The Council on International Educational Exchange
has developed a series of faculty development seminars that receive
high praise from their participants for organization, substance, and
long-term value to the faculty, their students, and their institutions
These seminars are short-term, intensive overseas
experiences that take faculty from many disciplines to all corners
of the earth -- Australia, Russia, Zimbabwe, Turkey, Haiti, Belgium,
Turkey, etc.
The seminars are open to academics from two-year
and four-year institutions. About 85% of participants are faculty
and 15% are administrators. Seminars are 7 to 13 days in length and
are heavily scheduled. Each is organized around a theme, such as Economic
Reform, Regional Integration, and Democratization in Argentina and
Chile; the Historic Cities of China; Jordan and Geopolitics; Economics,
Polity, and Religion in Turkey; London as Text: Art, Theatre, and
Cultural Identity. The majority of participants have significant funding
supporting from their home institutions.
Participants are urged to complete reading
assignments prior to the trip. During the seminar, participants hear
presentations and visit economic, educational, environmental, historical,
political, religious, and social institutions. Each seminar is hosted
by an overseas academic institution and includes opportunities to
meet academic counterparts.
One of the main objectives of these seminars
is to enhance the course content of individual professors. But another
benefit is to "internationalize the curriculum" of the larger institution.
What this means depends on the institution. Joti Sekhon attended a
South Africa seminar and teaches at Greensboro College, NC, where
funds are limited for international research. She brought back a broadened
global perspective for her classes on minority relations, social stratification,
and race issues, and shared her experience at conferences and informally
around the campus. For Richard Payne, who went to Costa Rica and specializes
in eco-tourism at Sam Houston State University, TX, internationalization
has helped him develop a long-term relationship with an institution
in Costa Rica, and become a better advisor to U.S. and international
students. And for Glenn Kist of Rochester Institute of Technology,
a professor of history who went to Argentina, Chile, and Brazil, internationalization
has meant developing vast quantities of topical course content in
a short time for his Latin American history courses and broadening
his awareness of study abroad opportunities for students back home.
The seminars are designed to be short and intense.
(Payne sees the seminars as a good way to assist faculty who have
heavy teaching loads achieve their research objectives.) That is their
strength and their weakness. The individual participant must make
the effort to process the experience to his or her own benefit and
for the larger campus. Sekhon calls the seminars a catalyst rather
than a product.
For some, the chemistry with other academics
on the seminar is of primary benefit. Payne formed an association
with another member of his cohort that has blossomed into collaboration
on research and grant applications. He was able to expand his relationship
with the Costa Rican host institution, the Monteverde Institute, into
a visiting lecturer position and place research assistants there.
If you have questions regarding application, contact the International
Faculty Development Seminars at 1-800-40-STUDY.
Submitted by:
Dr. Jackie Murray Brux
Professor of Economics
University of Wisconsin-River Falls
March 1, 2000
This paper is a comparative analysis of
three countries undergoing structural (economic) reform. It is the
result of comparative research, professional exchange with international
faculty, and participation in short-term international faculty development
seminars in Chile (1992), Vietnam (1996), and Ghana (1998). 1
It demonstrates the value of international education and exchange
for university faculty.
STRUCTURAL REFORM
The term structural reform is used interchangeably
here with the term economic reform. The term is used broadly to
represent a mix of policies designed to foster a transition from
a socialist or government controlled economy to one more amenable
to the market place. While structural reforms have been most publicized
in the formerly socialist economies of Eastern and Central Europe,
they have also been adopted in varying degrees by the majority of
the less developed countries (LDCs) of Asia, Africa, and Latin America.
The Phases of Reform
Often there are three distinct, but interdependent
phases of structural reform. First, a "stabilization" phase reflects
efforts to bring under control various macroeconomic indicators,
principally inflation rates and balance of payment deficits. Policy
in a second phase seeks to alter the underlying "structure" of the
economy, in terms of a shift from government controlled prices to
market determined ones, from government owned enterprises to privatized
ones, and from protectionist trade policies to liberalized ones.
A third and final stage envisions a transformation of not just the
economy, but a broader "transformation" whereby corruption and mismanagement
are reduced, direct foreign investment encouraged, infrastructure
improved, and the social sector developed. In many cases, elements
of these three phases overlap and take place simultaneously.
The History Behind Reform
For much of the less developed world, the
embrace of structural reforms was not necessarily a voluntary one.
As a result of rising prices of oil and other imports in the 1970s,
coupled with LDC desires for modernization and encouraged by low
interest rates and abundant "petrodollars" available for borrowing,
many developing countries took on sizeable debt during the time
period. While some of the borrowed funds went into productive use,
much was used to raise domestic consumption levels, to finance grandiose
and inefficient modernization schemes, to line the coffers of corrupt
government officials and their cronies, and to leave the country
in the form of capital flight. To make a bad situation worse, worldwide
recession in the early 1980s, along with rising U.S. interest rates,
increased value of the dollar, and declining terms of trade for
LDC commodities made debt service obligations of indebted developing
countries an impossible burden. Moratoria and default on debt service
became a pattern, and the financial affairs of indebted LDCs collapsed.
2
After a series of plans and programs directed
by the U.S. and other Western governments and in consultation with
debt-owning commercial banks and international organizations, a
pattern of agreements negotiated on a country-by-country basis emerged.
It is these agreements, now principally under the domain of
the International Monetary Fund (IMF), that form the basis of the
structural adjustment programs and policies that are creating the
epoch-reaching transition to market determined economies that we
see in the less developed world today. Each individual country is
different, however, with differing reform packages and varying degrees
of success. This is evident in the three case studies that follow.
THE SEMINARS
Three international faculty development seminars,
all sponsored by the Council on International Educational Exchange
(CIEE) and hosted by foreign institutions at various times during
the 1990s, form the basis for the case studies. In each case, the
foreign institutions provided faculty speakers, written material,
and opportunities for collegial exchange. CIEE and directors of
the seminars also arranged for many additional expert speakers,
site visits, and additional materials. The speakers cited in this
paper represent just a portion of the total number of excellent
speakers in each of the seminars.
