Structural adjustment review a lesson in 'critical engagement'
by Kamal Malhotra*
The history of the Structural Adjustment Policy (SAP) debate between the World
Bank and civil society is as old (at least 15 years) and as contentious as
SAPs themselves.
In that sense, the Structural Adjustment Participatory Review Initiative (SAPRI)
should be seen as part of an ongoing process of civil society mobilisation
around SAPs which began at least ten years before SAPRI was even conceived.
Its seeds were sown long before Mr. Wolfensohn became President of the World
Bank in June 1995 and lent his support and stature to such a critical engagement
with global civil. Mr. Wolfensohn should be congratulated for his support
for SAPRI but equally it should be noted that the impetus and momentum for
it, at least from a civil society perspective, came long before.
It is equally important for the sceptics on the civil society side to know
that the civil society groups engaged in SAPRI are amongst the longest standing
and most consistent critics of the World Bank. This is because economic policy
reform has been at the heart of the debate between civil society and the World
Bank since, unlike discrete projects, such fundamental reforms affect everything
in society including our very basic values and aspirations. Indeed, they affect
the fundamental structure of society itself and the crucial relationships
between the state and governments, the market and civil society. And while
there are many operational and policy points of interaction between the Bank
and civil society, it is economic policy reform that has attracted the most
robust and critical minded civil society protagonists of the Bank.
So the concern about cooptation of civil society through SAPRI that some have
expressed is not well founded and should be put to rest. SAPRI is about critical
engagement with the Bank on some of the most fundamental social and political
issues; it is certainly not cooption of civil society by the Bank.
The main civil society organisations involved never expected that SAPRI would
be easy, smooth or tension free. It has always been a difficult process, full
of tough issues.
So, what have some of these been over the past two years of SAPRI?
A number of these tensions can be put under the broad heading of 'participation.'
First of all, government participation. To give it a truly tripartite flavour
it was crucial that governments not be threatened by SAPRI but genuinely and
voluntarily welcome it. The Bangladesh government should be congratulated
for its willingness to participate. Unfortunately, the Mexican and the (previous)
Philippines governments refused to participate while the government of El
Salvador withdrew unilaterally after agreeing to participate. The governments
of Brazil and Argentina do not appear to ever have been formally asked despite
our repeated requests because the Bank insisted that they would refuse to
participate if they were.
The refusal of some governments to participate and the Bank's unwillingness
or inability to ask other governments led to the formation of the Citizens'
Alternative Structural Adjustment (CASA) and the creation of a broader Structural
Adjustment Policy Review International Network (SAPRIN), in addition to SAPRI.
The continuing absence of a large and/or "emerging market" country and economy
such as Mexico, the Philippines, Brazil or Argentina in the formal SAPRI exercise
is both a challenge and a limitation. This is doubly so after the Asian financial
crisis because the Bank and Fund have in the past used these countries to
draw lessons for economic reform programs for other countries, including the
many smaller ones that are part of the current SAPRI exercise such as Bangladesh.
The non-participation, except in an observer status at some meetings, of the
International Monetary Fund (IMF) is also problematic; a limitation magnified
by the Asian crisis which shows beyond doubt that any exercise on SAPs has
to involve the Fund. Indeed, in the Asian context, the relevance of the SAPRI
exercise without the IMF is questionable, so this is an issue which must be
resolved.
The unilateral withdrawal of the government of El Salvador after it agreed
to join also raises fundamental questions -- should the government of El Salvador
be accountable for this decision? What is or should be the role of the Bank
as a signatory to the July 1996 agreements with civil society? Should the
Bank, for example, be responsible for ensuring accountability to the July
1996 agreement by governments which voluntarily agreed to participate in SAPRI
but later withdrew unilaterally since these governments are the Bank's clients
and it has been agreed that it is the Bank's responsibility to bring governments
on board for the exercise?
Linked to the this is the question of which ministries should be involved.
It should not just be the Ministry of Finance or, even worse, the Finance
Minister as in the case of the El Salvador, but all government ministries,
especially those responsible for social policy functions. For too long these
ministries, like poor and vulnerable groups in society, have been left relatively
voiceless and disempowered within governments, especially on issues and decisions
to do with economic policy and SAPs.
SAPRI could also benefit from broader based participation within the World
Bank. While we welcome the involvement of the Policy Research Department,
the intellectual heart of the Bank on the basic SAP formulation and design,
it would be good to have a broader range of operational staff inside the Bank
and senior economic policy makers involved. Likewise, the Bank should ensure
that its resident country offices send senior staff to in-country meetings
on SAPRI. While this appears to be the case in Bangladesh, it is not a universal
experience, and in some cases the Bank has been represented by relatively
junior staff with little or no decision making authority with predictably
unsatisfactory results, at least from a civil society perspective.
