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Effects of Imf Policies in Kenya

Essay by   •  June 4, 2012  •  Essay  •  401 Words (2 Pages)  •  1,127 Views

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Despite having changed SAPs to the PRSPs, the final product is very little. The PRSPs require that states consult with the civil societies in designing economic programs. However these programs still require IMFs approval which makes it all the same as before. The PRSP process still retains a major part in IMF structural adjustment, bearing in mind that the IMF is not a development institution but a lending agency for short term external imbalances.

PRSPs have a bigger negative impact than they have a positive one. Many countries are in debt due to SAPs which are pre conditions of the loans being granted. These programs have required that poor countries reduce on education, health and development while debt repayment and other economic policies have been made priority. In other words the IMF has demanded that the poor countries lower the standards of living of their people.

When governments apply these programs, the value of labour decreases, capital flows become more volatile, a race to the bottom begins affecting the poor citizens thus leading to social unrest leading to riots and protests around the world. By the IMF donors keeping the exchange rates in their favour, the richer countries get richer while the poorer get poorer.

Over the past two decades, the IMF has undermined Africa's health through the policies it has imposed. The IMF cannot seem to understand that investing in ... [a] healthy, well-fed, literate population ... is the most intelligent economic choice a country can make.

The dependence of these poor and highly indebted African countries has given the IMF the power to control economic policy making in these countries. The policies have forced African governments to adjust their economies towards greater integration in international markets at the expense of social services and long term development priorities. They have reduced the role of the state and cut back government expenditure.

It is not just health; Basic food security has also been undermined. In 2002, the IMF forced the Malawi government to sell its surplus grain in favor of foreign exchange just before a famine struck. This was explicitly so that debts could be repaid and as a consequence seven (7) million of the total 11 million populations were severely short of food.

There is therefore need to rethink these policies, find out if they should be reduced, done away with or the whole IMF institution be dissolved or at the least be shrunk.

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