THE CASE STUDIES
The three countries chosen as case studies—Chile,
Vietnam, and Ghana— represent an array of the variation in LDC structural
reform. While they differ widely in terms of their geography, history,
culture, and politics, they also share many similarities in their
economic reform packages and contend with many similar issues. And
while not necessarily representative, they do encompass the three
less developed regions of Latin America, Asia, and Africa.
CHILE
Visitors to Santiago, the capital city of
Chile, are struck by the incredible amounts of air pollution, congestion,
traffic, and busyness of the Chilean population. Surprisingly, not
too many examples of poverty abound. It takes a more fervent investigator
to find the tremendous poverty that lies behind the scenes, literally
behind the walls of the slums outside of the city. Chile is truly
a country with a wide barrier between rich and poor.
Of the three countries under consideration,
Chile has the highest level of GNP per capita (gross national product,
or roughly income, per person, on average) at $4,810 in 1998. 3
It is one of the leading industrial nations in Latin America, and
also exports fruit, wheat, and other products. Chile is a fascinating
case study in terms of its recent political and economic history.
And while leaders of all political parties agree that Chile grew
rapidly under its period of structural reforms, they differ widely
as to the nature and distribution of the benefits of this economic
growth.
Background
1960s-early 1970s. Under the Presidency
of Christian Democrat Eduardo Frei (1964-1970), Chile forged ahead
with modernization while attempting to placate the left with its
reformist policies. Both the rightist parties and the United States
Central Intelligence Agency had been instrumental in Frei’s election.
Under Frei, Chile received massive doses of U.S. foreign aid; after
all, Chile was a ‘model’ country in terms of keeping the left at
bay. Ultimately, Frei and the Christian Democrats alienated both
the left and right, and in 1970, leftist Salvador Allende was elected
President. Allende tried to implement a social revolution without
major backing from Congress. His policies of import substitution
industrialization 4 , nationalization, and heavy borrowing
and printing of money tore apart both the Chilean society and economy.
A military regime under the leadership of Augusto Pinochet ousted
Allende in 1973. 5
Middle 1970s-1980s. The Pinochet era
(1973-1990) was a period of reform and repression. Human rights
violations flourished, including execution and torture, and particularly
targeting the poor, organized labor, journalists, and educators.
(Social science programs in the universities were shut down, and
university administrations were replaced by the military. A whole
generation of social scientists, as well as social science research,
was lost, creating an eerie academic emptiness that is still felt
today.) Politically, Pinochet’s agenda was to destroy political
parties and the party system. Economically, students of the ‘Chicago
School of Economics’ were brought in to dismantle import substitution
industrialization, restore nationalized enterprises to their private
owners, privatize state institutions, eliminate most social programs,
and generally embrace structural reforms. Indeed, Chile has experienced
the longest history of economic reform in all of Latin America.
Most agree that while economic performance was good, Chilean society
suffered immeasurably under the brutal rule of Pinochet.
Late 1980s-1990s. In 1988, a plebiscite
was held to determine whether Pinochet should continue to rule as
President for the next eight years. A majority ‘no vote’ set the
stage for new elections in 1989. Christian Democrat Patricio Aylwin
was democratically elected, and began his four-year term in 1990.
Aylwin’s center-left coalition government ended when Christian Democrat
Eduardo Frei, son of former President Eduardo Frei, was elected
as President, beginning a six-year term in 1994.
The New Millennium. New elections
in the year 2000 validated the process of Chilean democracy, and
ushered in a socialist president by the name of Ricardo Lagos. With
the pledge of reducing income inequality and poverty, Chile may
well become the leader of a new Latin American movement to restore
social justice to the region.
The Seminar
With the end of military rule as the backdrop,
the 1992 faculty seminar entitled "Chile After Pinochet: The Challenges
of Reestablishing Democracy" was hosted by the Catholic University
of Chile in Santiago and directed by Dr. Arturo Valenzuela, a leading
expert on Chilean politics.6 The seminar afforded ample
opportunity to examine the structural reforms in the context of
the newly elected democratic regime.
According to Valenzuela in his opening remarks,
Chile’s political system with its coalition government is an exception
to the typical two-party system in much of Latin America. Under
a coalition government, the views of all political parties are important,
and politics intertwines with economics. Furthermore, whereas the
rightist and leftist parties in much of Latin America are somewhat
similar to each other, Chile’s multi-party system has sharply differing
political parties. Despite Pinochet’s objective to do away with
the party system, most Chileans seem very attached to the notion
of political parties. As with much of Latin America, political parties
are important factors in the student movement, unions, professional
organizations, and many other facets of society.
The Center
Genaro Arrigada, the National Secretary for
the Christian Democratic Party, was responsible for aligning the
‘no vote’ to end the leadership of Augusto Pinochet. His description
of the ‘middle of the road’ policies with respect to economic growth
and the needs of the poor place the political persuasion of the
Christian Democratic Party somewhere in the center. Arrigada stated
that he is conservative with respect to macroeconomic growth and
structural reform. He is pleased with the low fiscal deficits and
low inflation, and believes that reliance on the market place is
the way to improve the economy. Nevertheless, unlike Pinochet, Arrigada
believes that the state should take responsibility in providing
education, health care, infrastructure, and policies designed to
meet the needs of the poor. He argued that close to half of the
nation’s poor cannot be helped through economic growth alone
and depend on the state for help. Poverty is rising and there is
extreme income inequality, both of which can be reduced via government
policy. Assistance programs should be targeted to small entrepreneurs
and the poor, retraining should be provided for displaced coal miners
and agricultural workers, taxes should be restructured to improve
income distribution, and the government should invest more heavily
in education, health care, and other services, especially for the
poor and for rural residents.
The Right
The Independent Democratic Union Party (UDI),
represented by Hernan Larrarn, is clearly to the right of the Christian
Democratic Party. It had its beginnings in the early 1960s at the
Catholic University with students concerned that the country was
headed to socialism. The UDI, along with students of the ‘Chicago
School of Economics’, promoted freedom, private enterprise, and
minimal state intervention in the economy. The UDI is dedicated
to leading a new popular movement to defeat communist and socialist
elements within Chile’s government. Larrarn supports government
subsidies for people to choose private health care and vouchers
for parents to choose schools for their children. The government
should play an important role in developing research and infrastructure,
though environmental problems should be solved through the private
sector. Larran supports an immediate elimination of tariffs and
a program of export-led growth, with emphasis on diversification.
