Activity - SAP

Group name: Date: 16/10/2024
Abrea, Wince Joseph Program& Block: BSED 4-1 SCIENCE

Burabod, Cairo A.
Batoy, Diang P.
Estiandan, Febbe Eda B.
Rupenta, Ashiene
Said, Sadama I.
Padul, Jared Kane A.
Activity: Impact Assessment of Structural Adjustment Programs
STRUCTURAL ADJUSTMENT PROGRAM (SAP)
Structural Adjustment Programs (SAPs) are economic policies and reforms that
countries must implement to secure loans from the International Monetary Fund (IMF) and the
World Bank. These programs aim to address economic crises, improve international
competitiveness, and restore balance of payments.
The IMF uses SAP to manage its financial and human resources operations. The
organization implemented SAP in 2002 to replace its legacy systems and improve its financial
management processes. SAP enables the IMF to manage financial transactions and reporting,
budgeting, procurement, and asset management more effectively, and to comply with internal
controls and external regulatory requirements. The IMF also uses SAP for human resources
management, including payroll, benefits administration, and time and attendance management.
The World Bank implemented SAP as part of its modernization program in the 1990s.
The organization uses SAP to manage its financial, procurement, and human resources
operations. SAP enables the World Bank to manage its financial transactions and reporting,
including budgeting, accounting, and financial planning. It also manages its procurement
processes, from requisition through to payment, and includes features that promote
transparency and compliance. SAP is also used for human resources management, including
payroll, benefits, and talent management.
While SAPs are designed to promote economic stability and growth, they have been
criticized for leading to social hardships, such as reduced public services and increased poverty.
The impact of SAPs varies across countries, with some experiencing economic improvements
and others facing significant challenges.
IMPACT OF IMF SAP

1. Afghanistan: In 2013, the IMF provided technical assistance to the government of
Afghanistan to implement SAP as part of the country's public financial management reform
program. The implementation covered financial management, budget preparation, accounting
and reporting, procurement, and human resources management.
2. Greece: In 2010, the IMF provided technical assistance to the Greek government to
implement SAP as part of the country's public sector reform agenda. The implementation
covered financial management, procurement, and human resources management.
3. Rwanda: In 2012, the IMF provided technical assistance to the government of Rwanda to
implement SAP as part of the country's public financial management system. The
implementation covered financial management, budget preparation, accounting and reporting,
procurement, and human resources management.
4. Tunisia: In 2011, the IMF provided technical assistance to the Tunisian government to
implement SAP as part of the country's economic reform program. The implementation covered
financial management, budget preparation, accounting and reporting, procurement, and human
resources management.
5. In Indonesia, the SAPs initially led to more economic growth, with GDP increasing
significantly during the 1990s. The liberalization of markets and encouragement of foreign
investment contributed to a rapidly expanding economy, which helped reduce poverty levels.
Despite initial economic gains, the focus on austerity and deregulation often undermined public
welfare. Cuts in government spending reduced investment in critical infrastructure and social
services, leading to disparities in access to basic needs, particularly in rural areas. The
reduction in public funding significantly impacted education and healthcare services. Many
people experienced decreased access to quality education and healthcare, exacerbating
inequality. While the economy grew, the benefits were not evenly distributed, leaving vulnerable
populations without adequate support.
IMPACT OF WORLD BANK SAP
1. Ghana: In 2012, the World Bank provided support to the government of Ghana to implement
SAP as part of the country's public financial management (PFM) reforms. The implementation
covered financial management, budget preparation, accounting and reporting, procurement, and
human resources management.
2. Nepal: In 2019, the World Bank provided technical assistance to the government of Nepal to
implement SAP in the country's provincial and local governments. The implementation aimed to
improve financial management and accounting practices, and enhance transparency and
accountability.
3. Uzbekistan: In 2019, the World Bank provided support to the government of Uzbekistan to
implement SAP as part of the country's public sector reform program. The implementation
covered financial management, procurement, and asset management.
4. Zimbabwe: In 2015, the World Bank provided technical assistance to the government of
Zimbabwe to implement SAP in the country's public sector. The implementation covered
financial management, procurement, and human resources management.
5. In the Philippines, there have been five foreign financing-inspired programs in the recent
past:the 1976-79 Extended Fund Facility(EFF) from the IMF, the two Structural Adjustment
Loans(SAL) obtained from the World Bank in the period of 1980-85, the World Bank sectoral
loan for agricultural inputs,and the World Bank economic recovery loan.The facility gave a
three-year financing valued at SDR 217 million (about US $250 million). Three major areas of
structural reform were identified in the program:
a.) infrastructure investment;

