely the TNCs based in the industrialised countries.
From  the point  of  view of Third  World  countries,  the  relevance  of  this
observation lies in the common interest of the TNCs, their states of origin, and
therefore  the  institutions  dominated  by  those  states,  in  sustaining  and
deepening  the  existing  international  economic  order,  under  which  the
economies of the Third World are subordinated to the interests of the Western
industrialised economies.

This  is  not  to  deny  that  there  are  contradictions,  sometimes  of  major
proportions, between TNCs and between states in the Western industrialised
world. The important issue is the fundamentally  united position dictated by
the objective interests of the principal economic actors in those countries in
their  relations  with  Third  World  countries.  Consequently,  multilateral
financial institutions, as agents of "multilateral imperialism", work to  ensure
that the economies of the Third World are conditioned to "accommodate", i.e.
serve,  the  basis  interests  of  the  Western  industrialised  economies.  This
accommodation takes the form of rendering their labour and resources open
to exploitation in situ, supplying raw materials and other inputs needed by the
Western industrialised economies, and providing markets for their products.
For  this  purpose  it  is  necessary  to  ensure  unimpeded  access  to  the  raw
materials and markets of Third World countries, as well as the uninterrupted
movement of capital into, and profits out of, their economies.

To achieve this in the post-independence era, imperialism needs to control
developments within Third World countries, at least to the extent of putting
in place, or keeping in being, mechanisms which reproduce the conditions of
dependence. That way it is able to maintain conditions for  indirect  control

THE POLITICS OF ADJUSTMENT POLICY 15

through the manipulation of economic factors. In this regard, the situation of
chronic  shortage  of  foreign  exchange,  food  deficits  and  the  existence  of  a
substantial  external  debt  constitute  an  excellent  basis  for  non-political,
non-military manipulation of political and economic decision-making within
Third World polities, and the continued extraction of surplus value therefrom.
It is important to appreciate that to the extent that this analysis is correct,
the existence of the so-called "debt crisis" in Third World countries is a vital
part  of  the  control  mechanisms  available  to  the  Western  industrialised
countries. It is, therefore, unrealistic to expect those countries to give up these
instruments by helping Third World countries escape from  the food  deficit
and  debt  traps. Neither  food  aid,  "green revolutions", nor  re-scheduling  to
extend the life of existing debt and to alleviate current hardships, conversion
to equity, nor even the occasional waiver of portions of such debt, weaken the
force of this observation. For, the self-interest of the industrialised  countries
demands that Third World countries remain sufficiently  viable to play their
role in the existing international economic order.

It has already been  observed that the extent of external determination of
the internal policies of any SSA country depends on several factors. It is the
case, however,  that  whatever  the  other  conditions  may be, the  influence  of
external factors is perhaps greatest in times of crisis within the SSA economies.
It is, therefore, not surprising that even the most resistant African  countries
end up "suing for peace" with the IMF/World Bank.10 Thus as a result of the
desperation  faced  by most SSA countries in the recent past, the leverage of
the IMF and World Bank in Africa has become more pronounced and overt11,
and the character of adjustment programmes adopted by these countries has
been more decisively shaped by those institutions.

From  what  we  have  said,  particularly  about  the  domination  of  the
IMF/World Bank by the Western industrialised countries and the role of the
IMF/World  Bank in  the  fashioning  of  adjustment  programmes  in the SSA
countries, one would expect  those programmes to reflect  the basic interests
of  TNCs  based  in  the  industrialised  countries.  Put  another  way,  those
programmes  would  be  biased  towards  the  reinforcement  of  the  colonial
features  of  the  economy  rather  than  the  building  up  of  structures  for
self-sustaining,  self-reliant  national  economic  development  ("Arusha
Initiative", para. 9).

That  this  is  not  merely  dogmatic  posturing  can  be  established  by  an
examination  of  the  adjustment  packages  in  any of  the  SSA  countries.  For
instance,  a  critical  focus  of  almost  all  adjustment  programmes  is  the
restoration of basic infrastructure  allowed to collapse during the years of the
crisis, with  a  very heavy  bias  in  favour  of  infrastructure  related  to  export
production. Thus harbours, railways, trunk roads, etc., have tended to attract
a disproportionate amount of the new public investment. A strong argument
could be made that the restoration of such infrastructure  is indispensable to
economic  recovery  in  any  event.  It  just  happens  that  this  rebuilding  of
infrastructure  tends to reinforce the commitment to, and dependence on, the

16 AKILAGPA SAWYERR

production  of primary commodities  for  export. The  assured  supply of such
inputs certainly benefits the industrialised economies. The benefits to the SSA
countries of increased production of primary commodities for export, are less
clear in the long-run, but even in the short-run, the already low export prices
should give cause for worry.

When one turns to the social sectors, it is noticeable that inspite of the lip
service paid to the need to improve the social sectors of the economy, not much
investment of new capital is made in these sectors. Such investment  as gets
made is of secondary importance, and the procurement methods adopted in
connection therewith, as with the heavy infrastructural investments mentioned
above, invariably involve the importation of finished goods from the Western
industrialised countries.

Another example relates to national policy on the use of foreign exchange.
To  contain  the  perennial  problem  of  acute  shortage  of  foreign  exchange,
almost all Third World countries have introduced measures to control access
to foreign exchange by local residents. The argument for this set of controls is
that it enables the state to allocate its limited foreign  exchange resources to
the  most  productive  sectors  of  the  economy.  Much  fault  can  be,  and  has
undoubtedly been, found  with the administration of such controls. This has
provided  a  convenient  basis  for  a  wholesale  attack  on  such  controls.  The
leadership of this attack by the IMF/World Bank, which espouse an ideology
totally opposed to exchange controls, has little to do with the well-being of
individual Third World economies. It has more to do with the manifest interest
of the TNCs in the free mobility of their capital and the repatriation of their
profits. For this reason, the Articles of Agreement of the IMF provide against
the imposition by its members of any restrictions on international  payments
for "current transactions between members" (Art. l[iv]). It is, therefore, hardly
surprising that among the principal features of adjustment  programmes  are
the  reduction/removal  of  exchange  controls,  the  lifting  of  restrictions  on
imports and the free repatriation of profits by foreign investors.

