Structural Adjustment as Development Strategy? Bananas, Boom, and Poverty in Somalia

Abstract

The World Bank and the International Monetary Fund have become the most powerful macroeconomic development strategists in the Third World. Structural Adjustment Program (SAP) is the code term for their main strategy. One of SAP's objectives is to induce a business climate attractive to investors in Africa. Such investments are supposed to enhance productivity and economic development. This study evaluates Somalia's banana industry and associated foreign investment in the 1980s. The analysis shows that foreign investment modernized banana production and increased exports, but did not improve the starvation wages of plantation workers. Moreover, since nearly 75 percent of the earnings from exports leave the country, such investment does not enhance Somalia's capital accumulation fund.

Key words:

• development
• national accumulation
• wags
• working condition
• socialism
• capitalism
• government
• World Bank
• IMF
• foreign investment