He believes that privatization is the way to create economic growth
and that a focus on equity cannot achieve such growth. He sums up
the rightist position by stating that "The first way to help the
poor is through economic development; we must increase the size
of the ‘torta’ rather than redistribute the slices."
The Left
At the opposite end of the spectrum, the
Communist Party of Chile focuses more on equity and redistribution
than on economic growth. Jaime Insunza, a member of the Central
Committee of the Communist Party, argued that while there is an
important role for the market place in the economy, it should not
hold the prominent place. The structural reforms have created much
hardship, and there is a need for much more government planning
and involvement in the economy. Of particular concern are the large
numbers of youth who are not in the school system, the youth in
poorer community schools and isolated areas with very poor education,
the poor who are heavily burdened with taxes, the indigenous people
whose rights have been denied, other small landholders who have
lost their land, the large share of the labor force that must work
overtime in the informal sector in order to receive adequate incomes,
the seasonal agricultural workers who find work only during part
of the year, the large number of workers who receive declining real
minimum wages, and the many workers who have been displaced from
their jobs.
Insunza argued for a new left social movement
encompassing the redistribution of income, nationalization and ‘transnationalization’
(of foreign enterprises), sustainable development, the rights of
people, job training and increased wages, reduced spending for the
military, and greater government regulation. He also maintains that
Chile should initiate the second phase of export promotion, contributing
more value added rather than continued export of raw natural resources.
He summarized his party’s concern for the poor by referring to an
earlier statement of Central Committee members that "God created
the world equally, but governments divided it up unequally". There
is a lack of solidarity in Chilean society and too much individualism.
Under current policy, conditions will only worsen.
In Addition
In addition to these four speakers, there
were also meetings with the U.S. Ambassador to Chile and the Director
of the National War Academy. There were additional presentations
made by Catholic University faculty, representatives of the Ford
Foundation, and other government and party officials. The President
of the Chamber of Deputies presided over a visit to Congress in
session with the President’s chief of staff and budget director
present. A presentation by Roberto Mendez of the public opinion
survey firm of Adimark indicated that over 80% of the Chilean population
is optimistic regarding the economy, which is the highest ever recorded.
The Chilean people’s political identification, as of August 1992,
was approximately 23% on the right, 22% in the center, 31% on the
left, and 24% independent. Mendez argued that capitalist views are
replacing the 1960s-early 1970s ideology that opposed free markets.
Finally, I was graced with a tour by a delightful
intelligent woman of the base community in Pudahuel, a poor ‘barrio’
on the outskirts of Santiago. Through the openness and generosity
of her and her friends and neighbors, I received first-hand accounts
of the conditions of poverty, limitations of government help, and
self-help initiatives of the slum residents themselves.
VIETNAM
Vietnam is pursuing a largely successful
transition from a centrally planned economic system to one that
is more amenable to the market. The term that is used by the Vietnamese
is ‘doi moi’, or ‘renovation’. The changes are most evident to outsiders
in the flow of Western business into the country since the thaw
of the cold war and the easing of relations with the West. However,
visitors to Vietnam can’t help but notice the energy of its people.
People are up before sunrise, urban shops open at daybreak, and
bicycles and motorcycles compete with cars and cyclos (bicycle-driven
passenger vehicles) along crowded urban streets.
The poorest of the three countries under
consideration, Vietnam’s low GNP per capita ($330 in 1998) places
the country among the poorest countries of the world. The industrial
and service sectors of the economy have been growing, but agriculture
still represents a significant share of the economy, and the majority
of the labor force works in agriculture. Crops include rice, cassava,
coffee, and forestry products. Thus, it is not surprising that Vietnam’s
population is primarily rural, in contrast to the heavily urbanized
population of Chile. The predominance of the rural sector is typical
for many South and Southeast Asian countries, such as Thailand,
Cambodia, and Bangladesh, as well as sub-Saharan African countries
such as Ghana.
Background
While U.S. citizens think of the War in Vietnam
when they conceptualize the country, the Vietnamese have a much
longer history of colonization and warfare. Nationalistic efforts
to remove first the Chinese and then the French and the Japanese
led to a period of struggle for national independence from 1945
to 1975, as well as a communist government and reunification of
the country in 1975.7 The Vietnamese victory in the American
war (1968–1975), as the Vietnamese refer to it, presented a favorable
context for the Vietnamese people to rebuild their country and to
try to catch up to the economic progress of the rest of the world.
However, the shortcomings of the socialist industrial model soon
became evident.8
Doi Moi
Like Chile before it, Vietnam is pursuing
a transition to a market-based economy. Unlike Chile, Vietnam has
a far more extensive background of socialism, which continues despite
many reforms. And, in contrast to the transition from socialism
in much of Eastern and Central Europe, the reform process in Vietnam
has focused on economic change, rather than a combination of economic
and political reform. While the Vietnamese government is still dominated
by the Communist Party, many feel that the extensive and successful
economic reforms that have taken place have set the stage for at
least modest political change.
The Seminar
With this background, the 1996 faculty seminar
in Vietnam, entitled "Contemporary Vietnam: Recovery, Renewal, and
Recognition" provided an excellent opportunity to better understand
the Vietnamese process of economic reform, along with its achievements
and its continued needs. The seminar was hosted by the Vietnam-USA
Society, along with its Vice Director Mr. Vu Xuan Hong and Mr. Hoang
Cong Thuy. The Vietnam-USA Society was founded in 1945 as the first
bilateral friendship organization in Vietnam. The program was directed
by Doan Ngoc Diep, Administration Director of the Council Study
Center in Hanoi (in care of the Quaker Service).9
1986–1989: Agricultural Reform
Vietnam’s first systematic program of economic
reform began in the agricultural sector in 1986. The initial policies
focused on changes in land tenure, liberalization (decontrol) of
farm prices, and removal of regulations on sales of agricultural
output. Prior to this, production had taken place on collective
farms, and agriculture was heavily taxed through a combination of
price controls and restrictions on procurement. Peasant households
are now recognized by policy makers as independent economic units
allocated with stable, long-term land use rights, with freedom to
transfer, exchange, mortgage, or lease the land. The peasants may
now also decide what to produce and whether to sell their produce
on the market.
