Structural Adjustment 101; An Interview with Pamela Sparr

Banking on Women: Structural Adjustment 101; An Interview with Pamela Sparr

Banking on Women: Structural Adjustment 101; An Interview with Pamela Sparr

Pamela Sparr is an economist specializing in gender and macroeconomic issues and editor of Mortgaging Women’s Lives, one of the early books on women and structural adjustment. Sparr has worked ten years in the Women’s Division of the United Methodist Church on issues of development, gender and environmental questions. The interview was conducted by Karla Mantilla.

oob: Were you involved in any of the World Bank protests in DC or Seattle?

sparr: Yes, both. I was working with the Women’s Division of the United Methodist Church. The primary location for all the NGO activities in Seattle was the First Seattle United Methodist Church.

oob: I’ve been interested in this topic for some time but there’s not a lot out there about it. It’s so important for women to start to “get” these issues. What is “structural adjustment”? People tend to get brain freeze when they hear those words.

sparr: And it’s certainly not referring to a chiropractor, either, right? [Both laugh.] Structural adjustment policies are a series of policies that typically have been the primary recipes that the World Bank and the International Monetary Fund (“IMF”) have used in their work with highly indebted nations. They have various names – they sometimes are called “neoliberal policies” – but they are all the same set of recipes.

Actually, we in the United States were treated to our own version of this beginning with the presidency of Ronald Reagan. For us it is called “supply side economics.” The British people were treated to their version when Margaret Thatcher came into power. They’re basically the same kind of policies that the IMF has prescribed for countries that were the former Soviet Union, Central, and Eastern Europe. Different regions of the world are experiencing, with some modifications, the same recipe. Although we’re going to talk about the impact on women in the global south, what I think is really important for readers to know is that we’ve had our own variety here in the U.S. with some similar results.

oob: What kinds of policies make up structural adjustment?

sparr: There is a range of policies.

The first set of policies has to do with getting supply and demand and prices “right.” This brings major changes in the economy. Basically it’s a free market recipe. One of the major pieces of a free market economy is that prices are the signals that determine supply and demand, and shape people’s behavior. If you don’t have prices “right,” you get very distorted results according to the theory.

In many countries in the global south, the government subsidizes basic items, such as food, rice, bread, or cooking oil to keep them affordable for poor people. The commodities shift depending on the culture of the people. As you’ve heard recently, in Nigeria there were riots because the government, under World Bank pressure, was removing subsidies from gasoline and people were up in arms because they were used to cheap gas. That’s why the World Bank is saying countries get highly in debt, their budgets escalate, etc.

Another piece is removing caps on things like interest rates or other types of prices. The government installs these caps to ensure that credit is available for certain sectors such as poor people or preferred businesses, but the IMF considersthem a block to the free flow of capital.

A third policy is has to do with devaluing the currency or altering the system of foreign exchange. The World Bank policy is that there should be only one rate for the foreign exchange, which is freely floating so that it rises and falls with the world market. But sometimes, for example, some countries have many different kinds of exchange rates. Let’s say the country has to import a lot of pharmaceuticals. Maybe they’ll make the exchange rate for some goods, what they consider “necessary imports,” more favorable than the exchange rate for luxuries such as cars, as a way to ration hard currency. The World Bank and the IMF would argue that the government needs to unify the exchange rate and shouldn’t be meddling with it.

Another policy is the general philosophy of minimizing the government’s role in shaping the economy. In many countries in the global south, as well as some in the former Soviet Union and Eastern Europe, the government was heavily involved in producing a lot of goods and services, regulations, and providing employment. One of the cornerstones of structural adjustment is racheting the government down. One argument is that governments are bloated – often they are the employer of last resort — so they are employing a lot of people but driving the governments’ budgets too high. Another argument from the people who support free market, is that governments have no business running a state-owned petroleum company or state-owned tourist hotels, for example, because the private sector could do it much better and efficiently. For example, Mexico sold off Aero Mexico, which was the state airline.

So the structural adjustment policies focus on privatizing various functions. Chile privatized the social security system – which the U.S. is also working on. This is one of the first gender points. When Chile privatized the social security system, Bankers Trust bought it and took it over. One of the things that is really important for women, both in our own country and others, is that because of our often disadvantaged positions in terms of employment and earnings, women tend to rely more on social security in their old age than men do. So the ramifications of privatizing social security, whether in Chile or the United States, are really important for women to pay attention to.

oob: Those kinds of parallels are often hidden from people’s view.

sparr: They are. And I think what’s really important for women in the United States to know, is that while the consequences for women in many countries of the south are very devastating and more comprehensive then we experience, there are enough parallels that we can both learn from their experience and also know that we have some common issues and policies that we have to organize around to oppose. When we realize we are common allies, we’ll be far, far ahead.

