Economic Structured Adjustment Program ( Esap ) - 891 Words

Economic Structured Adjustment Program (ESAP) It was a World Bank and IMF, 5 year inspired program that was used to counter any economic crisis arising in developing economies. It was a prescription to cure the economic mess, especially in developing countries, in my case Zimbabwe. â€Å" ESAP is a top-down economic strategy which is designed to resuscitate an economy using massive doses of foreign exchange(acquired mostly through loans) and hugely increased exports† (Coltart, 1992). In 1980, Zimbabwe after being liberated, the government vigorously invested in all sectors of the economy (health, education, mining, universal access to services). But to the negative, it led to the government budget deficits the mid-1980s. This forced the government to look for ways to finance its excessive expenditure. Zimbabwe was then persuaded to implement ESAP. The programme was to run from year 1991 to 1995. ESAP was a package with instruments to be adhered to, and these were the components: 1. Removing price controls 2. Removing wage controls 3. Reduction of government expenditure through privatization 4. Removing controls on exchange rates 5. Removing subsidies on basic goods The basis of these components was to let the market control the economy and make the government small thereby cutting the expenditure. Negative Outcomes-The Effects of ESAP The outcomes were not as expected: Privatization is the process of transferring ownership of aShow MoreRelatedThe International Monetary Fund And The World Bank Were1419 Words   |  6 Pagesmainstay of the post-war global economic order. The World Bank s focus is the provision of long-term loans to support development projects. The IMF concentrates on providing loans to stabilize countries with short-term financial crises Critics of the World Bank and IMF have argued that policies implemented by African Countries, intended to control inflation and generate foreign exchange to help pay off the IMF debts, often result in increased unemployment, poverty and economic polarization thereby impedingRead MoreAnz Bank142091 Words   |  569 Pagesactivities of the Group. The adjustments made in arriving at cash profit are included in statutory profit which is subject to audit within the context of the Group statutory audit opinion. Cash profit is not audited by the external auditor, however the external auditor has informed the Audit Committee that the adjustments have been determined on a consistent basis across each period presented. Refer to  page 15 and pages 206 to 207 for analysis of the adjustments between statutory profit and cash