Dr. Luu Trong Hieu is the Director of International
Programs and the Director of Research at the University of Agriculture
and Forestry, Thu Duc, in Ho Chi Minh City. According to Dr. Hieu,
the initial reform of the farm sector led to important successes.
Higher farm prices and the deregulation of farm sales created incentives
for production, and agricultural output climbed. Average paddy yields
increased from about 2.1 tons per hectare in 1980 to 3.6 tons per
hectare in 1994, and land under paddy cultivation increased by 600,000
hectares. Vietnam went from being a large importer of rice to being
the third largest world exporter of rice in just a few years. The
same agricultural reforms led to higher incomes of farmers, and
a drop in poverty rates in the rural sector.
One aspect that eased the transition from
communal farming to family farming is the labor-intensive nature
of Vietnamese farming. (Theoretically, it is more difficult to make
the shift under a capital-intensive farming system, as in Russia.)
Despite this labor-intensity, efficiency gains in the agricultural
sector enabled expanded farm output while still freeing up farm
labor to move into industrial and service jobs. Nevertheless, according
to Hieu, "the future performance of the (agricultural) sector will
be the main influence on living standards… (it) will be the mainstay
for rising real wages, increasing employment, and alleviating poverty".
1989–1990s: Generalized Economic Reforms
Economic reforms accelerated and spread to
the non-farm sectors in 1989. According to Professor Vu Dinh Cu,
an expert on renovation in Vietnam, additional reforms envision
the following:
- the decontrol of most product prices,
- an increase in real interest rates,
- a unified exchange rate and devalued currency,
- reduced regulations on trade and investment,
- the encouragement of new private business, including joint
ventures of foreign and domestic partners with the Vietnamese
government,
- the elimination of subsidies to many state-owned enterprises
(SOEs), and the streamlining of their operations, and
- monetary restriction and reform of the banking and tax systems.
The most prominent of the liberalization
policies was the 1989 decontrol of prices (agricultural prices having
been already decontrolled). The Vietnamese refer to this as "a single
system of prices" (as opposed to a "two price system" of official
and unofficial prices). Price decontrol occurred rapidly on most
of the remaining commodities. (Exceptions include power, postal
services, water, cement, and fertilizers.) The policies to decontrol
interest rates and currency values were also very important in improving
domestic savings rates and export levels respectively.
While product price liberalization occurred
very quickly, Vietnam is taking a slower pace toward privatization.
According to Professor Cu, some sixty thousand small and medium-sized
private businesses had been created by 1996, and according to the
World Bank, over 800,000 small private businesses were established
by 1998. However, it is also true that the state continues to own
a large share of the nation’s enterprises, particularly the industrial
ones. Indeed, the pattern of privatization is one that is unique
to Vietnam, and is referred to as "a multi-sector economy" (with
private and government sectors). It is a cautious approach, with
the goal of avoiding the massive unemployment created in other transition
economies. It retains an important role for the state, and emphasizes
competitiveness over privatization.
Like the agricultural reforms, this second
phase of Vietnamese reform was also successful, but not without
some temporary hardship. According to the World Bank, the rapid
elimination of subsidies and the streamlining of SOEs that took
place in this second phase resulted in the loss of five thousand
Vietnamese enterprises. (Three thousand of these were merged to
other state firms, and two thousand actually shut down.) As a result,
some 900,000 workers (one-third of all industrial workers) lost
their jobs during the time period 1988 to 1992. However, many workers
were given financial allowances to facilitate their search for new
jobs. And, jobs were quickly restored by the rapidly expanding private
economy, enabling output to expand dramatically. Much of this expansion
was in the labor-intensive manufactured goods in which Vietnam has
a comparative advantage, and efficiency was enhanced in both privately
owned and state-owned enterprises.
1990s: The Environment
Dr. Le Thac Can of the Hanoi National University
believes that environmental degradation is rapidly becoming a serious
problem in Vietnam. In terms of natural resources, deforestation
has been occurring at a rate of 1.4 percent per year over 1990 to
1995. According to an article by Dr. Can and his colleague Vo Quy,
10 "Deforestation has led to serious impacts on water
resources, soil erosion, loss of wildlife, and deterioration of
landscape and climatic factors". The United Nations and others have
been financing reforestation efforts, and reforestation has been
occurring at a rate over 100,000 hectares per year during the 1990s.
According to Dr. Can, several other efforts
are underway to reduce environmental degradation, including policies
to address the problem of rural-urban migration. With major cities
becoming ever larger, Can believes that rural development and lower
urban/rural salary differentials are necessary to encourage rural
people to stay in the countryside. Programs of rural development
would include rural credit, commercial income-generating opportunities,
provision of water, and development of transportation infrastructure
to link rural villages to urban markets. All of these should improve
rural conditions and thereby encourage rural residents to remain
where they are.
Many of the programs indicated above are
receiving help from the United Nation’s children’s program (UNICEF),
the World Bank, the United Nations Development Program, and
various non-government organizations. According to Can and Quy,
"Internal efforts combined with this external assistance are creating
favorable conditions for the implementation of sustainable development
in Vietnam."
In addition
In addition to these speakers, there were
also lectures on Vietnam’s art, music, and ethnic minorities. There
were also very informative visits to the Peace Village, an institution
where children affected by dioxin (Agent Orange) are given care
and medical treatment, plus several museums and other site visits.
Also, a meeting with a representative of the Vietnam Office of the
World Bank proved very informative about Vietnam’s programs of structural
reform.
GHANA
Like Vietnam, Ghana is one of the poorest
countries of the world. Its 1998 GNP per capita of $390 places it
well below Chile and slightly above Vietnam. Like Vietnam, the country
is heavily agricultural, and most workers are in the agricultural
sector. Subsistence food consists of maize, plantains, rice, yams,
millet, cassava, and peanuts. Cash crops include cocoa and cocoa
products (representing forty-five percent of all exports), timber
products, coconut and other palm products, shea nuts, and coffee.
Despite the significance of the agricultural sector, Ghana’s industrial
base is relatively advanced, at least in comparison with the poorest
of the sub-Saharan African countries. Import-substitution industries
include textiles, steel, tires, oil refining, simple consumer goods,
and vehicle assembly. As in Chile and Vietnam, the people of Ghana
are energetic and entrepreneurial, and the nation is struggling
to develop under a package of structural reforms.