The third cornerstone of policies is integrating the economy further into the global economy – that is, opening up the country to economic integration and global competition. Often that means devaluing currency, because one of the prime mantras of folks who support structural adjustment policies is that the countries have to grow through exports. If you devalue your exchange rates, it means that your exports will appear cheaper to people in other countries and therefore be more competitive. This is one of the things we as women in the United States have benefited from – a lot of people love to shop and love good bargains. I would hope that we ask what lies behind that because the price on the price tags may not at all reflect the social and environmental consequences of producing a cheap blouse or pair of shoes.

Another piece in terms of foreign trade is removing barriers and reducing or eliminating tariffs (which are taxes that governments charge for incoming goods).

Globalizing the economy also involves bringing countries into the World Trade Organization and various regional agreements. For example, the U.S. is working hard to extend NAFTA to the rest of Latin America. It also involves opening up a country more to foreign investment. Many countries have tried to protect their natural resources or their control over key sectors like utilities, by either saying that certain parts of the economy are off-limits to foreign investors or that foreign investors have to take a minority share, so that control could stay within the country. Nations are being pressured to drop all of that.

Another variation is that often countries have put restrictions on how much capital can be repatriated. For instance if you invest in Cameroon, you can only send out from Cameroon ten percent of your profits to try and encourage reinvestment and keep the wealth in the country.

All of those restrictions are basically eliminated. This can lead to the great problem of foreign investors making a lot of profits and siphoning them out to another country. Therefore, the country that is the site for the foreign investment does not benefit fully from that investment. Sometimes governments actually have employment requirements requiring foreign investors to employ a certain number of local workers. There are some kinds of technology transfer requirements to help investments contribute to the long-term development of the country. All of these requirements are under extreme attack by the World Trade Organization as barriers to trade because the WTO is linking trade and investment.

oob: How does structural adjustment disproportionately impact women?

sparr: I’ll run down a laundry list and then offer some stories and examples to make it easier to understand. We have come across evidence of several different aspects of life that are affected. Here are a couple general statements about ways women are affected.

We have to be careful about generalizing the consequences of structural adjustment for women. There are important differences depending on demographics. While studies are showing that there are many detrimental affects, the impact varies greatly depending on what a woman’s class is – the poor women often get really hard hit. In some instances, the middle class women get hit, because the poor women are so far out of the economy that the economic changes aren’t even touching them very much.

Also the woman’s racial or ethnic group has an influence in terms of social and economic marginalization. Another variable is the household structure – whether the woman is a mother, or married or single. For example, if a woman is married and a policy turns out to affect a husband’s job and he becomes unemployed, then there is a spillover effect in terms of what happens to the woman and the girls in the family in a kind of secondary effect, like a set of dominos. Some policies directly affect women and girls, and sometimes it’s more of a trickle-down effect.

We also have found examples where the age of the woman was a big factor.

oob: What are the consequences for women?

sparr: Here are some of the ways women are impacted directly or indirectly by structural adjustment policies.

Increasing numbers of women look for income-generating work. Often when the government institutes adjustments, there is an immediate depressive effect on the economy and some people will lose there jobs. Sometimes it can be by sector. For example, when a country privatizes an industry, many people may lose their jobs. Depending on what sector is hurt, households who had a family member employed in that industry may find their income shrinking because of unemployment. The cost of living may be increasing at the same time. The burden then is on women to have a job outside the home in addition to caring for the household in response to pressure to make up the lost income.

How they do that varies according to the particular situation. In some instances, poor women may try to do more small-scale, informal businesses like starting a tortilla stand by the road. In some countries, women emigrate and become maids in Greece or Germany – so that the family’s financial strategy is to split up and send one or more family members abroad. For instance, in some years in Jamaica, 95 percent of the women graduating nursing school leave the country. In those situations, it’s an incredible brain drain as well. And when an adult leaves, the household structure changes. Sometimes women then become heads of household or don’t see their partners for long periods.

oob: Why is it that women are the ones that leave the country to find work, and not men?

sparr: That’s a good question. It’s not true for all countries. In Mexico, the opposite tends to be true. The men try to get across the U.S. border and become farm workers and the women may be encouraged to go to the maquiladora factories. It’s cultural to some extent. It also depends on who has what kind of skills and what the international market is like in terms of what makes economic sense.

I remember in the days of Corazon Aquino when I was in the Philippines, there were incredible public testimonies by high government officials that all the remittances by the working class and poor women who were abroad as maids, and the middle class women who were abroad as nurses and other professionals, made such an important contribution to keeping the economy afloat – both in terms of individual families but also a very necessary source of foreign exchange. That’s a telling example of how countries are banking on women.

