Social Rights Under Adjustment: a tale of two crises

17 &24 May 2021, 02h00pm (GMT +01:00)



In a situation of balance of payment or public finance crisis, countries and governments have to face a hard choice between default on external debt or an IMF loan. Between a rock and a hard place most in the past have chosen the IMF loan. The agreements with the IMF are conditional on the adoption by the loan recipient country of a structural adjustment programme (SAP), which consists of a set of measures designed to correct ‘structural imbalances’. Supposedly those measures are tailored to the national context. However, examination of past programmes reveals that SAPs follow a series of principles that remain constant across countries and time, namely fiscal consolidation, disinflationary internal devaluation, privatization, and exportation-driven growth. The agreements are presented as the result of a ‘negotiation’ between the IMF and the national governments, where the latter alone are responsible for the implementation of the measures listed in the document. This opens a new road for discussion: is conditionality compatible or in conflict with ownership? In other words, how is it possible to understand SAP’s implementation as a condition to receive a loan and as a package ’owned’ by the national governments in charge of its implementation (which exempts external actors from assuming responsibility for any of the consequences arising from the reform process)?

Whether they are perceived as an imposition, as a decision from the national government or as the outcome of a negotiation between the parties involved, it is important to acknowledge that SAPs have serious (and mainly negative) implications in social policies and social rights. Social policy informed by the Washington Consensus (or what remains of it) tends to favour individual risk management, strengthen targeting, reduce benefits, and increase conditionality. In spite of the fact that the IMF is an institution in the United Nations system, SAPs, in general, both by their design and their consequences are in conflict with UN Human Rights declarations, a situation that can be worsened over time, as these measures might result in the deepening of the recession and therefore the deterioration of economic, social and political conditions.As a consequence of the financial crisis of 2008 and the euro crisis of 2010-2011, Portugal’s government chose the IMF option. In 2011, a Memorandum of Understanding (MoU), that outlined the ‘adjustment’ measures the country was to adopt, was signed between the Portuguese government and Troika (IMF, Central European Bank and the European Commission) as a counterpart of the financial support received. The research project ‘Art. 63 – ‘Social security rights and the crisis? Social retrenchment as the normality of the financial state of exception’ examines the effects of the ‘adjustment’ in the redesign of the Portuguese social policies and the social security system.

In respect to its origins, the socioeconomic crisis set in motion by the COVID-19 pandemic bears little resemblance to the previous crisis episode. Nonetheless, at least in the case of Portugal, both crises are entangled. Firstly, because the previous one seriously impacted the social security system and reduced its capacity to respond to economic downturns. Secondly, because the COVID-19 crisis may evolve into a deep and prolonged crisis engulfing the whole economy from production to finance and opening a window of opportunity for ideas of austerity and internal devaluation to return.

The policy response to the pandemic so far has been based on emergency measures meant to contain unemployment and insure minimal income, targeting not only people covered by social protection but also old and new vulnerable groups. Is this response merely temporary? Are we to expect a return to an approach to the crisis based on internal devaluation and social policy adjustment? How can the experience of the previous crisis inform current decision-making? And what can we learn from other experiences?

This conference will explore the effects of crises and SAPs in social rights in different national contexts. We expect to: (1) compare the impacts of SAPs in Portugal and in other countries, and (2) foster the debates regarding (a) the identification of similarities and specificities and (b) lessons learnt. We also encourage the discussion on how to promote and strengthen social rights during and after the COVID-19 emergency.

Open participation with mandatory registration via email:

Org: Maria Clara Oliveira (IDEFF), Tiago Oliveira (CES) and José Castro Caldas (CoLABOR)