Like Chile, Ghana is a country with inconsistencies
and inequality. Unlike Chile, Ghana’s poor sit side by side of the
rich. Extravagant homes are built next to squalid slums. Exquisite
hotels stand next to the homeless. Poor children who should be in
school accost wealthy tourists in an effort to sell some items for
money. The same entrepreneurial spirit that dominates the Chilean
and Vietnamese economies holds true for Ghana as well.
Background
Ghana’s history is a fascinating drama of
alternating economic policies. Portuguese traders arrived in present
day Ghana in 1471, exploiting the area’s gold and establishing headquarters
for their slave trade. Great Britain took control of Ghana is 1874,
and ruled the colony until 1957. At this time of independence, Ghana
was the richest country in sub-Saharan Africa and had the most educated
population. Kwame Nkrumah was the nation’s leader for the nine year
time period after independence, and he moved the economy away from
a relatively market-oriented one to a socialist one with state ownership,
import substitution policies, and export taxes. Nkrumah was overthrown
in a military coup in 1966 and the nation’s economy alternated between
liberalized and socialist policies until a military coup in 1979
once again changed the economic and political situation in Ghana.
Under the leadership of Flight Lieutenant Jerry Rawlings, the nation
turned to liberalized policies by December 1981, with the first
structural adjustment program introduced in 1983 and followed by
a second adjustment program in 1986. The structural reforms continue
today, and may or may not be affected by the new elections for President
to be held in the year 2000. 11
The Seminar
The 1998 faculty development seminar, entitled
"Ghana and the Dynamics of Economic Development", was hosted by
the University of Ghana in Legon under the leadership of Dr. Michael
Williams. Dr. Williams is the Resident Director of the Council Study
Center at the University of Ghana. A major portion of the seminar
focused on Ghana’s structural reforms.12
Economic Crisis
Dr. Kwesi Jonah and Dr. J.R.A. Ayee of the
Department of Political Science and Dr. Osei Barfour of the Department
of Economics, all at the University of Ghana, are experts in Ghana’s
structural reform. According to Dr. Jonah, the Ghanaian economy
was in a state of total collapse just prior to the structural reforms.
Productive activity had largely ceased. Farmers had plowed under
their cocoa trees and produced for subsistence instead of cash.
Exports, including cocoa, plummeted. Timber production stopped entirely,
since equipment was no longer available to cut and transport the
trees. Raw materials, spare parts, and machinery were unavailable
for manufacturing production. Both locally produced and imported
consumer goods and petroleum were scarce. There were huge budget
deficits and soaring inflation rates. Unemployment and underemployment
were high. There was a thriving black market for dollars and a very
high debt service ratio. Ghana stopped payment on its debt at the
height of the crisis. There was literally no direct foreign investment
and very limited foreign aid. Not just the economy, but the entire
state of affairs in Ghana had collapsed. The state no longer had
control and illegal activities freely flourished. Most of the causes
of the crisis were economic, including huge numbers of largely inefficient
SOEs, a government unable to collect taxes, poor infrastructure,
price controls, an over-valued currency, and few incentives for
agricultural cash crop production. The time was ripe for reform.
Structural Adjustment
According to Dr. Jonah, the objectives of
Ghana’s structural adjustment policies were as follows:
- A reduction in inflation through fiscal and monetary policies.
- A reduction in balance of payment deficits and management
of international debt.
- The resumption of production incentives and increased availability
of consumer goods.
- The restructuring of state-owned enterprises and banks.
- An increase in direct foreign investment into top priority
sectors of the economy.
- An improvement in infrastructure, including roads.
- The recovery of the social sector, especially education.
Price Reform
Among the most important of the reforms have
been the resumption of production incentives and the expansion of
exports resulting from liberalized prices. Dr. Jonah reported that
administered prices on eighty-three different goods were removed
during the first phase of reform, and prices of many agricultural
products are now determined in the free market. Also, Ghana’s currency
(the cedi) was devalued and became fully convertible in several
steps from 1983–1990. By the second phase of reform, Ghanaian citizens
were allowed to exchange currency legally, thereby destroying the
previously thriving black market.
Conspicuously absent from price reform is
Ghana’s cocoa prices. Cocoa prices continue to be administered,
and are well below market levels. Furthermore, fertilizer price
increases have been relatively larger than food price increases,
creating difficulties for farmers.
Privatization
Privatization has also been an important
aspect of Ghana’s structural reform. Dr. K.A. Tutu, an economist
at the University of Ghana, is an expert on Ghana’s privatization
process. According to Dr. Tutu, privatization was initiated during
the first phase of structural reforms, and was expanded to a large
number of SOEs during the second phase. Still, by the beginning
of the Public Enterprise Reform Project in 1988, Ghana had about
329 SOEs, employing over 240,000 people. To date, a little over
170 of these 329 enterprises have been privatized. Almost all of
the remaining SOEs are slated for privatization.
As a result of the privatization, employment
in Ghana has fallen by an average of 25 percent. Many of the SOEs
have been purchased by foreigners, and many Ghanaians feel that
given the stage of Ghana’s social and economic development, basic
enterprises (such as water, electricity, roads, railways, airports,
harbors, and telecommunications) should not be privatized.
Some of the privatized enterprises remain
extremely inefficient. For example, Ghana Airways is now privatized,
but has had a reputation for altering its schedule, making additional
stops, and ignoring scheduled stops. The faculty seminar participants
experienced a not uncommon four-hour delay going one way on Ghana
Airways, and a forty-hour delay going the other way!
Social Programs
Dr. Nana Apt is the Chair and Senior Lecturer
of the Department of Sociology at the University of Ghana. According
to Dr. Apt, Ghana’s social problems include ethnic and religious
conflicts, family breakdown (including alcoholism, drug abuse, and
poor mental and physical health), and economic deprivation (especially
among street and abandoned children, the homeless, and the aged).
She argues that women, who are "the movers and doers and hard-workers"
of society have poor mental health as a result of their lack of
control over the income derived from their labor. Dr. Apt is critical
of the World Bank, arguing that "Bank policies have not been doing
enough to reduce poverty in Ghana". She is also concerned that the
structural reforms that have created fees for hospitalization and
education erode the well being of the people.