What is the likely impact  of the  removal of  such  controls  on  the  use of
foreign  exchange  in  a  country  suffering  from  a  severe  foreign  exchange
shortage? It does not leave much to the imagination. The flight of capital and
the  rampant  importation  of  items  with  the  readiest  and  most  profitable
markets would be the most obvious short-term effects. Were the country able
to procure foreign exchange in sufficient  quantity to meet all the demands on
its foreign exchange resources, it would be possible to permit the market  t6
determine access to foreign  exchange. This would ensure the  most  efficient
allocation  of  national  resources  in  the  medium  to  long-term,  without
sacrificing  essential  but  "unprofitable"  imports.  That  is  the  ostensible
argument for the push against exchange and import controls. Unfortunately,
SSA countries never have access to enough foreign exchange for long enough
to achieve this effect. That, indeed, is part of the essence of the crisis. What
one finds, therefore, is the prolongation of the short-term, capital flight  and
importation of profitable inessentials into the medium and long-term, and the

THE POLITICS OF ADJUSTMENT POLICY 17

continuing shortage of critical manufacturing inputs leading to the contraction
of the economy (Hansohm, 1986,154).

It  can,  therefore,  be  said  that  whatever  the  theoretical  benefits  of  this
liberalisation  of the foreign  exchange position, in the specific  conditions of
Third  World  economies  in  crisis,  the  negative  effects  tend  to  continue
unrelieved  by  the  expected  benefits.  Why,  then,  would  anybody  advocate
liberalisation in this form?  The answer is that whilst the negative effects  are
felt by the majority in the SSA countries, the benefits accrue to interests mainly
outside. Not  surprisingly, it is the representatives  of those outside  interests
and  their  collaborators  within  who  are  the  strongest  advocates  of
liberalisation.

An  illustration  of  this  phenomenon  would  be  in  order.  As  part  of  the
adjustment  programmes,  some  Third  World  countries  have  introduced  a
foreign  exchange  auction  in  order  to  enable  government  to  determine  the
"market  value" of  local  currency,  and  at  the  same  time realise  the  highest
possible local currency returns for its foreign  exchange holdings. In view of
the  overall  shortage  of  foreign  exchange,  however,  the  auction  is  usually
initially limited to the priority import needs of the economy. Thus, for instance,
only holders of import licences may be permitted to bid in the auction. This
ensures that while the bidding is limited to the operators in the priority areas,
the auction permits the most efficient among them - who can, therefore,  afford
to pay the  most  for  the currency - to secure  whatever  foreign  exchange  is
available.

Invariably excluded from the auction, at least to begin with, are imports of
finished consumer goods. But from the outset there is severe pressure on the
SSA  governments  to  include  such  items  in  the  auction,  thereby  enabling
importers of such consumer goods to compete on even terms with importers
of  machinery  and  socially  important  items  like  drugs  and  inputs  into
education. Since it is often the case that finished consumer goods have a ready
market and therefore yield high profits, importers of such goods are able to
mobilise large enough amounts of local currency and to outbid importers  of,
say, drugs or machinery. Moreover, their competition tends to bid up the price
of foreign exchange. This has the following, among other, consequences:
(a)  It  tends to  push the  price  of foreign  exchange beyond  the  capacity of
importers  of  capital  goods and  other  items  essential  to the  industrial
recovery of the economy and the social well-being of the people, thereby
biasing the pattern of imports away from essential items;

(b)  It  tends  to  flood  the  market  with  finished  consumer  goods  thereby
squeezing out local manufacturers  and contributing to the collapse of
local  manufacturing  industry.  In  time  this  contributes  to  making  the
economy even more dependent upon imports for survival.

Why  would  any  government  favour  a  policy  which  squeezes  out  local
manufacturers  at  the  same  time  as  it  reduces  the  availability  of  foreign
currency for essential imports? It would appear from reports of negotiations
with  the  IMF  and  the  World  Bank  that  though  almost  all  Third  World

18 AKILAGPA SAWYERR

countries oppose  the demand  to bring  consumer goods imports within  the
auction, they are ultimately unable to withstand  the pressure. After  all, the
developed  country  governments  also  have  their  constituents  at  home,
particularly the producers of finished consumer goods. Given the recession in
the  industrialised  economies,  the  upkeep  of  production  facilities  and
employment  by those  constituents  often  depends  on  their  securing  export
markets  for  their  products.  As  an  African  delegation  was  recently  told
informally at a meeting in Washington, Western governments were not about
to pump so much of their financial resources into African economies without
ensuring that some of the benefits fell also to their own producers of finished
consumer  goods! What  this cynical  explanation  of  the  real world  position
means is that the Third World countries in crisis have to use part of the money
they  borrow  to  subsidise  factories  and  other  production  units  in  the
industrialised countries. Such is the politics of dependence.

The vulnerability of Third World countries and the pressures exerted by
the  industrialised  countries  directly  or  through  international  financial
institutions  derives  as we have seen  from  the  dependent  location  of  Third
World countries in the world economic order, and the extreme crisis affecting
them.  To  reinforce  this  vulnerability,  industrialised  countries  insist  upon
dealing with Third World  countries individually rather  than  in blocs. Thus,
inspite of the obviously similar problems confronting, say, the SSA countries,
and their attempts to formulate common positions on many economic issues,
the  industrialised  countries  and  their  institutions  invariably  insist  upon
handling these matters on a case by case, country by country, basis.

