The Tribune - Spectrum

Sunday, May 14, 2000

Lethal handshake?

APROPOS of Kuldip Dhiman’s write-up "Lethal handshake"? (April 23), a look at the process of economic reforms initiated by the previous governments gives an impression that the liberalisation package was home-grown. It has become clear that it was based on the Washington consensus decided on by the World Bank and the International Monetary Fund. The policy package was designed to promote the interests of the super powers and the primary objective of this package could definitely not be the development of the Third World countries.

A country’s development is a national affair and only its own policy can take into account the local economic and social conditions, its objectives and realities and capabilities of its people.

Experience of the Third World countries which adopted the Washington consensus in their bid to achieve rapid economic growth shows that they were plunged into innumerable social and economic crises. India must learn from their experience.

Foreign investments are no doubt necessary for developing nations when there is a direct link between capital and technology. But unbridled foreign investment cannot be in the best interests of the nation. In this regard, the concept of swadeshi assumes greater significance. Swadeshi does not necessarily mean that all that is produced in India, with or without foreign collaboration, automatically becomes indigenous. The concept has wider implications.

  In a society of scare resources austerity become vital. Production of consumer goods should meet the basic needs of the people, depend more on indigenous resources and utilise local manpower.

Large Indian and foreign controlled corporations have set up massive manufacturing capacities against all national norms. The MNCs, through their capital intensive technologies, have adversely affected the small and medium industries of India which cannot compete with the marketing skills of these giants.

Thus the road to economic success in future will not be unlimited globalisation, but, controlled, guided, calibrated globalisation for acquiring global economic strength. Japan became an economic power through controlled globalisation. It means that India has to devise its own strategy. This is what the idea of swadeshi is all about. It means an Indian agenda to which the global agenda can only be a supplement, and not the other way round.



The World Bank — IMF due is not what it is seems to be. Acting managing director of the IMF, Stanley Fisher, recently said at a press conference in Washington, "Globalisation is the only way we are going to raise people around the world to the same level as people in industrialised countries". One would wish it were so, but it is not.

At the South summit in Havana, the Cuban President, Fidel Castro, said in unmistakable terms that world trade in the hands of rich countries was an instrument of domination which would "perpetuate and sharpen inequalities". The Foreign Minister of Sierra Leone said at the annual session of the UN General Assembly in September last, "globalisation could not be effected as a one-way street, where all the vehicles travel north, leaving only exhaust fumes in the south".

The recent protest by thousands of demonstrators in Washington, the venue of WB — IMF meeting, symbolised the growing disenchantment with globalisation that many in the Third World believe will only perpetuate inequality in poor countries. The World Bank and the International Monetary fund, according to the organisers of the protest march, are the chief instruments used by the political and corporate elite to create an unjust global economic order. Even the UN Secretary General Kofi Annan points out that "the benefits of globalisation remain highly concentrated among a small number of countries, and are spread unevenly within those countries".