The structural adjustment began with the formation of the World Bank and the international monetary fund in the early 1940s. The formation of these institutions was triggered by the 1982 world debt crisis and they were formed to address global financial difficulties in that period (Messkoub, 1992). The World Bank and the International Monetary Fund (IMF) both forced a structural change on the third world countries with an intention of improving their efficiency. The structural adjustment programs influenced government spending and the after effect of the entire process was that the poverty levels increased (Messkoub, 1992).
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After the World War II, there was the formation of a new economic order in Europe to reconstruct and recover from the effects of the war put on the economy (Messkoub, 1992). So many bilateral agreements were developed in order to reduce the cost of trade between nations where the general agreement on taxes and tariffs was the most profound policy (Messkoub, 1992). The World Bank, for instance, was meant to revive the Europe from the world war ravages (Messkoub, 1992). However, the bank changed and focused its energy on development and financing countries. On the other hand, IMF was meant to be the bank that enabled nations to borrow loans.
Although the two banks seem to be playing the same roles, they have very distinct mandates in the financial world. The World Bank lends money solely for development and this is only in the developing countries (Messkoub, 1992). On the other hand, the IMF lends to all nations and mostly for the purpose of monitoring monetary and exchange rate policies in countries (Messkoub, 1992). Structural adjustment in summary makes the states and the market more efficient and as a result, it accelerates financial growth and reduces wasteful practices. When it comes to structural adjustment, the priority is given to the development of a free market (Messkoub, 1992).
This gives rise to the principle of self-governance in the market where each individual is responsible for their own actions (Messkoub, 1992). Structural adjustment has some effects on the people in the states experiencing the structural change. One of the most notable changes is the widening of the economic gap between the rich and the poor while unemployment increases as well. In a brief assumption, it suffices to say that structural adjustment leads to economic inequality. This kind of economic inequality can have adverse effects on the political stability of a country hence leading to wars and unrest (Messkoub, 1992).
Structural adjustment does a number of harms on a state. One of them is a free trade. With a liberal market in place, local products lose in competition with imports while tariffs on water and electricity go high hence making the normal cost of life to escalate (Messkoub, 1992). Structural adjustment has a direct impact on health care systems and this is through cuts in budgetary allocations and privatization of state owned organizations (Messkoub, 1992). It leads to the elimination of food subsidies, lack of job opportunities, poor infrastructure as well as maks it very difficult to access medical attention (Messkoub, 1992).
This paper critically analyses the Deprivation and Structural Adjustment policies as presented by the author of the book. The entire paper shows how the structural adjustment was developed and how it impacted the world. Its effects have also been discussed and outlined in this essay.
Messkoub, M 1992, Deprivation and Structural Adjustment, Oxford University Press, Oxford.