This is particularly significant in the case of the international debt problem
facing  Third  World  countries.  It  is recognised  that  African  countries,  for
instance, are  affected  in broadly similar  ways by external  debt. They have,
therefore, begun to take common positions on the approach to the debt crisis
(APPER,  1985,  paras.  99-100; Submission,  1986,  paras.  68-75).  Yet  the
industrialised countries still insist that they are only prepared to consider and
apply debt relief measures country by country.

Since it is easier in these bilateral discussions to treat different  countries
differently,  often  in  response  to  neo-economic  factors,  there  is  a  strong
temptation for African countries who expect to get special treatment, to break
rank and divide the front of Africa on this and other issues. The result is that
inspite of the clear desire of African countries, acting through the OAU, ECA
and sub-regional groups, to plan and act in concert in these matters (APPER,
para  100),  Western  industrialised  countries  are  able  to  pressure  them
individually into adjustment  programmes which lock them individually  into
the Western capitalist orbit. This weakens the drive by African  countries to
co-ordinate their attack on the crisis and to link up with other Third  World
countries in a meaningful push for the reshaping of the international economic
order.

We turn now to a consideration of the internal political conditions needed
to push through and sustain the adjustment  measures. We also consider  the

THE POLITICS OF ADJUSTMENT POLICY  19

effects  of these measures, in turn, on the social and political conditions of the
country. The answers must be found not only in the character of the specific
measures but also in their effect  on the various social groups. For whatever
the objectives and potential long-run prospects, a decisive political factor  is
the  short-term  acceptance  of  the  austerity  programme  by  people  in  the
country, whether this "acceptance" be willing or coerced. This can be assessed
in relation to the broad social groups as follows:

(a) The broad mass of working people, covering wage labourers as well as
lower-level employees in both the public and private sectors, are very seriously
hit by the retrenchment exercise which forms a critical part of any adjustment
package. In addition to the large number of layoffs of this category of worker,
the majority of those who remain in employment suffer  from  a widening gap
between the bottom and the top of the wage/salary structure. This increasing
differentiation  is a deliberate policy measure  aimed at increasing incentives
to top executives and professionals, especially in the public service.

(i)  The effect  of this reduced work force  is to create a situation  of fewer
but, on the average, better-paid workers. It also leads to an expansion
of the "petty services sector" - often  no more than  a thinly  disguised
addition to the pool of the unemployed. Unfortunately,  of those who
remain  in employment, even the best-paid, particularly in the public
service,  are  subject  to  a  severe  erosion  of  the  real  value  of  their
earnings.  This  follows  from  the  constantly  escalating  prices  of
essentials, and the astronomic increases in the cost of public services
resulting from  the regime of cost-recovery introduced  as part  of the
adjustment  process.

(ii)  In sum  then, for  the working people market-determination  of prices
and  cost-recovery  for  public  services, lead  to  a  further  drop  in  the
standard of living. Coupled with the constant threat of retrenchment,
and without unemployment benefits, this puts workers in a really grim
situation.

(b)  We  have  noted  the  opening  up  of  the  domestic  market  to  foreign
competition through the removal of protective barriers for local industry, and
the liberalisation of foreign exchange and import policy. We have also referred
to  credit  policy and  restrictions  on money supply,  and  their  effects  on  the
liquidity position  of  local  manufacturing  industry.  The  effect  of  these  and
similar measures is to increase the domestic cost of production  and  cripple
local  manufacturing  industry  by driving  it  increasingly  into  bankruptcy  or
partnership  with  foreign  capital.  These  measures,  therefore,  constitute  a
severe attack on what might be described as the national capitalist class. This
would include  indigenous entrepreneurs  who would normally seek  to bring
under their exclusive control and put to productive use, all national productive
forces, thus becoming indigenous "captains of industry".

(c) When  we turn to the loose category of the  urban  and rural  poor  the

situation is perhaps grimmest of all.

20 AKILAGPA SAWYERR

(i)  The urban  poor  we take  to include  town-dwellers  with  no  access  to
farmland, who, not being in wage employment, engage in small-scale
buying and selling and the provision of petty services. The social and
material  conditions  of  this  category  are  at  all  times  no  better  than
precarious. But this is made unbearable by the deterioration and high
cost of public services. Since they do not dispose of significant money
incomes and are not so placed as to benefit from the prerequisite public
or private office, they sink deeper into poverty and degradation,

(ii)  Grinding  rural  poverty  has  always  been  a  characteristic  of  the
underdeveloped  economy  even  at  the  height  of  commodity  price
booms. This is often  obscured  in the  determination  of  aggregate  or
"average"  rural  incomes,  which  lump  big  landowners,  commercial
farmers  and  rural moneylenders  together  with peasant  farmers  and
landless agricultural  workers  for  the  purpose.  One  of  the  principal
measures undertaken under the adjustment programmes is an increase
in producer  prices. But  the benefits  of  this measure  do  not  always
spread evenly throughout the rural community, the bulk usually going
to  the  better-placed  large  farmers,  transport  owners  and
moneylenders. Thus, while they may not get the full benefit of increases
in producer prices, the rural poor invariably feel the full rigour of the
negative  aspects  of  the  adjustment  process. The  increasing  cost  of
credit, inputs and services like transport weigh heavily on them, while
social services such as education and medical facilities remain beyond
their means.

The poor  in society thus become poorer,  both relatively and  absolutely,
under  the  aqsterity  measures. As  a recent  UNICEF  study  concluded,  "No
adjustment policy is acceptable which allows children to be sacrificed for the
sake  of  financial  stability.  Yet  is  has happened,  and  it  need  not  happen"
(UNICEF, 1987,4) (emphasis supplied).