Although the people making these policies say they are based on economics only and are gender-neutral, obviously the effects of the policies are not gender-neutral. It’s important for us as feminists to acknowledge that the consequences touch people at all levels of their lives, not just in their pocketbook. There are lots of ways the policies affect women economically, and also their health, increased domestic violence and malnutrition, women’s social standing in their family and communities, their sense of self, spiritually.

Here’s a case in point. In Sri Lanka, there was a big push to do export-oriented production. Sri Lanka has a vibrant textile industry, with a lot of textile production being done at home on hand looms by women. But in order to produce the quantities required for export, the industry had to be modernized and mechanized. In that process, because of cultural norms, it was assumed that only men could only operate machines. Of course a hand loom is a machine, it’s just more low-tech. Women lost out because when the work was taken outside the home and mechanized, men got the jobs and women lost a traditional source of income.

When government privatizes certain sectors or cuts support for certain sectors like health and education, women are more likely to become unemployed because women are concentrated in them as teachers, clerks, health care providers, nurses, etc. Women have lost doubly in those sectors because when the budget is cut, they lose their jobs and their access to these services may be diminished. For instance, at one point because of cuts, the hospitals in Jamaica eliminated food service. This is an example too of how women’s unpaid work often escalates.

oob: Women had to bring food in to their family members in the hospital three times a day.

sparr: Yes. There are stories of rural women in Africa having to go and be in the hospital with their husbands and missing a whole season of work of planting crops which meant they didn’t have food to feed their families.

oob: How does women’s work change as a result?

When governments try to make their budgets look leaner and healthier, what isn’t on the balance sheet is women’s unpaid work which benefits everyone. Literally governments are balancing their budgets on the backs of women.

Working conditions for women deteriorate and wage differentials grow. One thing I found amazing after our book came out, is that the UN Development Program did a special issue of their Human Development Report which they produce every year on gender. They reported a case study in Mexico that examined the industrial sector during a period of strong economic growth. This was a time when the maquiladoras – the factories along the border of the United States and also now in different parts of the country, which produce goods for export to the U.S. – were growing. During this time, the gap between women’s and men’s industrial wages worsened. A lot of traditional economists argue that growth is really good and that is what they are hoping to spur by all these structural adjustment policies. One of the cautionary pieces of this is that growth may do nothing to alleviate the economic differential between men and women. Growth is not the panacea that traditional economists believe it to be.

Related to the issues of employment is that as the employment opportunities in the formal sector – that is, the jobs that are officially counted – diminish, then women enter the informal sector. There is a lot of evidence that women are becoming poorer. About 70 percent of the world’s poor are female and poverty is on the rise, according to the UN. This indicates that the economic models that we’ve been living under are not helping women.

Let’s talk about how export promotion affects women. Export promotion for many countries focuses on the agriculture and manufacturing sectors. The manufacturing sector is a mixed bag for women. It may be a source of new employment but corporations often hire women because the corporation thinks it can give women cheaper wages and that women are less likely to unionize. Women also are more subject to sexual abuses such as forced pregnancy testing and sexual harassment.

The agriculture sector faces similar issues. In the Philippines, for instance, some crops are considered “male” crops and some are considered “female” crops in terms of who does the harvesting and work. If it’s a “male” crop, then women are not hired to be involved in the field labor and are not benefitting from increased employment.

Another example in terms of export cropping, in Africa there have been some interesting examples where the principles of supply and demand have been totally blown out of the water because the government officials instituting structural adjustment didn’t take into consideration traditional African agriculture arrangements.

In those examples, the men controlled the land for export crops and controlled the money from those crops. The women had access to land that they worked on for food for their families. But since the men didn’t give any additional income from the export crops to the women, the women had no financial incentive to take time away from their own duties to work for their husbands.

The theory predicted that when export prices were increased, there should be a flood of resources going into export crop production and it didn’t happen. The officials wondered what was going on. It was because the women didn’t see any benefit to shifting their labor in that way – they didn’t want to work for free. It’s another example of how household relationships and duties impact these policies in practice.

I’ll wrap up the list of affects on women with a bullet list of other impacts.

Progress with girls’ education slows. This can happen in several ways. One is through explicit cutting back on funding for education or increasing school fees. This affects whole generations of girls and has a lasting consequence for them, their families, and the society at large. The statistics are that females are now two-thirds of the world’s illiterate.

Because of shrinking budgets, food consumption in families shrinks and anemia may increase. In some cultures, families decide that adult males and boys get more food, if the family makes the economic analysis that they bring in more income, or for whatever reason.

