Environmental Management: Principles and practice

Structural adjustment and the environment
Structural adjustment refers to strategies adopted as a response to debt. When recession
began to take hold in the developed countries, the World Bank and the International
Monetary Fund began to impose structural adjustment programmes to try to stabilize
the economies of debtor nations (developing countries), protect creditors and generally
shore up the international economy (Bello and Cunningham, 1994). The tool used to
try and stimulate growth and ensure debt repayment was the structural adjustment
loan—this was intended to counter the spiralling debt situation, fight various
inefficiencies, and improve the flow of traded goods. The World Bank began in Turkey
in 1980, and by 1990 another 64 countries had adopted measures. These measures
varied from country to country, although they usually took the form of loans to
reduce balance of payments problems, which were granted on condition the recipient
deregulated their economy, reduced state expenditure, and freed exchange rates. The
goal was to give priority to export earnings, make the economy more efficient by

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cutting spending on wages and welfare, and reduce state controls to boost productive
sectors. There was limited success, but in some countries there were significant or
marked ill-effects: reduced household incomes, increased unemployment, inflation,
cut-back in support for welfare and public services, and less spending on
environmental management. Limited impacts have been felt in developed countries,
but in some poorer nations there has been significant increase in poverty, greater
childhood mortality (George, 1988), land abandonment, riots and rural—urban
migration. One of the consequences of structural adjustment that may have an impact
on the environment is the progressive disempowerment of the poor (Redclift, 1995).
At its worst structural adjustment has obliged many people to sacrifice environmental
assets for short-term survival.
At first these conditional loans gave little consideration to environmental
impacts. Since the mid-1990s there has been interest in the effects of structural
adjustment policies on the environment (Reed, 1992a; 1992b; 1996; World Bank,
1994). The World Bank and some other agencies involved in formulating structural
adjustment policies increasingly try to support better environmental management
and seek sustainable development.