b.)tax reform; and
c.) resource allocation. But according to a 1984 IMFevaluation (Thompson and Slayton 1985,
p.65), progress "as regards the structural aspects of the program were not evident." In August
1980, a year and a half after the failure of the EFFprogram, Cesar Virata sent a letter to World
Bank president Robert McNamara which contained a set of intentions about Philippine industrial
policy.These were:
a.Lowering of protective tariffs;

b.Liberalizing import restrictions;
c.Taking action to promote and facilitate exports and investment
in export oriented industries;
d.Following a flexible exchange rate policy.., to reflect basic market forces;"and
e.Restructuring specific industrial sectors to integrate them in
the overall export effort.This set of intentions formed the foundation of the Philippines Structural
Adjustment Loan(SAL) with the World Bank.They used as the basis the Five Year Development
Plan 1978-1982.
CONCLUSION
In conclusion, Structural Adjustment Programs (SAPs) are designated to promote

economic stability, growth and improved international competitiveness in countries seeking
financial aid from the IMF and World Bank. While these programs often emphasize fiscal
discipline, market liberalization, and public sector reforms, their impacts vary significantly across
countries. Some nations such as Indonesia, have initially benefited from increased economic
growth and foreign investment, but these gains have not always been evenly distributed, leaving
vulnerable populations exposed to greater inequality. Other countries, like Zimbabwe and
Greece, have faced social hardships, including reduced access to education, healthcare, and
public services due to austerity measures.
Although SAPs can improve financial management and transparency in governance,

they often come at the cost of social welfare, particularly in developing nations. The reduction in
government spending on social infrastructure can exacerbate poverty and limit access to basic
needs, especially in rural and underserved areas. The overall success of SAPs largely depends
on the specific economic and political context of each country and how effectively the reforms
are tailored to address local challenges. While the goals of SAPs are well-intentioned, balancing
economic reforms with social protection is crucial to ensure long-term, equitable development.
REFERENCES:
International Monetary Fund (IMF):

https://newsbyte.com/2002/12/06/international-monetary-fund-implements-sap/.
https://www.imf.org/~/media/Files/Publications/AR/2019/English/Operations-and-Finances.ashx.
World Bank:
https://news.sap.com/world-bank-to-implement-sap-r3-system/.
https://www.worldbank.org/en/about/annual-report/world-bank-annual-report-2020.
What Are Structural Adjustment Programs (SAPs)? (investopedia.com)
Afghanistan:
https://www.imf.org/en/Publications/CR/Issues/2016/12/31/Afghanistan-Technical-Assistance-Re
port-on-Public-Financial-Management-Reforms-42092.
Greece:
https://www.imf.org/en/News/Articles/2015/09/14/01/49/pr10349.
Rwanda:
https://www.imf.org/en/News/Articles/2015/09/14/01/49/pr12406a.
Tunisia:
https://www.imf.org/en/Publications/CR/Issues/2016/12/31/Tunisia-Staff-Report-for-the-2011-Arti
cle-IV-Consultation-and-Proposal-for-Post-Program-26015.
IMF. (2021). "Indonesia: 2021 Article IV Consultation-Press Release; Staff Report; and
Statement by the Executive Director for Indonesia.” Jha, R. (2008). "Social Impact of Structural
Adjustment Programs in Indonesia.”
Ghana:
https://www.worldbank.org/en/news/feature/2012/09/25/world-bank-group-assistance-to-ghanas
-public-financial-management-reforms.
Nepal:
https://www.worldbank.org/en/news/press-release/2019/08/23/world-bank-supports-nepals-ict-dr
iven-provincial-and-local-governance-reforms.
Uzbekistan:
https://www.worldbank.org/en/news/press-release/2019/05/28/world-banks-program-supports-u
zbekistans-public-sector-reforms
Zimbabwe:
https://www.worldbank.org/en/news/press-release/2015/08/12/world-bank-provides-zimbabwe-w
ith-us100-million-for-public-sector-reform.
Philippines:
Montes M.(1988). Review of Structural Adjustment in the Philippines. Journal of Philippines
Development. Number twenty-seven, Vol. XV. No.2, 144-145.

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Group name: Date: 16/10/2024

Abrea, Wince Joseph Program& Block: BSED 4-1 SCIENCE

Activity: Impact Assessment of Structural Adjustment Programs

STRUCTURAL ADJUSTMENT PROGRAM (SAP)

IMPACT OF IMF SAP

IMPACT OF WORLD BANK SAP

a.) infrastructure investment;

a.Lowering of protective tariffs;

In conclusion, Structural Adjustment Programs (SAPs) are designated to promote

Although SAPs can improve financial management and transparency in governance,

International Monetary Fund (IMF):

What Are Structural Adjustment Programs (SAPs)? (investopedia.com)

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