From Poverty to Power Green, Oxfam 2008 - weman

FROM POVERTY TO POWERinflationary pressures, followed by structural adjustment – a mix ofderegulation and liberalisation designed to unleash the ‘animal spirits’of the market.With only minor variations, this recipe – dubbed ‘the WashingtonConsensus’ – was implemented across dozens of countries in LatinAmerica and Africa. 5 Home-grown economists and politicians whoshared a belief in the diagnosis and the proposed cure led the way,deploying the powerful leverage exercised by the Fund and Bank topush through unpopular reforms.If structural adjustment were a medicine, it would long ago havebeen banned due to its adverse side effects. From 1960–80, sub-Saharan Africa’s ‘failed’ statist economic model grew at an annualper capita rate of 1.6 per cent. At the time these figures were seen asscandalously low, but in hindsight they look like a golden age. From1990–2005, Africa’s GDP grew by an annual per capita rate of only0.5 per cent. 6 In Latin America, the 1980s became known as the‘lost decade’ of development. In Russia,‘shock therapy’ reduced people’slife expectancy by four years from 1990–2000, and incomes plummetedby a third. In China and Viet Nam, however, which rejected the Bankand Fund’s policy prescriptions in favour of a more cautious andpartial transition to a market economy, incomes increased by 135 percent and 75 per cent respectively during the same years. 7Tellingly, even the man who coined the term ‘Washington Consensus’later stressed: ‘I never thought of the Washington Consensus as apolicy manifesto, for it omitted a number of things that seemed to meimportant, most notably a concern for income distribution as well asfor rapid growth.’ 8 And so it proved: rising inequality became one ofthe most alarming features of stabilisation and structural adjustment.One of the most ambitious reviews of the impact of these policyreforms on the ground was carried out by a network of NGOs, tradeunions, and academics in a dozen countries that had gone throughWorld Bank-funded adjustment programmes. Using a methodologyjointly designed with the Bank, the Structural Adjustment ParticipatoryReview Initiative (SAPRI) involved thousands of local organisationsparticipating in national field exercises on four continents,the majority ofwhich were carried out jointly with the Bank and national governments.298