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Essential
Action
P.O.
Box 19405 Washington, D.C.
20036
Telephone:
202-387-8030 š
Fax: 202-234-5176 š
E-mail: action@essential.org
How
Structural Adjustment Destroys the Environment
Structural
adjustment contributes to environmental degradation through its
manic emphasis on promoting exports, including especially agricultural
and resource exports, as well as through its undermining of enforcement
of environmental regulations. Here is how Friends of the Earth describes
the problem in a recent report, "IMF: Selling the Environment
Short."
"One
major goal of structural adjustment programs (SAPs) and stabilization
programs is to generate foreign exchange through a positive trade
balance. To meet the IMF's ambitious targets for currency reserves
and trade balance, countries must quickly generate foreign exchange,
often turning to their natural resource base. Countries often over-exploit
their resources through unsustainable forestry, mining and agricultural
practices that generate pollution and environmental destruction,
and ultimately threaten future exchange earnings."
"[E]xports
of natural resources have increased at astonishing rates in many
countries under IMF adjustment programs, with no consideration of
the environmental sustainability of this approach. Furthermore,
the IMF's policies
often promote price-sensitive raw resource exports, rather than
finished products. Finished products would capture more added value,
employ more people in different enterprises, help diversify the
economy and disseminate more know-how."
"Structural
adjustment and stabilization also aim to generate positive government
budget balances. In the effort to rapidly trim budget deficits,
governments are forced to make choices, and inevitably, the environment
loses. Decreased spending weakens government ability to enforce
environmental laws and diminishes efforts to promote conservation.
In addition, governments are told to increase private investment
and to reduce the role of the state in favor of private sector development.
Budget priorities are often directed toward business promotion,
creating a further strain on cash-strapped environmental enforcement
agencies. ... Governments may also relax environmental regulation
to meet SAP [structural adjustment program] objectives of increasing
foreign investment, as occurred in the case of the Philippines."
As
one example of how IMF-mandated budget cuts can hurt the environment,
Friends of the Earth points to the Brazilian Amazon forest: "Because
of IMF budget restrictions, as of July 1999, funding for the enforcement
of environmental regulations and supervision programs was reduced
by over 50 percent. ... The Brazilian Institute for the Environment
and Renewable Natural Resources, responsible for implementing Brazilās
environmental and conservation protection programs, had expenditures
that totaled only 16.28 percent of its budget."
The
IMF says it defers consideration of the environmental effects of
structural adjustment to the World Bank, but as Friends of the Earth
points out, "The World Bank has failed to provide environmental
guidance to the IMF, and is even delinquent in assessing the environmental
impacts of its own structural adjustment loans," Friends of
the Earth concludes. "A recent internal World Bank study found
that fewer than 20 percent of World Bank adjustment loans included
any environmental assessment."
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