Clearly  if  these  were  the  only  groups  in  society  there  would  be  little
possibility of  such austerity  measures being introduced  or  maintained.  But
there are social groups that benefit from the introduction of these measures.
These would include;

(a) people in the higher echelons of the public service, who because of the
technocratic thrust of the SAPs, and big people in the party apparatus who
through increased control over patronage, enjoy not only improved  material
conditions from  the new order, but also increased political power and social
prestige;

(b)  top  executives  in  private  business,  especially  businesses  to  do  with
foreign capital, who therefore derive the most from the mini-boom conditions
created by the injection of foreign exchange into the economy;

(c) the comprador  class, embracing a wide variety of occupations -  from
local agents of foreign businesses, partners and consultants to such businesses,
to institutions providing specialised services such as hotel accommodation and
advertising to foreign interests;

THE POLITICS OF ADJUSTMENT POLICY 21

(d)  import  and  export  merchants,  especially  those  able  to  get  foreign

exchange at the official rate, and sell their goods at parallel market prices;

(e) the beneficiaries of the privatization measures, who are able to buy up
or buy into state-owned  enterprises, usually at concessional prices and with
credit easily obtained officially or through the appropriate connections; and
(f) large landowners and bigtime commercial farmers who get the benefit
of  the  producer  prices,  low-wage  policy,  as  well  as  privileged  access  to
state-provided inputs and services.

It thus becomes clear that, at least in the short-run, austerity for the majority
goes hand-in-hand with benefit, in some cases, windfall benefits, to a minority,
who, not infrequently,  indulge in the most conspicuous consumption.

What  are  the  political  implications  of  the  developments  sketched  out

above?

(a)  The poor  and  deteriorating conditions  of the majority  of  the  people
create  a  situation  of  more  or  less  overt  restiveness  and  opposition  to  the
austerity measures. Whatever form such opposition takes, one of its effects is
to isolate the alliance of minority groups who, in concert with foreign interests,
support the programme.

(b) As the austerity measures tend to be opposed by the majority,  usually
spearheaded  by  organised  labour  and  elements  of  the  intelligentsia,  it
becomes necessary for the ruling alliance to:

(i)  move to shut  off  public  discussion  of  the  measures  and  government

policy generally; and

(ii)  put  down  such  opposition  by  the  suppression  of  the  elements
spearheading  opposition, and by outlawing or restricting  strikes and
crushing mass demonstrations, if necessary, by the violent use of state
power.

This has  the  effect  of reinforcing  the development  and  consolidation of
authoritarian  and  repressive  political  forms.  It  is  not  for  nothing  that
representatives  of  Western  capital  stress  the  importance  of  "strong
government", and praise the "political will" and the "courage" of those regimes
able to hold the austerity line. Can they be referring to regimes strong because
they reflect  and  represent  the  collective  will of a politically-conscious  and
committed  people?  Or  to the  political will to resist  domination  by  foreign
interests? Or are they, instead, referring  to strength deriving otherwise than
from  the support  of the mass of the people, backing the "political will" of a
minority to impose and maintain austerity programmes which the majority of
the people would be unlikely to accept, were they .given a say in the matter.

It  is  hardly  surprising  that  military  regimes  and  authoritarian  civilian
governments  -  whether  of  the  one-party,  no-party  or  multi-party  variety  -
provide  the political  conditions  most  conducive  to the  maintenance  of  the
current crop of SAPs in Africa.1

(c) The resulting disenfranchisement  of the majority  and the  shutting-off
of public discussion tend to provide a smokescreen for mismanagement  and
corruption because there is no effective check on the activities of those in high

22 AKILAGPA SAWYERR

office. Moreover, these developments lead to the demoralisation  and  apathy
of  the  mass  of  the  people.  Many  governments  are  surprised  by  this,  and
complain bitterly about how unproductive and lazy the people are. They then
resort to the most strident exhortations to people to produce, sacrifice, show
discipline, loyalty to government or party or country, etc. In a few cases where
the prevailing rhetoric favours "participation", it is noticeable that as soon as
the mass of the people attempt to give meaning to the concept, the state quickly
pulls it back in the supposed interest of discipline, productivity or whatever.
The people promptly revert to the status of supportive, or at any rate silent
and uncomplaining, producers. There is thus no serious attempt to  mobilise
and  motivate  the  mass  of  the  people, lest  they start  asking  questions  and
making demands.

(d)  Particularly  as  a  means  of  counteracting  the  largely  urban-based
opposition to austerity, there is much play on a rural-urban dichotomy, usually
in the form of the allegation that the people in town are "exploiting" the rural
populace. This  notion  of  an  undifferentiated  urban  populace  exploiting an
equally undifferentiated  rural populace clearly flies in the face of observable
fact. Yet it has the merit of helping to divide the disenfranchised  majority of
urban  and  rural  poor  and,  therefore,  at  least  for  a  time,  to  weaken  the
opposition to the austerity measures. This is particularly the case where  the
rhetoric is followed by an increase in investment and services in the rural areas.
This divisive effect  does not last too long, however, mainly because, whatever
benefits come to the countryside usually accrue disproportionately to the rural
rich and absentee owners. The rhetoric, nevertheless, tends to give legitimacy
to rural chauvinism and ethnic politics.

It needs to be emphasised that not all effects of SAPs are so negative, nor
are  all  the  negative  outcomes  the  result  exclusively  of  the  adjustment
programmes. Indeed, the location of most Third World economies within the
international  economic  order,  and  their  internal  economic  and  class
structures,  would  alone  pre-dispose  them  in the  directions  indicated.  The
argument outlined above is simply that the nature of the adjustment  process
hastens them along the path and consolidates the process.

