‘Structural adjustment’ no longer forced

washington — The International Monetary Fund has changed and no longer imposes tough “structural adjustment” programmes as it did in poor countries two decades ago, IMF chief Christine Lagarde said.

Told by a journalist from Ghana that many people there had “a phobia for the IMF” due to the harsh conditions of its past structural adjustment programmes in Africa and South America, Lagarde responded: “Structural adjustment? That was before my time, I have no idea what it is. We don’t do that anymore.”

The crisis lender is sensitive to charges it dictates socially and economically harsh reforms on countries availing themselves of its support.

In recent years, it has come under heavy criticism for the austerity polices — mostly government spending cuts and tax hikes — that have accompanied its rescue programmes for Greece, Portugal and others.

Lagarde, speaking in a Press conference during the IMF/ World Bank spring meetings in Washington, stressed that the conditions the IMF places now in loan programmes are decided together with recipient governments. “Seriously, you have to realise that we have changed the way in which we offer our financial support,” she added. “It’s really on the basis of partnership. There is always in partnership a bit of hardship to go with it.”

“If the Fund is called upon to

That was before my time. I have no idea what it is Christine Lagarde

help, it’s because the country feels it cannot decide certain things on it own, it needs backup support, financing to make sure that it has access to enough funding.”

She added that the IMF also offers countries technical assistance and help building the capacity to manage an economy.

“So it’s a new face.” —