Presenter: Shruti Poornaphani Challa
Faculty Sponsor: Deepika Marya
School: UMass Amherst
Research Area: Globalization and Development
ABSTRACT
Structural Adjustment Programs (SAPs) are a set of policies put in place to help correct trade imbalances and government policy deficits, often enforced when a country seeks a loan from the International Monetary Fund and the World Bank. SAPs, however, have adverse effects on countries’ economies, as patterns of further imbalances are observed, including increased inequality and the loss of resources. SAPs require transparency of the country’s economic data and enforce certain policies through economic reforms, one of which is reducing subsidies or support for the people of these countries. As a result, inequality, violence, and poverty are on the rise. The country’s economic sectors are being opened to foreign markets with liberalization as the goal. Whether enforced on a diverse economy like Kenya or a pastoral economy like Somalia, SAPs have caused these countries’ debts to worsen , pushing them into a debt trap that prevents industrialization and economic growth. To ensure that a country experiences a stable economy, the focus should be shifted to support its people’s needs. Bringing awareness and learning from this process can bring about more efficient ways to help a country’s economy. SAPs standardized are used in various economic structures and often negatively impact country development.