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International Political Economy - Case Study #1 Zambia.

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Introduction

Ernie Gilbert International Political Economy Ken Gilmore Case Study #1 Zambia Beginning in 1992 some 50 countries began implementing International Monetary Fund (IMF) structural adjustment programs (SAP). These programs were designed to help third world countries become more developed and to diversify their economies. When a country can no longer continue borrowing money, adjustment is deemed appropriate and often necessary. Usually the IMF promotes diversification of the nation's economy. This creates a wider base of influence in the global market, hopefully pulling said nation out of debt. The IMF SAPs are designed to help this adjustment take place, but to who's benefit? Consequently these programs have become extremely controversial. Do these SAPs leave their host countries better off? Zambia is one such country. Its results show that the SAPs are ineffective because they do not address specifics, communicate efficiently with themselves, or improve the state's own well-being. Throughout the 70s and late 80s Zambia's main cash export was copper. ...read more.

Middle

In other words these sectors were able to get foreign currency at a flat rate. This again was great in theory but not so beneficial on paper. It was extremely hard to be classified as a critically important sector and one of the most important sectors, agriculture, was not even included. In May 1984, the World Bank created Zambia's Agricultural Rehabilitation Program. Several nations along with the World Bank pledged foreign aid assistance in return for substantive reforms in Zambia's agriculture. This was obviously the first failing of the SAP for Zambia. Its cookie cutter format did not take into account the local economic conditions. The second downside of the SAP was miscommunication. Sector experts were often excluded from participating in the decision-making process. If the IMF wants their SAPs to succeed in the future this issue must be dealt with. Those who are experts in a sector should make the policy for that sector. According to the IMF the role of the Zambian government was to cut spending and get out of the IMF's way. ...read more.

Conclusion

The converse is also true, if those powers to be don't wish the 3rd world nation to succeed then it won't. Such was the case in Zambia. The IMF rode in on a white horse hoping to save the day. However, their program was flawed in two key areas. The SAP did not address specifics in the nation (Zambia) and they didn't communicate effectively within their own organization. In the future a cookie cutter approach to policy cannot work and should not be attempted. Before any SAP goes into action the specifics of the nation's politics, gender issues, local economic condition, and population breakdowns must be taken into consideration. Communication must be an important part of the process. The IMF must work with the nation's government and other international organizations. Any advice must be shared and those experts in an area must help make the policy. If these changes occur then the SAPs will become a more effective policy which can help 3rd world nations develop. Ultimately however the power is with the 1st world countries, if they want a nation to improve it will happen if not well then... ...read more.

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