In Latin America, for example, 31 percent of girl children are underweight, compared to 17 percent of boys. Related to this is girls’ health and mortality rates. The UN estimated that 9 million femailes are “missing.” They have been killed or have died off.

Women’s fertility may be affected. In the Egyptian case study, when the government stopped providing a guaranteed job for all college graduates, young people coming out of college delayed their marriages, and delayed having kids. That has had some interesting impacts in changing household structures.

Women face a greater reliance on credit because of decreasing income. The UN’s Human Development Report found that only five percent of all rural credit offered by the multilateral development banks reaches rural women. So while they face greater reliance on credit, women may not get it.

Women suffer greater domestic violence and stress. UNICEF did a really interesting study about what happened to families in the former Soviet Union as they were undergoing structural adjustment. UNICEF found that within a four-year period, in six countries there were 800,000 excess deaths.

The highest increase in the mortality rates was among male adults between 29 and 59 years of age. There was great economic dislocation, rising unemployment, prices were going through the roof, no more guaranteed housing – things were dramatically worsening for the average person. Men were committing suicide, having heart attacks, and drinking themselves to death. There were an incredible number of widows now responsible for children in their households. Obviously those women were feeling the same economic stress as men, but men were responding to it in different ways than women. Men were dying and that was unfortunate that this was happening. But also women were left behind with the children.

oob: All of this seems so overwhelming. What can we do about this?

sparr: There are things we can do. It’s important not to feel overwhelmed. There are a lot of rays of hope.

People are organizing very effectively in the United States and in countries all around the world. Our ability to work together cooperatively to make changes in the institutions that are the key players is getting stronger all the time. One example is that through international cooperation among nongovernmental organizations, we successfully fought back the multilateral agreement on investments. This was a key piece that a lot of folks pushing corporate globalization really wanted.

Seattle in many ways is a great second victory. Not all your readers are on the front lines, but I hope they can take heart that in various ways, big and small, there is a growing wave of people around the world who are calling for greater democracy, greater economic justice, and environmental sustainability. There are different ways that people can get plugged in.

The Jubilee 2000 movement, which is calling for debt forgiveness for highly indebted nations, is going strong. There is still a lot of work to be done in terms of advocating effectively for debt forgiveness. In the United States, because of our key role in the World Bank and the IMF, Congress needs to take stronger movement. One thing women can do is become a little better educated about this issue and contact their members of Congress, to ask presidential candidates what their position is, and become policy advocates in this area.

Related to that is 50 Years is Enough, which is calling for dramatic overhaul of the World Bank and IMF. There are a lot of regional, state and city-based chapters of 50 Years and Jubilee 2000, so you can look for activities going on in your area.

There is a lot of good work happening around the World Trade Organization. Debt and trade are very much linked. Trade is the next key issue. Even after we succeed in forgiving the debts of a country, they will get right back into debt if we don’t change trading relationships. I would encourage people to begin to learn a little bit about how the WTO works, and the policy issues related to it. Our legislators and the United States Trade Representative need to hear from us. There are great short pamphlets that explain the issues in very simple terms. One of the groups I’m involved with is putting out a new pamphlet soon, about all the negotiations around trade in services.

Water is one of the key issues, as well as education and prisons. A good place to go for information in these areas is Public Citizen and their Global Trade Watch campaign and action network. There are often initiatives in your own city or state, because some of the WTO issues affects government procurements, which has a big impact on cities and states in terms of employment issues and environmental issues.

There is an emerging worldwide gender and trade network, which is very exciting. If people want to get to know about that, they should contact the Center of Concern in Washington, DC.

Another area of activism is making transnational corporations more responsible. This includes sweatshop campaigns. It’s a nice way for women in the US to connect with women in other countries, because the sweatshops employ a lot of women. The National Labor Committee in New York is one place to connect with that, as well as Global Exchange.

One last piece, there’s a growing movement for socially responsible investment. That’s another way, for women who invest in mutual funds or stocks, to use them to promote ecnomic justice and environmental sustainability.

oob: Thanks so much for your time in explaining this important issue.

For more information, contact:

50 Years is Enough

1247 E St. SE, Washington, DC 20003


Jubilee 2000

222 E. Capitol St.

Washington, DC 20003


Global Exchange

2017 Mission St. #303

San Francisco, CA 94110


National Labor Committee

275 Seventh Ave. 15th Floor

New York, NY 10001


Public Citizen

1600 20th St. NW

Washington, DC 20009


International Monetary Fund

World Bank

World Trade Organization

Copyright Off Our Backs, Inc. Jun 2000

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