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Re: Rao plus Roy




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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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"Prof. R. Jagadiswara Rao" wrote:

> . . . .. I want these mistakes to be corrected, so that India could get some
> return out of the loan obtained and be able to pay back the loan with
> interest. My only concern is that India should not get into a debt trap like
> some Souteast Asian countries.
>
> As I have no interest to make any "vigourous and precise critical
> discussion of the working of the international institutions and their
> relationships with India and other developing countries", such a
> discussion is "sorely lacking" in my article. If that is so "vitally
> necessary", why not Dr. Roy attempt it?
>

I believe that to accomplish the objective outlined in the first paragraph
[avoiding a debt trap], we must understand the workings and motivations of the
international lending institutions based on their past record.

My understanding of these institutions is that they are largely funded and
controlled by a minority of rich nations and, not surprisingly, are geared to
serve the interests of the controlling powers of those countries. Thus if a
financial crisis, such as hyperinflation, occurs in some country, the actions
of the institutions are geared to protect the investments of private capital
in that country at the expense of the majority population of the country, and
to some extent, at the expense of the taxpayers of the rich countries thereby
becoming a device for transferring money from poor people in the affected
country, and from the poor people in the funding countries to the rich people
of the funding countries- the shareholders and officers of the banks and other
companies that invested in the affected country.

We can discuss specific cases, but I hold that this is not particularly
complicated or mysterious to understand the measures of "fiscal discipline"
that they impose on their debtors such as currency devaluations [cut the price
of your goods] and export promotion [engage in activity which profits the
interests that control the institutions].

-Charu

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An aside to Jagadiswara Rao: though this may not have been your intent, the
tone of the second paragraph comes across as addressing personalities rather
than issues. I believe it would serve the debate much better if you  briefly
explain why you think the "working of the international institutions and their
relationships with India and other developing countries" is irrelevant to
India's international borrowing rather than implying that Subroto Roy is
simply wrong.

If I misunderstood your intent, I apologise in advance and withdraw this
remark.

-Charu


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