Adjustment and agriculture : issues for the 1990"s

began as a response to the financial crises in developing countries during the late 1970"s and continued through the 1980"s in response to the harsh international economic environment. This report evaluates experiences with adjustment and identifies important issues for policymakers and planners in the 1990"s. Major conclusions are as follows. (1) Structural adjustment is a necessary but insufficient step toward economic renewal. While significantly helping countries manage economic crises, it has fallen short of its initial promise to rekindle growth, in part because of greater than anticipated international shocks and lower than anticipated external lending. (2) Adjustment in the 1990"s must be integrated into wider development strategies and deal with the persistent challenges of development -- how to stimulate growth, build capacity, reduce poverty, and foster political stability -- in a competitive international environment. (3) International economic conditions play a greater role in shaping growth than originally envisioned. Even very substantial adjustments in trade imbalances and macroeconomic policy have failed to achieve their stated aims. (4) Adjustment will not solve deeply rooted debt problems. Both low and middle income countries now recognize that debt reduction requires complementary resources such as the Brady Plan, debt forgiveness, and debt swaps. (5) Even with a reduced debt burden, countries must generate increased investment to lay the foundation for growth and development. (6) The negative impact of adjustment on human welfare has not been adequately addressed. (7) Adjustment requires the support of relevant political groups.