Agriculture and the Environment
Dr. K.A. Senah of the Department of Sociology
at the University of Ghana is very knowledgeable about health and
education, as well as environmental issues and problems in agriculture.
He is concerned about the below-market prices for some of Ghana’s
agricultural products, including cocoa, and the fact that farmers
have limited access to markets and information, must pay exorbitant
interest rates to money lenders, and face chaos in land ownership
due to simultaneous multiple forms of ownership. He is also very
concerned about problems of deforestation and declining soil fertility,
which he believes result from over-grazing, slash and burn farming
techniques, commercial timber operations, and urban use of charcoal.
He argues that further timber processing, rather than simply export
of raw timber, would benefit Ghana and reduce the need for indiscriminant
deforestation.
In Addition
In addition to hearing many other important
lectures, seminar participants engaged in tours of the castles of
Cape Coast and Elmina, as well as other site visits. I am most grateful
to the many Ghanaian urban residents who allowed us into their homes
and the many residents of rural villages who allowed me to interview
them and learn so much more about their every day lives and lifestyles.
COMPARATIVE ANALYSIS
Against the backdrop of the seminar experiences,
we must now assess the impact of reform through a comparative analysis
of data for Chile, Vietnam, and Ghana. It is important to assess
both the economic and socioeconomic effects of structural reform,
since the economic results do not by themselves measure the final
impact of reform on the lives of people. Indeed, if people are not
the beneficiaries of structural reform and development, then the
purposes of these become irrelevant.
Macroeconomic Indicators
Table 1 compares the three countries in terms
of current macro-economic indicators. The first sets of data in
Table 1 simply reaffirm that GNP per capita is highest in Chile
and lowest in Vietnam and Ghana, and that Vietnam and Ghana are
heavily agricultural. 13 As shares of gross domestic
product (GDP), gross domestic investment and gross domestic saving
are relatively high in Chile and Vietnam, and relatively low in
Ghana. Exports as a share of GDP are very high in Vietnam, and relatively
low in the two other countries. While Vietnam’s debt is relatively
high, its debt service ratio (debt service relative to export earnings),
which is the best measure of debt burden, is very low. The debt
service ratios in Chile and Ghana are relatively high.
The data below can be summarized by noting
that Ghana tends to be the worse off of the three countries in terms
of investment, saving, and international trade and finance. Vietnam
seems to be doing better than its GNP per capita would suggest,
whereas Chile may be doing somewhat worse than expected.
Table 1. Comparative Macroeconomic Indicators,
1998*
Annual Percentage Values Chile Vietnam Ghana
GNP per capita,
|
$ 4,810,330,390
|
Agricultural
Output/GDP
|
8 26 37 %
|
Industrial Output/GDP
|
35 31 25 %
|
Gross Domestic Investment/GDP
|
27 29 23 %
|
Gross Domestic Saving/GDP
|
22 21 13 %
|
Exports of
Goods and Services/GDP
|
25 46 27 %
|
External Debt ($ billion),
1997
|
31.4 21.6 6.0 %
|
Debt Service Ratio,
1995
|
25.7 5.2 23.1 %
|
* Most recently available. If not 1998,
the year is shown separately.
Source: World Bank, World Development
Report (NY: Oxford University Press, selected issues)
Table 2 shows the effects of reform more
clearly by displaying the average annual growth rates of macroeconomic
variables over the two time periods 1980–1990 and 1990–1998. While
economic growth (growth in GDP) was solid in the earlier time period
for all three countries, it was particularly high since 1990 in
Chile and Vietnam. This is especially remarkable for Vietnam, given
the continued trade limitations with the U.S., the loss of Soviet
assistance since the end of the Cold War, and the Asian economic
crisis that has created havoc throughout the Asian economies. Industrial
growth in Vietnam is particularly note-worthy over the recent time
period. Export growth is now more rapid in Chile and Ghana, and
is remarkable in Vietnam. Finally, while all three countries exhibit
inflation rates in or near the double digits (see growth in the
GDP deflator), the Vietnam data inflation reductions are nothing
short of amazing.
To summarize, we can say that once again,
Vietnam appears to be performing particularly well in terms of the
macroeconomic variable growth rates, with Chile and Ghana merely
doing well.
Table 2. Comparative Average Annual Growth
Rates of Macroeconomic Indicators, 1980–1990 and 1990–1997
Average Annual Rate of Growth of:
1980-1990 1990-1998
Country |
GDP |
Agricultural Value Added |
Industry Value Added |
Exports |
GDP Deflator |
Chile |
4.2% 7.9 % |
5.9% 5.2% |
3.5% 6.8% |
6.9% 9.8% |
20.7% 9.4% |
Ghana |
3.0% 4.2% |
1.0% 2.8% |
3.3% 4.4% |
2.5% 10.2% |
42.1% 28.6% |
Vietnam |
4.6% 8.6% |
4.3% 5.1% |
n/a 13.3% |
n/a 27.7% |
210.8% 19.7% |
Source: World Bank, World Development
Report (NY: Oxford University Press, selected issues)
Socioeconomic Indicators
Table 3 displays socioeconomic indicators
for the three countries. We see from the data that Chile and Vietnam
have very high literacy rates, for women as well as men. This comes
as no surprise for Chile, given its high level of GNP per capita.
It is very unusual, however, for a country as poor as Vietnam to
have such high literacy rates, and especially such high literacy
rates for women. The very low literacy rates we see for Ghana are
much more typical for very low-income countries, particularly those
countries in sub-Saharan Africa. It is troubling to witness such
low literacy rates for Ghana, given the very high levels of education
reported in the past. Also, many people in Vietnam are concerned
that school fees and other results of structural reforms may reduce
literacy rates in years to come.
The life expectancy that we see in Chile
is probably lower than we would expect of a relatively high-income
country. The low life expectancy in Ghana is better than most sub-Saharan
African countries, and as with literacy rates, Vietnam has a relatively
high life expectancy. Once again, many Vietnamese people are concerned
that health care fees resulting from structural reforms may ultimately
harm the health of the nation, and result in lower life expectancies
and higher mortality rates.
Table 3. Comparative Socioeconomic Indicators,
most recent available year; 1980, 1990, and 1997; and percentage
change from 1980–1997.