What is usually said in defence of the structural adjustment  programmes is
that without IMF/IBRD support and the financial flows it brings,  adjustment
would be too harsh on the people. On the other hand, if the strategy embodied
in the SAP succeeds, it will generate greater wealth all round, thereby making
it possible to alleviate the sufferings  even of the majority. The problem with
this argument  is that it is difficult  to envisage  a successful  outcome  of  the
programme. In the first place there is no credible strategy for industrialisation
on the basis of the full development and use of local raw materials and skills.
Nor  does  it  create  the  political  and  social  conditions  for  the  effective
motivation,  mobilisation  and  organisation  of  the  whole  nation  behind  the
development drive - indeed, it can be argued that it does the precise opposite,
at least in the short-run.

THE POLITICS OF ADJUSTMENT POLICY 23

Secondly,  financial  flows  on  the  scale  required  are  unlikely  to  be
forthcoming even on the most optimistic assumptions. As estimated by African
leaders, the total resource requirements needed to sustain the APPER  over
the period 1986-1990 amount to $128,1 billion, of which $45,6 billion (35,6%)
must come from outside {Submission, 1986, para. 100).Assuming that  Africa
is able to raise $82,5 billion out of her domestic resources - the record over
the first  two years gives no cause for optimism - what are the chances of her
securing financial  inflows averaging $9,1 billion over and above debt service
obligations conservatively estimated at $14,6 billion (Abuja Statement, 1987,
para. 12) each year for five years?

Even if these resources were mobilised, and the correct industrial policies
followed, without substantial exportation of manufactures, the strategy is sure
to founder. Where are the markets for these manufactured  products: within
the  African  region?  in  other  underdeveloped  countries?  in  the  developed
industrialised countries? Does anyone need to be reminded about the strong
protectionist  pressures  in  those  countries  against  imports  from  the  more
"successful" Third World countries? (Payer, South, Jan., 1987,44)

Even if a few SSA countries could overcome all these handicaps and make
a breakthrough, can anyone expect this to be generalisable at the same time
to other SSA countries? Again, structural change of the sort needed to make
such developments occur  and  continue will take no less than ten  to twenty
years to be fully established. What are the prospects of political stability in any
SSA country holding long enough for this to happen?

Given  these  circumstances,  in  particular,  the  one-sided  dependence  on
international  capitalism,  the stifling  of  productive  national  capital  and  the
failure  to develop industry which would productively absorb surplus  labour
and provide for national needs in the medium to long-term, are we not faced
with prospects of austerity without end?
The future would appear to promise:
(a) The immiseration of increasing numbers of increasing proportions of
the populace without  exciting sustained, effective  and  militant  resistance,15
because of the absence of truly national capital and a developed and organised
working  class  -  the  very  classes  needed  to  spearhead  the  resistance  to
domination by foreign  capital.  But for the reasons given, the economy will
not  develop  because  the  full  development  of  the  productive  forces  is not
possible under the structural adjustment  measures. The crisis will, therefore,
persist. Continuing political instability will result  in the replacement  of one
repressive fragment  of the ruling group or military junta by another - a form
of political musical chairs - with the mass of the people becoming essentially
interested but demoralised observer-victims.

(b) As a decline in productive capacity occurs in one Third World country
after  the  other,  the repercussions for the  international  capitalist  economic
order would become critical. Can the Western industrialised countries move
out of deep recession under conditions of the near-collapse of the Third World
economies? Are we in for a 1930s-type depression, a development which has

24 AKILAGPA SAWYERR

so far been successfully held back by the manipulation of monetary and fiscal
measures, and the shifting  of the burden of recovery on to the Third  World
countries? How can the many contradictions in contemporary capitalism  be
resolved? A Third World War, perhaps?

Adjustment  "With A Human Face"
The account given above of the African  economic crisis and the attempts by
the  SSA  countries  to  resolve  it,  especially  the  impact  of  the  adjustment
measures on the poorer sections of society, makes very sombre reading. In
recognition of this, the question has been posed, both within Africa and by the
international community: can the adjustment measures considered necessary
to resolve the  crisis be carried  out in such  a way as to remove,  or  at  least
minimise, the harshness of its effect  on the people of the SSA countries - in
particular the most vulnerable groups?17

The concern to put a "human face" upon the various SAPs has taken many

forms:

(a) the introduction of special arrangements to cushion the impact of the
adjustment measures on the most vulnerable groups in society - an example is
the introduction of nutritional support programmes for special target groups
such as children under five years old, and lactating and nursing mothers, with
UNICEF playing a very active role;

(b) the expansion of public services and an increase in resource flows into
the  social  services  -  education,  health,  rural  water  and  sanitation,  etc.  -
specially directed at the poorer sections of society;

(c)  "food-for-work"  schemes  aimed  at  putting  unemployed  and
under-employed people, especially the young, to work on projects of special
community value, such as improved water supply, schools, clinics and  feeder
roads; and

(d) schemes aimed at increasing income-generation among lower-income

households.

It is to be noted that the objective of these programmes is to alleviate the
traumas  that  fall  upon  the vulnerable  target  groups  as  a  result  of  the  full
implementation  of  the  SAP  programmes.  These  schemes  are,  therefore,
qualified by the following considerations:

(a) They must be compatible with the ideological and theoretical basis of
SAPs in general,  and  specific  packages  in  each  country.  This poses  some
serious problems. For instance, how do we reconcile the concern to  extend
the social services to the weaker elements in society with the insistence  upon
limiting public spending and ensuring cost-recovery for public services? If the
answer is that this is to be done by redirecting public spending away from  the
privileged and in favour  of the underprivileged, given present political  and
social  alignments  how  promising  are  the  prospects?  To  take  another
example, the notion  of providing  special help  to  retrenched  workers  in  a
situation where the national economy is being effectively  de-industrialised  -

THE POLITICS OF ADJUSTMENT POLICY 25

at best kept industrially stagnant - will require considerable public expenditure
to sustain them and help set them up in new occupations. How does this square
with the drive to cut public spending and remove subsidies and handouts.

