Characteristics and effects of saps, Financial Management

CHARACTERISTICS AND EFFECTS OF SAPS

Although SAPs differ somewhat from country to country, they typically have the following features:

Reduction in Trade Barriers
SAP’s require the removal of barriers to imports, including tariffs, to facilitate integration into the international market. In practice, these measures allow cheaper imports to flood the country, depressing local industry and agriculture and leading to massive unemployment.

Currency Devaluation
By making imports more expensive and exports cheaper, neo-liberal economist (such as McKinnon (1973) and Shaw (1973)) asserts that devaluation will reduce trade imbalances, freeing more resources for debt repayment. In practice however, devaluation makes essential imports like medicines and oil far more costly, placing a strain on the poor countries.

Price Liberalisation
Price controls and subsidies are removed to eliminate artificial disincentives for production. In theory, this encourages food production. What is certain is that these measures increase the price of food and basic services, making life difficult for the poor.

Export promotion
Priority is given to production for export since this earns the country hard currency needed for debt repayment. As a result, more and more land is used for cash crops and food production falls. Pesticide use and deforestation increase, leading to ecological destruction. Labour laws are weakened to drive down wages and increase foreign investment in assembly plants for export products.

Posted Date: 12/11/2012 5:29:54 AM | Location : United States







Related Discussions:- Characteristics and effects of saps, Assignment Help, Ask Question on Characteristics and effects of saps, Get Answer, Expert's Help, Characteristics and effects of saps Discussions

Write discussion on Characteristics and effects of saps
Your posts are moderated
Related Questions
Q. Short terms working capital? 1) Indigenous bankers: private money leased and other country banking used to be the only source of finance prior to the establishment of the

Question- Under a hire purchase deal structured by X Finance Ltd. for Y Corporation, the finance company has offered to finance the purchase of equipment that costs Rs. 200 lakh.

Twelve cases of leukemia are reported in people living in a certain census tract over a 5 year period. Is this number abnormal is only 6.7 cases would be expected based on national


Q. Define Implicit cost and explicit costs? Implicit cost and explicit costs: the implicit cost is the rate of return associated with the best invests opportunity for the firm

Value of Conversion Benefits: Having seen the measure used to analyze the convertible bonds, let us now examine the merits and demerits of convertible bonds and why or why not

Question: You have just been appointed the secretary of the ALM Committee (ALCO) of ABN Bank. The ALCO members have some queries relating to the liquidity risk faced by the ban

Globalization of the Financial Markets There are many economies in the world that have opened their gates for foreign participants and companies. Trading takes place not only i

Step 1) Opportunity Set Graph:Combine 2 of your stocks (Ignore the other 2 stocksfor this step only).  Construct an investment opportunity set (the curved set) between the two risk

#What are the food and beverages industry financial ratios for 2011,2010,2009? 1. Liquidity(current/quick), Asset Management(Inventory Turnover, total assets turnover),Debt Menagem