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Re: Pl. vet Arvind's 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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"Today a large chunk of government expenditure is in unproductive ways.  
Capitalist theories are applied to a socialist system. What else
explains the government ordering 10000 cars and jeeps in the name of
'Keynesian Economics'....? It is precisely this kind of wasteful
expenditure that must be avoided and IMF says so..."

I don't remember whether IMF always has such wise and impartial counsel.
But, even if that is the case, I wouldn't trust anyone other then the
Indian Parliament to make judgment on case to case basis. Your arguments
sound somewhat simplistic, and when facts from all sides are brought in
front of not just the government (which is thankfully, a coalition
regime most of the times in India, meaning a political party is less
likely to get away with serving some specific business interests) but
the whole parliament, where the fourth estate, the news media is certain
to bring the common man into the debate, and such ridiculous programs as
pointed out here, are less likely to get a nod from the parliament even
if IMF, for some strange reasons ,wishes to extend loans on such
allegedly strange programs. 

"IMF would not oppose any investment that brings returns. We should not
blindly take an anti IMF stance..."

The history of IMF is filled with examples where you will find that it
is not just the merit of a specific program that comes into play when
this organization considers a specific program for approval. This is not
to say that an anti- or pro-IMF stand is justified. In fact, the only
thing justified for India is a pro-India stand. It turns into a pro or
anti-IMF stand only because of the fact that local politics gets
involved in it, and political party in power almost always finds itself
at a disadvantaged position. The solution is de-politicization of IMF
involvement, by making it mandatory for the whole Parliament to own the
task of approving or rejecting an IMF funded program so that the
accountability can be shared by all political outfits, in fact the whole
nation rather then people taking pro or anti IMF stands on anything.

"The suggestions they made for the two countries during crisis were
carried out for some time. In one country it failed. In the other, it
resulted in riots. The suggestions
they make have also been inconsistent. ... they suggested lowering the
interest rates in USA (to stimulate the industry!)."

I don't know whether the IMF suggested the USA to lower interest rates,
or it was just the local economy, and the Federal Reserve Board, which
decided in the best interest of the nation. It is perfectly all right
for IMF to suggest different solutions for different countries. However,
the examples of Malaysia or other SE nations listed here should give us
some idea about the fact that sitting several thousands of miles away,
often this organization fails to make the best judgment about effective
solutions about far away countries and their rather closed economies.
That is where, I recommend limiting their powers to just proposition of
conditions, while leaving the decision to bite the bullet and accept the
conditions along with generous help or decline it altogether, in the
hands of democratically elected parliament of India. Their decisions may
often sound socialistic in nature, which may not look very attractive to
the west or the so called modern economists, but nonetheless, that is
what has to come to be the best choice of the majority of the people of
India, all of whom may not yet be prepared to let go of certain welfare
programs of the government and survive. Remember the much criticized
economic philosophy of Professor Amartya Sen?


"What I would say is to take all their suggestions, look at them
objectively and implement what is good. You will find that most of
india's objections are to the opening up of the industry to 'foreign
powers' and not to specific details like interest rates or fiscal
deficit...."

Who will you entrust making such an objective decision? Especially when
this issue is directly linked with national debt? I cannot think of any
institution other then our Lok Sabha suitable to take on this
responsibility. I certainly wouldn't want the IMF to make the decision
for us and impose it on our country. That certainly does not fit well
with my idea of basic freedom and liberty of the citizen of India.


Umesh


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