(b) The fact of the matter is that the proposals outlined above run counter
to the basic thrust of SAPs, namely, the market-determination  of prices and
allocation  of  resources,  and  the  reduced  role  of  the  state  in  the  specific
management  of  the  economy.  Consequently,  the  measures  aimed  at
ameliorating  the harshness  of the  SAPs must  be  seen  as short-term,  to  be
removed, as the economy "adjusts" and market forces smooth over the rough
edges of the adjusted  economy.

(c) The expectation that the fully "adjusted" economy will have no need for
ameliorating measures of this sort rests on assumptions about the prospects
of  successful  adjustment  and  the  character  of  the  "adjusted"  economy.  In
particular,  it  presupposes  real  growth within  the  economy  combined  with
equitable  distribution  of  the  benefits  of  such  growth.  Even  if  the  correct
policies were adopted and followed  and the appropriate political and social
conditions  maintained  within SSA countries,  it would take  a great  deal of
optimism  to  anticipate  the  attainment  and  maintenance  of  an  adequately
supportive  external  environment  to  ensure  the  development  of  SSA
economies to the point of self-sustaining growth.20 But were one to make that
leap of faith as well, it would still not be realistic to expect SSA countries to
raise themselves from their present depressed and ill-sustaining growth in less
than ten, more likely twenty, years. Some crucial questions, therefore, need to
be answered. Is it possible to maintain the internal political and social stability
required  to  give  the  programmes  time  to  work?  Put  another  way,  what
assurance is there that such growth as is generated will be accompanied by
enough  equity  in  the  distribution  of  its  benefits  to  create  the  conditions
necessary for maintaining the required social cohesion and dynamism? What
political conditions exist, or are in prospect, to enable the genuine mobilisation
of the full range of national talent and human resources needed to sustain a
SAP? Without the development of a strong locally-sustainable industrial base,
what  prospects  are  there  in  any  SSA  country  for  true  development  of  a
self-reliant, self-sustaining economy, sufficiently flexible to withstand  difficult
economic conditions without going into reverse gear? In the absence of such
prospects, is it conceivable that the harshness of the SAP will ever abate?

(d) It should be clear from what has been said Jhroughout the paper that it
would not be enough to adopt  the correct  internal policies nor would it be
possible  to create  and  sustain  the  appropriate  internal  conditions, without
radical  adjustments  of  the  international  environment  within  which  SSA
economies are so deeply embedded. In the restrained language of the 1986
UNCTAD Report:

While the formulation  of  an  adequate long-term strategy for  growth and
development is of critical importance for  any developing country, given the
present international economic  environment a change in  strategy alone is

26 AKILAGPA SAWYERR

unlikely to raise growth rates to the extent required. (Trade and Development,
1986,  136)

Concluding Remarks
The burden of the above comments is not to counsel despair. It is to indicate
that whatever policies are adopted, they should take full account of the very
real limitations of the individual SSA economies, and  should form part  of a
realistic agenda for  the  effective  transformation  of the SSA  economies, no
matter how difficult  the path, or how distant the prospect of success. Unless
the correct agenda is mapped out, the short-term steps could easily be seen
as the unavoidable answer to the problem, rather than what they are, at best,
steps necessary to create the conditions for addressing the fundamental issues.
Against this background, it may be noted that it is possible, even today, for
SSA countries to have greater influence on the terms of their relationship with
international institutions than they do now. We have seen that the position of
SSA countries is weakened in part by the fact that they are  compelled  to to
deal individually with the international community. It is true that this weakness
is recognised  and steps  are  being taken  to remedy it. It  remains  the  case,
however,  that  for  several  reasons  SSA  countries,  like  other  Third  World
countries,  are  unable  to  resist  the  temptation  to  reach  out  for  individual
advantage in their dealings with the Western industrialised countries, rather
than hold out for collective action and collective benefit.

Again, where one  of their  number  makes the  attempt  to  reject  external
dictation,  the  failure  of  support  from  other  Third  World  countries  is
disheartening. The example of Tanzania's effort  to formulate  an  alternative
indigenously-determined adjustment  programme consistent with its national
goals, is instructive both in itself and the conditions for its failure. Much has
been written  about the details of this experience  as well as that  of Jamaica
under Prime Minister Manley. All we would say here is that if more countries
had  taken  a  stand  similar  to  that  of  Tanzania,  and  if  more  Third  World
countries had been prepared to insist that countries in the position of Tanzania
or Jamaica then be not trampled into surrender by the IMF/World Bank and
the donor  community,  a beginning might have been  made in  the battle  for
adjustment programmes that stand any chance of bringing true development
to SSA.

There  are, clearly, major  difficulties  posed  by the political  reality of  the
present  international  economic order  which  stand  in  the  way of  collective
action of the sort suggested above, as distinct from collective pronouncement.
But the argument here is that, as present arrangements fail in one country after
the other,  as conditions  in  individual  countries  and  the  region  as  a  whole
worsen, such collective action would come to be recognised as being no longer
simply desirable, but indeed a condition sine qua non for  true  development.
Fortunately, there are straws in the wind pointing to the increasing realisation
by many countries that this has to be the direction of movement.