Country |
Adult Literacy Rate (%) |
Adult Female Literacy Rate (%) |
Life Expectancy at Birth |
Chile |
95 |
95 |
75 |
Ghana |
67 |
57 |
73 |
Vietnam |
92 |
89 |
60 |
MRA *
1980 1997 1980–97 change
Country
|
Under-Five Mortality Rate (per 1,000 births)
|
Fertility Rate
|
Gini Coefficient **
|
Chile
|
35 13 -63%
|
2.8 2.4 -14%
|
(1994) 56.5
|
Ghana
|
157 102 -35%
|
6.5 4.9 -25%
|
(1997) 32.7
|
Vietnam
|
105 40 -62%
|
5.0 2.4 -52%
|
(1993) 35.7
|
* Most recent available year, 1996 or
1997.
** Based on income for Chile, expenditure for Vietnam and Ghana,
most recent available year.
Source: World Bank, or calculations based
on World Bank, World Development Report (NY: Oxford University
Press, selected issues)
In terms of child (under-five) mortality
rates, the numbers are relatively low for Chile, as one would expect,
and relatively high for Ghana, as one would also expect. Once again,
Vietnam has a much lower child mortality rate than is typical for
such low-income countries. Percentage-wise, the greatest declines
over 1980 to 1997 are in Chile and Vietnam.
Also, we see that while fertility rates are
still high in Ghana (in absolute as well as relative terms), the
Vietnamese fertility rates have declined by the largest percentage
among the three countries since 1980. The fertility rates in Vietnam
and Chile are both relatively low as of 1997.
Finally, the Gini coefficient is a measure
of income distribution, ranging from zero to 100. While not directly
comparable between countries, the Gini coefficient for Chile is
very high, indicating a very unequal income distribution. The Gini
coefficients for Vietnam and Ghana are relatively low indicating
a much more equal income distribution. (For comparison, the Gini
coefficient for the United States is 40.1.) The Gini coefficients
indicate one reason why living standards are lower than one would
expect in the relatively high-income country of Chile, while living
standards are higher than one would expect in the other two countries,
particularly Vietnam. At the same time, many people in Ghana and
Vietnam are concerned that the structural reforms may increase income
inequality in their countries, with the rural and the indigenous
people likely becoming worse off.
CONCLUSIONS
Based on the research and seminar experiences,
I’ve arrived at several conclusions. But first and foremost, I’ve
learned that it is one thing to read about structural reforms and
study the data, and it is quite another thing to engage in discussion
with the foremost experts as well as the everyday citizens of the
country under study. Whereas the former stimulates the mind of the
researcher, the sights and sounds of the people of a nation touch
the heart.
Other conclusions include the following:
- While economic reform can be successful in creating economic
growth, there is no guarantee that this growth improves the
well being of the masses of people. The Pinochet era in Chile
is a case in point.
- While economic reform can create an improvement in macroeconomic
indicators, other social policies and income distribution will
also play important roles. Vietnam is a good example of a very
poor country achieving high standards of living as a result
of social policies and relatively equal income distribution.
- Structural reforms that are desirable in one country may not
be desirable in another. For example, while Chile welcomes privatization
to a degree beyond most of the Western industrialized world,
Vietnam continues to retain a high degree of ownership by the
government.
- Insofar as structural reforms create hardship for people,
targeted government policy is necessary to alleviate this hardship.
For example, while correct (market) prices are necessary to
create proper incentives, targeted assistance must be provided
to low income farmers who pay high input prices and to low-income
consumers who cannot afford to buy staples at high market prices.
And, while privatization may improve efficiency, it will most
likely also result in layoffs of workers who need retraining
and interim support. Other vulnerable groups also rely on direct
assistance from the government.
- There is no doubt in my mind that the international faculty
seminars enhance the teaching, enrich the research, and contribute
to the life long learning of the university faculty participants.
In the case of the 1990s seminars in Chile, Vietnam, and Ghana,
this researcher was able to conduct a comparative study of the
structural reforms and their impact on people. This would not
have been possible otherwise.
ENDNOTES
- "Chile After Pinochet: The Challenges of Reestablishing Democracy",
Council on International Educational Exchange, 1992; "Contemporary
Vietnam: Recovery, Renewal, and Recognition", Council on International
Educational Exchange, 1996; and "Ghana and the Dynamics of Economic
Development", Council on International Educational Exchange,
1998.
- For a more detailed summary of debt history, see Brux, Jackie,
Professor of Economics, "International Indebtedness", in Frank
N. Magill (ed.), Magill’s Survey of Social Science: Economics (Pasadena:
Salem Press, October 1991).
- Unless otherwise noted, all statistics are from the World
Bank, World Development Report (New York: Oxford
University Press, 1999/2000 and earlier editions).
- Import substitution industrialization refers to an industrialization
strategy based on the production of consumer goods that had
formerly been imported, along with heavy trade restrictions
to protect the newly developing ‘infant industry’ from foreign
competition. Nationalization refers to the government taking
ownership of privately owned enterprises.
- Many of these political aspects of Chile’s background
were discussed by Dr. Arturo Valenzuela, Director, Center for
Latin American Studies, Georgetown University; in his opening
remarks for the Chile seminar.
- References for the Chile seminar, along with their positions
at the time of the seminar, include the following:
- Arriagada, Genaro; National Secretary, Christian Democratic
Party, Chile
- Insunza, Jaime; Central Committee Member, Communist Party,
Chile
- Larrarn, Hernan; Representative of the UDI party, Chile
- Mendez, Roberto; Director, Adimark, Chile
- Valenzuela, Dr. Arturo; Director, Center for Latin American
Studies, Georgetown University
- The historical context was discussed by History Professor
Phan Huy Le of the Hanoi National University, in his introductory
lecture entitled "On Vietnamese History" for the Vietnam seminar.
Le is also the Dean of the Faculty of Oriental Studies, Director
of the Center for Vietnamese and Intercultural Studies, and
president of the Vietnamese historians Association.
- This and some of the material on Vietnam that follows are
from the World Bank, World Development Report 1996: From
Plan to Market (NY: Oxford University Press, 1996).
