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Re: Would anyone care to reply?




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Postings not related to the writing of the Manifesto or policy chapters
are likely to be summarily rejected. Thanks for your understanding. IPI
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"1. IMF Conditionality

Our task is to decide whether the use of conditionality is the most 
effective method of solving economic problems. If the idea of 
conditionality is really efficient? .."

Yes and no. The very idea of IMF not imposing conditionality on a
country it wishes to assist is impractical. There will, and should,
always be conditionalities explicitly documented behind every loan or
donation that is extended to a country. In the absence of explicit
conditions, the donee or the receiving country will always be subjected
to undefined, and random political pressures by the donor country, often
serving as advocates of multinational corporations (for example the
western Insurance Industry attempting to make inroads in Indian Market
through a political route rather then letting the Indian government make
the right decision that is considered best for its people). Such fuzzy
situation has the potential of hurting sovereignty of the nation and its
foreign policy actions, which should always be guided only by the
supreme national interest.

When it comes to demanding adherence to international banking norms or
transparency in the financial accounting procedures, such as imposed by
the IMF while extending huge sumes of the loans to some South East Asian
nations hit by last years recession, it certainly should not only have
the right, but a duty to enforce such conditions in the long term
interest of the local economy. 

However, it is a delicate balancing act. Every case should require
individual scrutiny. Every loan that is approved by IMF, should have all
of its conditionalities completely disclosed, and only after India's
parliament approves of those conditionalities, should the loan or
donation be extended. This is very important to allow a sovereign
government and People's representatives to voluntarily accept or decline
the conditionalities so that a situation could be avoided where IMF is
so often seen as overstepping its rights at the pretax of western
industrial or political interests.

"How much power should the IMF have over India? 

No, IMF or any other international institution should not and would not
have ANY POWER or RIGHTS over India. It may sound strange, but the basic
principle of national sovereignty bestows all the rights about policy
making, national security, and decisions that effect the nation and its
people in any significant way, directly in the hands of its citizens in
a democracy that is India. People entrust their regularly elected
governments to execute these rights as long as such a government enjoys
people's confidence. No other entity, neither the IMF nor any other
branch of the United Nations should have any specific Rights over the
elected government of India. The answer is emphatic NO!

"Will limiting the power of IMF conditionality also limit its ability to
aid India better through their economic troubles...?"

Limiting the power of IMF is very relative. Not giving power over a
democratically elected government does not necessarily limit the powers
of the IMF. IMF could certainly  exercise its power of approving or
declining certain loans to India or any other country if, say Indian
Government and its Parliament (Loke Sabha to be specific) chooses to
reject the conditionalities proposed by the IMF. Since India happens to
be a democracy, and its parliament has,all the time, democratically
elected representatives of the people of India, they and they only
should be the ultimate guardians of the welfare of Indian people, and if
they choose not to accept an IMF help to fund any economic program, then
IMF should not have any further say on the matter.

"How does India feel about the current measures of conditionality
applied by the IMF?"

The simple answer is no, India (meaning majority of its citizens) do not
like IMF conditionalities. There are a few reasons that I can list. 

One, perhaps they are not fully informed about it, and local political
reality does not give any incentive to the politicians to educate the
public on this. 

Secondly, Indian people consider themselves to be a free nation in a
genuine sense, and they do not like an institution dominated by
westerners (they still identify most of the west with colonial
British/Whites) imposing restrictions on their democratically elected
governments.

Economic programs that are often funded by the IMF are not properly
soled to the common people. They often come to know about IMF only when
local politics starts playing a dangerous partisan game where the party
in power is victimized for "buckling under the pressure of IMF" and or
blamed for "compromising on policies of national and public interest".

Hope this helps.

Umesh
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