THE POLITICS OF ADJUSTMENT POLICY 27

Even  before  we  reach  the  stage  of  such  collective  action,  however,
individual  SSA  countries  could  do  much  better  in  negotiations  with  the
IMF/World Bank and the TNCs. Instead of pretending that SAPs worked out
with  the  IMF/World  Bank  are  their  own  creation,  the  leadership  in  SSA
countries  could  be  more  honest  about  these  programmes,  acknowledging
them as perhaps necessary evils by means of which they expect to be able to
get needed international help. To be sure, this would mean that the regime in
power would have to face vocal and active local opposition to the measures,
but, could we not agreed with President Nyerere that,

when they understand the problems, our people will respond to these economic
challenges as they have responded to other challenges in the past. I believe
they  will  bear the further sacrifices, and further  burdens, which pressing
conditions impose upon us, just as long as they are assured that we are doing
our best to  share the burdens equitably, and  continue to pursue  our own
policies. (Nyerere,  1980, 9) (emphasis supplied).
In sum, where the leadership is able to take the people into its  confidence
because it  is genuinely reflecting their interests and  wishes, there  is  greater
assurance that the sacrifices required for adjustment will be forthcoming from
the majority of the people.

Another  consequence  of  such  openness  about  negotiations  with  the
IMF/World Bank and the investor  community would be that both the Third
World leaders and the international community would be fully aware of the
limits of tolerance of the people who will have to put up with the  proposed
measures. This would put Third World negotiators in a position  somewhat
similar to that of those with whom they are negotiating. For neither the SSA
negotiators nor  the representatives of the IMF/World Bank are ever in any
doubt about the interests and the wishes of the industrialised  countries and
their TNCs. Similar clarity about true SSA positions can only strengthen the
bargaining hand of SSA negotiators vis a vis the IMF/World Bank and  the
investor community.

The point  here  is that- true  democratic discussion  within  SSA countries
about the real options open to them is an indispensable condition for  effective
confrontation  with the IMF/World  Bank (see Abuja  Statement, para. 33 (b)
and  (g)). This  is  because  not  only will  this  help  mobilise  people  for  the
necessary increases in production  and productivity and predispose  them  to
bear the sacrifices, but also because it would bring more fully into the arena
the disenfranchised  majority of the people in most SSA countries, the social
groups best able to sustain a confrontation  with the interests represented by
the IMF/World Bank.

What all this means is that, inspite of well-meant palliatives, the present
adjustment programmes would continue to work unconscionable hardship on
the majority of the people, and still fail to achieve their long-term development
objectives, "without political struggles, within each  country, and between the
peoples  of  the  underdeveloped  world  and  the  ruling  interests  in  the
industrialised capitalist world. It is only in the context of this two-level political

28 AKILAGPA SAWYERR

struggle that  one can  contemplate  the full  emancipation  of  the  peoples of
Sub-Saharan  Africa,  and  the  liberation  of  their  productive  capacity  and
genius, not just from the current crisis, but from  domination by international
capital and an unending cycle of such crises.

Footnotes
1.  By the end of May 1987,28 African countries were implementing SAPs. (Ahuja  Statement,

1987, para. 7).

2.  The latest at the time of writing were (a) "Africa: The Challenge of Economic Recovery and
Accelerated Development", held at Abuja, Nigeria in June 1987 (see "The Abuja  Statement",
1987), (b) "The Impact of IMF and World Bank Policies on the People of Africa", organised
by the Institute For African Alternatives, in London in September, 1987.

3.  For a similar approach see Sutcliffe, 1986,18; and Szentes, 1978,15-17 ("tropical  Africa").
4.  This is true of those countries that have espoused scientific socialism and aligned themselves

with the socialist bloc as of the others.

5.  This is succinctly set out in Submission. 1986, paras. 27-32; Trade and  Development. 1986,

32; Sutcliffe, 1986,19-20; OECD, 1987,8-13.

6.  It has been estimated  that a two-and-half percentage drop in U.S. interest  rates implied a
saving  of  $13  billion  on  the  debt  service  burden  of  developing  countries:  Trade  anr)
Development, 1986, II.

7.  Moreover, it is an open secret that in most cases the draft SAP documents are worked out
and approved by the staff and management of the IMF and/or World Bank, before they are
submitted to officials of the country to which the programme was to be applied for in-depth
discussion. This does not, of course, mean that those officials  make no contribution. But it
does mean that the framework  for the discussion is preset by the IMF/World  Bank.

8.  See "The Arusha Initiative", 1980, para. 8; Girvan, 1980,73.
9.  For useful  accounts see Abdalla, 1980; Harris, 1986, 92-95; and  Hayter and  Watson, 1985,

Chap. 7.

10.  The cases of Jamaica after Prime Minister Manley and Tanzania after President Nyerere are
well-known -  see Manley, 1980,5; Girvan et al., 1980,113 Malima, 1986; and Biermann and
Wagao, 1986.

11.  It is noteworthy that out of  the total IMF credit committed worldwide under stand-by or
extended facilities tied to conditionality, Africa  accounted  for 30% in  1979 and  1980 - the
comparable figure for 1970-78 was 3%: (Harris, 1986,83). Again, the World Bank is reported
to be attempting to raise up to $2 billion per annum to be put  into a special fund  available
only to SSA countries pursuing acceptable  adjustment  programmes: Loxley,  1986, p.101;
Ahuja  Statement, para. 13. On  the general question of  leverage, see Hayter and  Watson'
1985, Chap. 6.

12.  A notable, perhaps pathbreaking, exception is the recent announcement  by Canada that it

was cancelling debts owed it by Francophone and Commonwealth African  countries.

13.  Examples of so-called "IMF/World Bank riots" (Hayter and Watson, 1985,139) abound in
the recent history of Africa: Egypt (1977); Tunisia, Morocco (1984); Sudan, Zambia (1987),
to name but a few.