- References for the Vietnam seminar, along with their
positions at the time of the seminar, include the following:
- Can, Dr. Le Thac, Chair of the National Research Program on
Environment, Director of the Center for Environment and Sustainable
Development, and Professor at the Hanoi National University,
Hanoi
- Cu, Dr. Vu Dinh, Professor, Hanoi National University; Member,
National Assembly Standing Committee; Chair, Committee for Science,
Technology, and Environment; Hanoi
- Hieu, Dr. Luu Trong, Director of International Programs and
Director of Research, University of Agriculture and Forestry,
Thu Duc, Ho Chi Minh City
- Can, Dr. Le Thac, Chair of the National Research program on
the Environment; and Dr. Vo Quy, Director of the Centre for
Natural Resource Management and Environmental Studies at the
University of Hanoi, "Vietnam: Environmental Issues and Possible
Solutions", Asian Journal of Environmental Management,
Vol. 2, No. 2, November 1994.
- Jackie Brux, "Economic Reform in Ghana", presented at the
Third World Studies Conference, Omaha, Nebraska, October 1998;
and Michael McCully, Professor of Economics, Highpoint University,
North Carolina, "A Structural Analysis of Food Security in Ghana",
Diss. (Ann Arbor, UMI, 1989).
- References for the Ghana seminar, along with their positions
at the time of the seminar, include the following:
- Apt, Dr. Nana, Chair and Senior Lecturer of Sociology, University
of Ghana, Legon
- Ayee, Dr. J.R.A., Chair and Senior Lecturer of Political Science,
University of Ghana, Legon
- Barfour, Dr. Osei, Department of Economics, University of
Ghana, Legon
- Jonah, Dr. Kwesi, Senior Lecturer of Political Science, University
of Ghana, Legon
- Senah, Dr. K.A., Department of Sociology, University of Ghana,
Legon
- Tutu, Dr. K.A., Lecturer of Economics, University of Ghana,
Legon
- While agricultural output as a share of GDP is only 26% in
Vietnam, this is still a relatively high value, since the labor
share in agricultural output tends to be much higher than the
agricultural output share in GDP in LDCs.
Current Research on Council's Faculty Seminars
A Decade of Experience: Data from the Council on International
Educational Exchange’s International Faculty Development Seminars
By Bethany S. Oberst, Ph.D.
Professor of Modern Languages
Executive Director, International Programs
James Madison University
Harrisonburg, VA 22801 USA
(Published in the Fall 1999 issue of the Journal of Studies in
International Education)
The news wasn’t surprising for those who have long
suspected that American faculty are not exceptionally international
or global. "Internationalism and Insularity," a recent article
in Change, documents disturbing facts. "…The American professoriate
is the least committed to internationalism. A little more than
half of the American respondents feel that connections with scholars
in other countries are very important." "American faculty were
. . . indifferent about further internationalizing the curriculum
with only 45 percent agreeing that it should be done." "The data
also show that 65 percent of American academics . . . did not
go abroad for study or research in the past three years."
The report is especially worrisome in light of the
current rhetoric of U.S. higher education, claiming in mission
statements and strategic planning documents that globalization
is a priority. But what sparked, in part, this article, was the
conclusion that the authors of "Internationalism and Insularity"
draw: "What is needed are programs, -- both governmentally and
privately funded -- that promote faculty . . . exchange." Those
of us who have advocated sending more faculty abroad in hopes
of promoting a more internationalized (or at least less parochial)
curriculum, will probably endorse the authors’ conclusion. However,
governmentally and privately funded programs promoting various
kinds of international faculty development have been around for
some time. What do we know about international faculty development?
Are American higher education policies and structures supportive
of such activities? Are the people we send prepared to take advantage
of such opportunities? Are the opportunities themselves structured
in such a way as to foster intellectual growth? Is there any evidence
that international faculty development initiatives have made an
impact on the curriculum?
Apart from opinion and advocacy pieces very little
has been written about international faculty development. In part
this may be due to the lack of commonality in what faculty actually
do when sent abroad, regardless of sponsorship. When international
faculty development is done, the tendency has been to personalize
the experience, building around the individual’s disciplinary
or professional expertise or the institutional needs of the sponsoring
unit. This may be good for the faculty, but does not yield information
upon which to build future efforts. Where can we go to begin to
understand the international faculty development process and determine
its effects, its context, and its impact?
One rare source of information is the files of the
Council on International Educational Exchange’s International
Faculty Development Seminars (IFDS). The IFDS program is perhaps
the only sustained effort in the United States to provide international
faculty development in a consistent format. Since 1990 Council
has offered a series of short-term (typically six to ten days)
international programs designed exclusively for college and university
faculty. Each seminar is organized around a theme such as "Conflict
Resolution: On the Threshold of Peace in Northern Ireland," "Sustaining
the Masses: Environmental Protection and Economic Development
in China," "Russia and the Republics: Union or Disunion?" Typically,
the IFDS staff select an educational institution or agency on
site to partner with it in presenting the seminar, which consists
of lectures, visits, discussions, debates and demonstrations.
Participants apply individually to the program, and are asked
to outline their learning objectives, but disciplinary expertise
in the theme is not required. The IFDS began a decade ago with
programs in England, Germany and Poland enrolling 82 faculty.
By the end of 1999, a total of 93 programs will have been run
in 25 countries, with 1560 participants from 613 colleges and
universities.
While program sites and themes have varied over the
years, the seminars share a common approach. Faculty are viewed
as a unique audience with special needs, both personal and intellectual.
The seminars emphasize the advantages of gaining experience abroad
over the need to develop an advanced learning agenda for narrow
specialists. They recognize that financing such activities is
a challenge and attempt to keep costs under control.
Given the need for more solid information about the
international faculty development process, it is fortunate that
from the start, IFDS leaders have attempted to obtain feedback
on the experience from seminar participants. Faculty are asked
to complete an evaluation form one the closing day of the seminar,
then often a post-seminar survey has been sent to each person
six months later.
The data collected from these evaluations and surveys
are both "dirty" and "useful." The data are dirty for many reasons:
questions changed over time as four directors provided leadership
to the program; response rates varied; questions were designed
largely for internal program improvement. In addition, there is
little consistency in question design, some sets of data were
missing from the files, in some cases there are more evaluation
forms filled out than enrollment records indicate, and the paper-and-pencil
forma