why the debt should be cancelled : human rights : sap's

Background The main actors Why the debt should be cancelled Human Rights HIV / AIDS SAP's Illegitmate debt How the debt should be cancelled

Some components of STRUCTURAL ADJUSTMENT PROGRAMMES

Currency Devaluation
Eg: before devaluation 1 peso = $ 2
After devaluation 1 peso = $ 1

• Exports become cheaper overseas, in theory this should increase foreign currency earnings ensuring debt repayments. In reality the quantity of exports produced increases, leading to oversupply and a reduction in prices
  
  
• Imports become more expensive
  
  
• Import dependent industries hurt- increasing unemployment
  
  
• Cost of living increases

• Reduction or elimination of import quotas, tariffs/taxes on imports and subsidies or support for local industries.
  
  
• Reduction or elimination of restrictions on foreign investment
  
  
• Exports promoted
  
  
  • The aim is to increase the flow of foreign money and investment and also to increase export earnings to increase debt repayments
    
    
  • Domestic industry unable to compete
    
    
  • Corporate profits are 'repatriated' or sent home
    
    
  • Resources are redirected to export industries (food production can be threatened). Tendency toward big infrastructural investment (roads, dams), prone to corruption with heavy environmental destruction
    
    
  • Promotion of Export Promotion Zones (EPZ), often recruiting young women who are considered docile and hard workers
    
    

• Promoting privatisation: the aim being to reduce government deficit and increase competitiveness by strengthening market forces. In reality this leads to less public control over key sectors of the economy with loss of public sector jobs.
  
  
• Cutbacks in health care and education extra burden on women, children less access to schooling
  
  
• Increase in unemployment, lower wages and increasing poverty