13A.  Referring  to the development of  repressive regimes throughout  Asia, Africa  and  Latin

America in the course of the 1970s, Frank makes the following observation:
"This repressive political policy has very clear economic purposes and functions  to increase
the competitiveness  of  these economies on  the world  market  by lowering wages and  to
suppress those elements of the local bourgeoisie who are tied to the internal market." (Frank

14.  In its submission to the UN General Assembly in 1986, Africa's leaders could not avoid "the
overall conclusion... that the adjustment packages so far adopted by African countries have
not been particularly successful in realising their overall objectives of restoring internal and
external equilibrium and effecting  a resumption  of steady growth". (Submission para. 109)
The OECD, speaking of financing prospects for the developing countries generally in 1986
observed that "[TJhe light at the end of the tunnel has yet to appear". (OECD, 1986,8)

THE POLITICS OF ADJUSTMENT POLICY 29

15.  The periodic strikes and "bread riots", ferociously put down by the state, do not qualify as

"effective militant resistance".

16.  A panel of representatives of US government and business is reported to have said in 1971

about developments in the Phillipines:
"As Filipino enterprises have grown and moved into new activities, Filipinos and American
businessmen  have become competitive and  the  former  . . . have taken  political  action  to
minimise  the  threat  of  American  competition.  As  the  most  influential  political  group
motivated  to  limit  access  to  Philippine  resources  and  markets,  they  have  provided  a
respectable nucleus around which diverse nationalist elements have coalesced ..."  (quoted
in Bello, et al. 1982,137)

17.  In an address to the UNCTAD, Michel Camdessus, Managing Director of the IMF, had this
to say: "Growth-oriented adjustment  does not have to lower basic human standards. Indeed
... the more programmes give proper weight to social realities - especially their implications
for the poorest - the more successful  they are likely to be." IMF Survey. July 27,1987, 234.
18.  UNICEF reports successful  vaccination  drives in Burkina Faso, Sudan and  Mozambique:

UNICEF. 1987,22,42 and 48.

19.  A notable instance of exactly this redirection  is Indonesia's success in increasing spending
on immunization even while making cuts in overall health spending - mainly by postponing
the building of new hospitals: UNICEF, 1987,4.

20.  UNCTAD  reports  that, "[T]he outlook  for Africa  is far  from  encouraging. Growth  rates
remain at relatively low levels throughout the period [1985-1995], and this was accompanied
by a  substantial  worsening  of all\the  external  financial  variables  . . . The  examination of
regional situations . ..  reveals the potential for the emergence of a debt situation  in Africa
that  can only be  described as alarming". Trade and  Development.  1986, 121-122; see also
Abuja  Statement, para. 8.

21.  The OAU is reported  to be planning a summit meeting on the debt question for December
1987, to keep up the momentum towards an international conference on the whole issue of
Third World indebtedness.

Bibliography

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Development Dialogue. 1980: 2,25.

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(above), 148.

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Growth of GDP per capita for Selected Groups of Developing Countries, 1960-1984

(Annual average of percentage increase over previous year)

Table 1

Developing Countries 

i960- 
1969 

1970^ 
1974 

1975^ 
1979 

198CN 
1984

1980 

1981 

1982 

1983 

1984

By Region
Latin America
North Africa
Other Africa
West Asia
South Asia
East Asia

2,4
3,1
1,6
4,6
1,3
4,0

3,9
2,9
2,9
7,3
-0,9
6,2

2,5
6,1
-0,4
2,4
1,7
6,6

-2,7
-1,0
-4,1
-4,7
2,4
3,3

2,5
2,3
0,4
-6,4
4,7
3,6

-1,8
-3,0
-2,8
-5,6
2,9
4,6

-3,5
-0,5
-2,7
-0,8
0,0
1,5

-4,6
-1,2
-6,2
-8,4
4,6
3,9

0,7
0,7
-4,3
-3,7
2,1
3,8

Sonrce: UNCTAD, Trade and Development Report 1986, p.151

Table 2

Sector Growth Rates, 1965-84

Industry

Country Group

Developing  countries
Low-income  countries
Asia
India
China
Africa
Middle-income  countries
OiJ exporters
Oil  importers
Major exporters of  manufactures
High-income oil  exporters
Industrial  market  economies

1965-73
8.5
8.7
8.8
3,7
12,1
8.1
8,4
8,3
8,5
9,2

5.1

Source: World Bank,  World Development  Report,  J9H6

1973-80

1980-84

6,0
7,3
7,6
5.0
8,6
1,3
5,6
5,2
5,9
6,4
2,9
2,3

2,2
7,7
8,0
4,2
9,3
1,2
0,3
-2,3
1,H
2,1
-10,4
1,0

Net Resource Flows to Sub-Saharan Africa

Table 3

I.

III.
III.

Official  Development
Finance (ODF)
Total Export Credits
Private Flows
Direct Investment
Int. Bank Sector
(including short-term)
Other Private8

Total Resource Flows

(I  +  II  +  III)

Current

Sbillion

Per cent of Total

1979

1981

1983

1984

1985

1986P

8,9
2,0
4,9
1,5

2,0
1,4

10,8
1,9
4,6
1,5

2,0
1,1

11,4
1,1
2,3
0,9

0,5
0,9

12,7
0,2
0,3
0,4

-1,0
0,9

12,9
1,1
2,5
0,3

0,8
1,4

15,9
0,4
2,4
0,4

1,0
0,9

1980

67,7
11,6
20,7
0,6

12,2
7,9

1986P

85,0
2,1
12,8
2,1

5,3
4,8

15,8

17,3

14,8

13,2

16,5

18,7

100,0

100,0

a  Including grants by Non-Governmental Organisations (NGOs).

Provisional

Source: OECD, Financing and External Debt of Developing Countries,  1986 Survey.