This document discusses IGO involvement in trade and finance through structural adjustment programs (SAPs) and the Highly Indebted Poor Countries (HIPC) initiative. SAPs imposed conditions like market liberalization and spending cuts on developing countries in exchange for debt relief, but critics argue this increased dependency. HIPC aimed to reduce debt through partial write-offs if countries implemented SAPs. Uganda greatly benefited, using savings to increase education, healthcare, and poverty reduction. However, some argue HIPC did not provide lasting relief and was aimed at ensuring future debt repayment rather than development.

1. IGOs in Trade and
Finance

2. Starter
• What are SAPs
• Write down 5 different methods to help
countries out and show the person next to
you – They must evaluate the success of
these

3. Learning Objectives
• Evaluate IGO involvement in Trade and
Finance
• Assess both SAPs and HIPC schemes
• Assess the impact of HIPC schemes on
Uganda

4. These consist of the usual
Suspects
• The main things to consider though is the
Structural Adjustment Programmes (SAPs)
• The Highly Indebted Poor Countries
scheme (HIPCs)

5. SAPs
• As touched upon before the IMF and WB
lent vast amounts of money to developing
countries for development schemes.
• During the boom period of the 1980s
interest rates rocketed making it almost
impossible to pay back
• Unpaid interest was added to loans so debt
was rising for these countries making
development impossible.
• 2000 the IMF and WB said they would help
the countries out if they agreed to
conditions known as structural
readjustment

6. Debate – What issues exist from
the SAPs
• Opening up Domestic Markets
• Reducing the Role of the Government
• Removing restrictions on capital
• Reducing the government spending – on
infrastructure and
• Devaluing currency (Exports become
cheaper

7. • Critics argue that the result of these
conditions is that countries lose their
economic sovereignty and open
themselves up for TNCs who take over the
privatised services and therefore this
increases their dependency on trade.

8. HIPC Initiatives
• These were introduced in 1996
• Their aim was to reduce national debt by partially writing
them off – in return for SAPs
• HIPCs affected 36 of the world’s least developed countries.
Those with the greatest debt
• 30 in Sub-Saharan Africa

9. Controversy
• Christian Aid and Oxfam pointed out that
by 2000 major issues existed and
demanded a more concerted effort to
reduce debt
• They wanted a complete write off
• By 2005 the UK held presidency of G8 and
steered the countries to complete debt
cancellation a decision worth $40 billion
• Saving these countries $1.5 billion
• However conditions existed

10. Conditions of debt cancelation
• Each country had to show good financial
Management and a lack of corruption
• Those Govts had to spend the savings
gained on poverty reduction, education
and healthcare

11. Case Study: Uganda and Debt
• In 1992 Uganda owed $1.9 billion
• It was one of the first countries to benefit
from debt write offs through the HIPC
scheme

12. • Spending on Public Services has risen by 20%
• 40% extra on Education
• 70% increase in Healthcare
• Abolition of fees on basic health care
• Free Primary Schooling
• Enrolment rate increased from 62% to 93% for girls and 94%
for boys
• Girls and boys numbers almost even
• Ugandan's living below the poverty line has decreased from
55% in 1993 to 24.5% in 2010.

13. • 2.2 million people (10%) have gained
access to clean water
• Fetching clean water was often women's
and girls work one of the reasons they did
not go to school

14. Significance of Educating Girls
• Education is the path to independence and
greater prosperity
• Primary schooling ratio is 1:1
• By age 11 it is 1:2
• By 16 upto as high as 1:10
• Girls marry as young as 13 or 14 and have
children shortly after
• Ugandan fertility is 6.8
• Women are the poorest Ugandans
• Work as landless labourers

15. • Have little control of their earnings
• Return to work after giving birth Maternal
mortality is high
• Unhealthy mothers have babies more
likely to die in their first five years

16. • Investment in education for girls can have
a large impact
• Often defer marriage
• Fertility rates therefore fall among
professional women
• Educated women are more likely to select
a career, work in that career before
marriage and children
• Infant mortality rates amongst Ugandan
women are almost as low as in many
developed countries

17. Ugandan Economy in focus
• The Ugandan economy grew an impressive 7 per cent in
2008
• Growth has been led by the service and industrial
sectors, while agriculture has generally stagnated
• The government is pressing ahead with a five year
National Development Plan (NDP) focusing on
infrastructure and agricultural development
• in a bid to increase exports and remove constraints to
further growth
• Uganda continues to be a leader in social progress in
Africa with poverty reduction and improvements in health
and education

18. Impacts
• Govt spending rose by 20%
– 40% more on education. 70% more on
healthcare
• Free primary schooling was introduced
– Before debt relief only 62% attended school this
rose to 93%
• There was a massive reduction in the
gender gap of school
Before 1992 During 10-15 yrs.
after
GDP $4.3 bill $7.9 bill $27.5 Bill
Literacy rates % 56 67 78.4
% Improved water 44 60 79

19. • The opening up of markets in the 80s
caused the global shift of manufacturing
• TNCs relocated to cheaper locations in
Asia which saw economic growth

20. Overall
• The argument is that SAPs are generally
seen as negative however HIPCs can be
viewed as positive
• Debt cancellation however can have
massive impacts on countries such as
Uganda

21. Criticism of HIPC Initiative
• the HIPC initiative has been met with a lot of criticism
for not actually helping the countries it is supposed to
be helping, while helping those it wasn't necessarily
meant to (the rich nations):
– it will not provide lasting relief from debt for the highly indebted
countries of the south
– The HIPC process is aimed not at cancelling debts, but at
ensuring that they can be repaid. It has little to do with
enhancing human development, reducing poverty, or even
increasing economic growth in the debtor countries.
– it is designed to massage debt figures down to a level where
they would be deemed “sustainable” again