Austerity/Structural Adjustment

Economic policies imposed by the IMF in exchange of new loans or the rescheduling of old loans.

Structural Adjustments policies were enforced in the early 1980 to qualify countries for new loans or for debt rescheduling by the IMF and the World Bank. The requested kind of adjustment aims at ensuring that the country can again service its external debt. Structural adjustment usually combines the following elements : devaluation of the national currency (in order to bring down the prices of exported goods and attract strong currencies), rise in interest rates (in order to attract international capital), reduction of public expenditure (’streamlining’ of public services staff, reduction of budgets devoted to education and the health sector, etc.), massive privatisations, reduction of public subsidies to some companies or products, freezing of salaries (to avoid inflation as a consequence of deflation). These SAPs have not only substantially contributed to higher and higher levels of indebtedness in the affected countries ; they have simultaneously led to higher prices (because of a high VAT rate and of the free market prices) and to a dramatic fall in the income of local populations (as a consequence of rising unemployment and of the dismantling of public services, among other factors).

Is Sri Lanka burdened by ‘odious’ debt?

16 May 2022 - by Akalanka Thilakarathna

The current economic situation in the country can be linked to its political instability. While economic and political instability goes hand in hand, the current dilemma facing the country can be attributed to bad planning and decision making, (...)
Urgent plea by Sri Lankan feminists to address the unfolding humanitarian crisis caused by the economic collapse in Sri Lanka

6 April 2022 - by Collective

Sri Lanka is facing the worst economic crisis in its post-independence history. Widespread food and fuel shortages are crippling the lives of people. Such a situation that has already lasted several weeks is now resulting in widespread protests (...)
Frying Pan of Shortages to the Post-IMF Fire

4 April 2022 - by Ahilan Kadirgamar

The scorching heat in April and May is going to fry our working people as food and medicines are in short supply, oil shortages lead to transport disruption and power cuts shut down shop floors. What does one make of the mismanagement of an (...)
Portugal: Socialists on their own

1 February 2022 - by Michael Roberts

Portugal’s ruling socialists under prime minister, António Costa, achieved a surprising victory in parliamentary elections on Sunday. The Socialists gained an outright majority in the new parliament over all other parties and will be able to rule (...)
Pakistan : Toxic austerity attack comes hot on the heels of a pandemic

31 January 2022 - by Abdul Khaliq

As the IMF executive board met on January 28 to decide on Pakistan`s request for the revival of $6bn Extended Fund Facility (EFF), the government remained optimistic having fulfilled all the five conditions imposed by the global lender to revive (...)
How Austerity Helped to Ignite Greece’s Historic Wildfires

22 August 2021 - by Stelios Foteinopoulos

If Ferdinand Lassalle lived today, he would be able to watch his ideas age badly. In 1862, Lassalle, speaking to a socialist gathering in Berlin, outlined his theory of the night-watchman state – a neoliberal concept whereby the state transfers (...)
What kind of austerity after the Covid crisis?

9 July 2021 - by Eva Betavatzi

The present circumstances seem to rule out – for a time – using public debt considered to be excessive as a pretext for drastic austerity measures. The illusion of having escaped the vicious circle of debt to austerity is reinforced by the (...)
IMF and debt: a new consensus?

16 April 2021 - by Michael Roberts

There is much talk among ‘progressive’ economists that the IMF and the World Bank have turned over a new leaf. Gone are the days of supporting fiscal austerity, demanding that national governments get public debt levels down and insisting on (...)
Migrant Women Are Holding Society Together During This Pandemic

14 April 2021 - by Taroa Zuñiga Silva

The past year has seen several lockdowns as a result of the pandemic, which have had a deep impact on education, employment and the way we work globally. These factors have had an especially stark effect on women. For more than 168 million (...)
Complicity of International Financial Institutions in Violation of Human Rights in the Context of Economic Reforms

30 November 2020 - by Juan Pablo Bohoslavsky

This Article demonstrates that the introduction of austerity measures does not contribute to economic recovery, but instead has negative consequences in terms of economic growth, debt ratios, and equality, and routinely results in a series of (...)
Series: 1944-2020, 76 years of interference from the World Bank and the IMF (Part 25)

The IMF and the World Bank in the time of Coronavirus: the failed campaign for a new image

