The success of the anti-colonial movements in the middle of the 20th century triggered a crisis in the core states, as it constrained their access to cheap labour and resources. In the 1980s, they retaliated to restore the colonial structure of the world economy. For the South, the consequences were devastating.
But the core states were not pleased, as this shift constrained their access to cheap labour and resources, and reduced their control over Southern markets, triggering supply-price inflation and contributing to a crisis of capital accumulation in the 1970s. The US Federal Reserve responded by raising interest rates toward 20%, hoping to crush wages. This triggered a debt crisis across the global South, and governments took steps toward default. To protect Wall Street banks, the US sought to enforce debt payment by using the World Bank and the IMF to impose structural adjustment programmes (SAPs) on Southern governments.2
SAPs forced governments to cut public spending and divert resources to debt service. They also privatized public assets and abolished protective tariffs, subsidies and regulations, rolling back the progressive reforms of the post-colonial era. SAPs were the mechanism by which neoliberalism was imposed on the global South, as a backlash against the anti-colonial movement. From 1980-2004, SAPs were imposed on 132 countries, representing 82% of the world population, shifting control over macroeconomic policy from the parliaments of the global South to bankers and technocrats in Washington and New York.
Structural adjustment “kicked away the ladder” to sovereign industrialization,3 but also re-cheapened Southern labour and resources, forced open Southern markets, and organized Southern production around supplying Northern firms through global commodity chains. SAPs therefore restored the basic tenets of the imperial arrangement.4 This arrangement has enabled the core to achieve a massive appropriation of wealth from the global South through unequal exchange.5
For the global South, the consequences were disastrous. Structural adjustment induced a prolonged economic crisis across most regions, with national income declining and stagnating for the rest of the 20th century. SAPs compressed Southern consumption, caused poverty and unemployment to increase, reduced healthcare access and caused social progress to slow.6 See our entry on global poverty for more.
This chart illustrates the crisis in Latin America, Sub-Saharan Africa, the Middle East and North Africa. After three decades of impressive gains, income contracted dramatically under SAPs and did not recover until more than two decades later. This decline in living standards triggered widespread protests which eventually forced the IMF and World Bank to abandon some of their more draconian policies. A similar decline affected the countries of Eastern Europe, which were structurally adjusted after 1990.
Even so, SAPs had a serious impact on food security in India and China. In India, the proportion of the rural population consuming insufficient calories increased from 56% in 1973-4 to 76% in 2009-10.8 There was a similar increase among the urban population. According to the Indian economists Utsa Patnaik and Prabhat Patnaik, this occurred because neoliberal reforms reallocated agricultural production away from food for working-class people and towards cash crops for export to the global North.
In China, structural adjustment caused a dramatic increase in extreme poverty, measured in terms of access to basic subsistence.9 Under SAPs, the Chinese government dismantled the system of public provisioning and price controls that had previously guaranteed access to food, housing, and other basic necessities at low cost. Even though national income improved in China during this period, a dramatic spike in the cost of food pushed over 60% of the Chinese population into extreme poverty.
Only a few countries managed to resist SAPs and avoid succumbing to neoliberal policy. Cuba is one of them. Cuba managed to maintain universal public provisioning systems while they were dismantled or prevented across the rest of the global South. As a result, Cuba has some of the best social indicators of any country in the global South today.10
This is clear when it comes to nutrition. Since the revolution of 1959, Cuba’s socialist government has funded a public food programme designed to ensure universal access to basic nutritional requirements.11 Thanks to this system, Cuba has one of the lowest death rates due to malnutrition in the world, lower even than in many high-income countries, such as the United States and France. Remarkably, Cuba has achieved this while subject to an illegal US-imposed blockade that prevents them from importing essential goods.12 This demonstrate the power of public provisioning, and illustrates what could have been achieved elsewhere in the global South if structural adjustment had not been imposed.
Countless studies have demonstrated the human toll of neoliberal policy, but one way to illustrate the scale of it is to compare the death rate from malnutrition in Cuba to neoliberal economies where public food systems have either been dismantled or prevented. This map illustrates recent research showing deaths due to malnutrition for all countries in excess of Cuban levels over the period 1990 to 2019. This includes 35,000 deaths in the US; 409,000 in Mexico; 729,000 in China; 1.2 million in Indonesia; and 3.65 million in India. In total, 15.63 million excess deaths could have been prevented with Cuba-style policies.13
Notes and references
[Header Image: Reuters]
1. Chang, H. J. (2008). Bad Samaritans: The guilty secrets of rich nations and the threat to global prosperity. Random House. Hickel, J. (2017). The divide: A brief guide to global inequality and its solutions. Random House.
2. A good overview of the causes of the 1980s debt crises, as well as the structure of the IMF and World Bank and the effects of SAPs, can be found in: Toussaint, E. and Millet, D., (2010). Debt, the IMF, and the World Bank: Sixty Questions, Sixty Answers. Monthly Review Press."
3. Chang, H. J. (2002). Kicking away the ladder: development strategy in historical perspective. Anthem Press.
4. Patnaik, U., & Patnaik, P. (2021). Capital and imperialism: Theory, history, and the present. Monthly Review Press.
5. Hickel, J., Dorninger, C., Wieland, H., & Suwandi, I. (2022). Imperialist appropriation in the world economy: Drain from the global South through unequal exchange, 1990–2015. Global Environmental Change, 73; Hickel, J., Sullivan, D., & Zoomkawala, H. (2021). Plunder in the post-colonial era: quantifying drain from the global south through unequal exchange, 1960–2018. New Political Economy, 26(6).
6. Weisbrot, M., Baker, D., & Rosnick, D. (2020). The scorecard on development: 25 years of diminished progress. In Neoliberalism, Globalization, and Inequalities (pp. 179-201). Routledge. Davis, Mike. (2006) Planet of slums. Verso. Klein, N. (2007). The shock doctrine: The rise of disaster capitalism. Macmillan. Abouhard, M.R. & Duchesne, E., (2019). ‘Economic development and the World Bank.’ Social Sciences 8(5), p. 156. Vreeland, J.R. (2003). The IMF and economic development. Cambridge University Press.
7. For a discussion of how China avoided the most extreme reforms see, Weber, I.M., (2021). How China Escaped Shock Therapy: The market reform debate. Routledge.
8. Patnaik, U., & Patnaik, P. (2017). A Theory of Imperialism. Tulika Books, p.114.
9. Sullivan, D., Moatsos, M., & Hickel, J. (2023). Capitalist Reforms and Extreme Poverty in China: Unprecedented Progress or Income Deflation? New Political Economy.
10. Pandey, A. (2019). 'Hunger and the state: a comparative case study of Cuba and India.' Studies in Political Economy 100(2), pp. 180-193. Yaffe, H. (2020). We are Cuba! How a revolutionary people survived in a post-Soviet world. Yale University Press. Fitz, D. (2020). Cuban health care: The ongoing revolution. Monthly Review Press.
11. For a discussion of Cuba's food system, including its limitations, see Cumbrera, O.M., et al. (2021). 'State and life in Cuba: calibrating ideals and realities in a state-socialist system for food provision.' Social Anthropology 28(4), pp. 803-826. Benjamin, M. (2015). 'Dividing the pie: Cuba's ration system after 50 years.' Codepink.
12. Lamrani, S. (2013). The economic war against Cuba: A historical and legal perspective on the U.S. blockade. Monthly Review Press.
13. Sullivan, D. and Hickel, J. (2022). "16 million and counting: the collateral damage of capital", New Internationalist.