A second source of tension is differences in objectives and perspectives between
the Bank and civil society. While there are two main agreed objectives - to
involve civil society in discussion on structural adjustment policies and
to learn about participatory methodologies -- both the Bank and civil society
have additional objectives which differ. The issue of whether this is a research
exercise with a participatory component or a participatory exercise with a
research component is one such tension, reflecting somewhat different objectives
and perspectives between the Bank and civil society. It is a tension which
is unlikely to go away.
Information disclosure policy has been an extraordinarily hard issue to agree
on and took almost six months from the time of the Global Launch of SAPRI
(July 1997) to finalize because it was mired in legal and other problems for
much too long. It took compromises on both sides to reach an agreement in
February 1998, delaying some national launches by up to six months.
This policy is still contentious in some countries even after the global agreement
was reached. In Hungary, for example, I was told that the local World Bank
Resident office has refused to release SAP documents published after 1992;
yet this appears to be against both the spirit and letter of the global agreement.
The World Bank's Washington DC headquarters clearly needs to do better in
terms of ensuring that global agreements on SAPRI are both understood and
honoured locally by its senior staff and offices.
Those of us on both sides who were involved in the debate on technical and
methodological issues during 1996 and 1997 often had the impression of taking
"one step forward and two steps backwards." While in the very first hour of
the very first global methodology team meeting in September 1996, we thought
we had reached agreement between the World Bank and civil society on fundamental
principles, we were later distressed or reassured, depending on differing
perspectives, that the superficial wording that we had agreed to was subject
to very different concrete interpretation by the two sides.
Similarly, we had very different understandings of what we meant by a political
economy approach, on definitions of rigour and the relative treatment and
weightage given to qualitative and quantitative data (should they be treated
with equal respect as we, in civil society, insisted?, how should we treat
or "scale up" seemingly credible anecdotal community level concerns and other
data? ), and on how to view the Bank's non-negotiable and seemingly impregnable
"counterfactual."
On the latter, after months of impasse and stalemate, we agreed that the counterfactual
should not be viewed as a "no economic reform" scenario, but rather as an
alternative economic policy reform scenario (eg. agrarian reform, rural credit
and other institutional support for the rural landless and small farmers as
opposed to agricultural price liberalisation and export-orientation as the
only panaceas for the ills of the current economic and social malaise afflicting
a multitude of economies and societies).
There has also been some difference of opinion over media strategy. While
civil society participants in this exercise feel that it is desirable to agree
on joint press releases as far as possible, it is crucial for the integrity
and credibility of the exercise that both sides maintain the possibility,
and indeed desirability in some circumstances, of putting out independent
media releases when necessary. This has recently been a point of tension and
is inevitably going to remain one for the duration of the exercise. Part of
the explanation for this are the different objectives and expectations of
SAPRI by the Bank and civil society -- once again, the tension between whether
SAPRI is primarily a participatory (and, indeed, political ) exercise with
a research component or whether it is primarily a research exercise with a
participatory component surfaces and lingers.
Last but not least, the relative importance of the national, regional and
global levels at different stages or phases of SAPRI. The World Bank is saying
that the civil society side should now shift both authority and the locus
over major decisions and the overall process to the in-country civil society
side. We maintain that we did this over a year ago in all SAPRI countries
and that while we welcome the Bank's willingness to do this now, we must all
remember that, as per the original concept of SAPRI, it simultaneously has
national, regional and global dimensions, the relative importance of which
shift in different phases of the exercise. Nevertheless, each level has an
important role to play in all the phases of the exercise and while the current
phase necessitates a central role for the in-country national process, the
other two levels of the exercise remain crucial as the examples of both Hungary
and Uganda, the two countries which have had National SAPRI launches before
Bangladesh, illustrate.
Indeed, from its conception, it has been recognised that one level is not
a substitute for the other -- all three have crucial roles to play in all
the phases of SAPRI.
In conclusion, let me stress that these trials and tribulations of the last
two plus years have made the SAPRI exercise a richer one than it would otherwise
have been. The fact that the whole process has been one of critical engagement
rather than cooptation has also, so far, made it a much more meaningful one
for the poor and vulnerable people whose interests it is intended to serve.
* Kamal Malhotra is co-director of Focus on the Global South and a member
of the international steering committee of the Structural Adjustment Participatory
Review Initiative (SAPRI). A longer version of this paper was presented at
the launch of the Bangladesh SAPRI on 21 October 1998 in Dhaka, Bangladesh