9 November 2020 - by Eric Toussaint, Emilie Paumard, Milan Rivié

Considering the economic and social tragedy resulting from the structural adjustment policies (SAP) imposed on people in the South from the 1990s onward, several voices have exposed the promoters of such policies, namely the IMF and the World (...)
Agro-imperialism in the time of Covid-19

16 July 2020 - by GRAIN

Nestlé, the world’s largest food company, is known for scandal. It earned the nickname “babykiller” in the 1970s for causing infant illness and death in low-income communities by promoting bottle feeding of its infant formula and discouraging breast (...)
Capitulating to adults

31 May 2020 - by Michael Roberts

During the pandemic lockdown, I have been able to read a range of new economics books, some Marxist but most not. It seems that many leading economists have published new stuff in the last two months. Over the next few weeks, I shall post some (...)
Argentina

Voluntary Termination of Debt

18 May 2020 - by Verónica Gago, Luci Cavallero

The feminist movement in Argentina, and across Latin America, has gained force and strength in recent years. That movement can be characterized not only by its massiveness in terms of the number of people on the streets, but also for how it has (...)
The debt dilemma

11 May 2020 - by Michael Roberts

I have mentioned many times on this blog that rising global debt reduces the ability of capitalist economies to avoid slumps and find quick way to recover (and see ‘Debt Matters’ in my book, The Long Depression and also in World in Crisis). As (...)
Cancel the debt so doctors and nurses can keep saving lives

7 May 2020 - by Collectif

A call for urgent action to support doctors and nurses on the frontlines of the Coronavirus pandemic. We are all health workers, nurses, doctors. Every day we are on the frontline fighting this virus. Every day we are on the wards, in the (...)
Now more than ever, supporting abolition of the debt is a priority!

5 May 2020 - by Brigitte Marti

The covid 19 pandemic has demonstrated that the neoliberal system that leads the world is detrimental to health care systems, public services, and bad for people, especially for the poor and third world populations. We should remind the (...)
The scarring

4 May 2020 - by Michael Roberts

Optimism reigns in global stock markets, particularly in the US. After falling around 30% when the lockdowns to contain COVID-19 virus pandemic were imposed, the US stock market has jumped back 30% in April. Why? Well, for two reasons. The (...)
End the inhumane migratory policies of Fortress Europe

23 April 2020 - by ReCommons Europe

Today we publish the third text of the publication entitled “The impact on the South of European financial policies and development cooperation strategies and possible alternatives”, elaborated in the framework of the ReCommonsEurope project. (...)
World Bank and IMF response to debt crisis undermines women’s rights

10 April 2020 - by Iolanda Fresnillo, Verónica Serafini

Summary Debt crisis continues to unfold in the Global South IMF and World Bank responses cling to austerity and privatisation New gender-sensitive debt resolution framework needed A new debt crisis is unfolding, once again, in the Global (...)
Abolish illegitimate and odious claims by European countries from third parties and give absolute priority to human rights

3 April 2020 - by ReCommons Europe

Phase 2 of the ReCommonsEurope project: “The impact of European financial policies and development cooperation strategies on the South and possible alternatives”. This document is the first of the five texts that form part of the publication (...)
Call of the indigenous peoples, afro-descendants and peoples’ organizations of Latin America

3 April 2020 - by CADTM, Collectif

We publish in English a Latin American and Caribbean appeal launched on 1 April 2020 by a large number of popular movements and political organizations. It calls for a radical response to the crisis linked to COVID-19. This call is supported by (...)
Latin America and the outbreak of COVID-19: a chronicle of multiple crises

31 March 2020 - by María Romero

By María José Romero (Eurodad), Jasmine Gideon (Birkbeck, University of London), Patricia Miranda and Verónica Serafini (Latindadd) The outbreak of COVID-19 is a global health emergency that is likely to trigger a global economic crisis, (...)
Fighting Coronavirus: It’s Time to Invest in Universal Public Health

26 March 2020 - by Isabel Ortiz, Thomas Stubbs

NEW YORK and LONDON, Mar 23 2020 (IPS) - Austerity policies pushed by international financial institutions have weakened public health systems, despite current financial support packages, condemning many people to die. As health systems of (...)
IMF: Inhuman at the micro and macro levels

27 February 2020 - by Eric Toussaint

Hiruni, a fisherman’s wife, who has to manage her household (of five people) with an income of about 2.5 euros (= 500 Sri Lankan rupees) per day, is heavily indebted. In order to increase her household income, she borrowed 50,000 rupees (250 (...)