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Re: IMF Conditionality




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Postings not related to the writing of the Manifesto or policy chapters
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Professor Jagadiswara Rao is wholly mistaken.   The IMF has nothing to do
with project-financing whatsoever but with balance of payments and
exchange-rate problems.  He  may be confusing the World Bank with the IMF.

India is one of the 12 original members of the Fund, with, if I recall
rightly, the USA, UK,  Republic of China, Canada,  Australia and New Zealand
and others I forget at the moment.

Subroto Roy

-----Original Message-----
From: Prof. R. Jagadiswara Rao <rvp_org80@hotmail.com>

>Please find below my answers to the questions posed by Mr. Thornhill on
>the above subject.
>
>Reasons for India's dependence on IMF:
>Soon after India became independent in 1947, it followed the model of
>Soviet Union for its development. All foreign companies and many big
>Indian companies were nationalized. The government took up the entire
>responsibility of developing infrastructures required for economic and
>social development. Realizing the powers enjoyed by the politicians and
>the money commanded by the contractors, many rich and influential people
>became politician contractors. The politicians who earlier fought for
>independence began to fight for infrastructures to be taken up in their
>regions in a big way. In order to get sanction of their pet projects at
>any cost; they managed the engineers' in-charge of the investigation to
>manipulate the project reports for getting a higher benefit-cost (BC)
>ratio. They knew that once a project gets started, no one bothers about
>the BC ratio. The erring engineers were favored by making them in-charge
>of the construction work of the projects cleared. The politician
>contractors managed not only to grab the project works but also to
>execute them with poor quality. Because of starting a large number of
>projects without adequate resources, each project took an inordinately
>long time for completion and delivering the goods. Once a project is
>completed, no assessment is made on the benefits accrued by the project.

....


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