REFORMULATION OF MODELS
Although there seems to be some convergence on the part of the International Monetary Fund (IMF), the World Bank, and many financial institutions in their approach to African development, there are alternatives coming from the U.N. agencies and African and Africanist scholars. The United Nations Economic Commission for Africa (UNECA) produced a report, African Alternative Framework to Structural Adjustment Programmes for Socioeconomic Recovery and Transformation, which spells out the possibilities for the African continent to overcome the crisis of African economic development as arising from the structural deficiencies of the African economies.
UNECA argues that conventional structural adjustment programs that Africa has been pursuing have failed to overcome the economic crisis and in many cases have made recovery even more difficult. UNECA maintains that even though African governments have been implementing IMF and World Bank inspired policy reforms, the hardships are increasing, the stability is being undermined, and the capacity to service growing external debt is declining. UNECA attacks some very fundamental policies of adjustments, such as exchange rate policies involving substantial devaluations, the liberalization which cannot be carried to its logical end because of protections and practices, increased interest rates and pricing policies of industrialized countries, privatization, and tight credit policies.
Among the policy measures advocated by UNECA are multiple exchange rates, limits on debt service payment to allow more resources for development, selective subsidies, and price controls. The chapter also calls for cuts in defense spending and in nonproductive activities in the public sector. Among many other recommendations are the limited use of deficit financing for productive and infrastructural investments and differential export subsidies.