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http://www.cato.org/pubs/pas/pa-170.html - Foriegn Aid and India

Please help make the Manifesto better, or accept it, and propagate it!


Hi all,

This was the stupid vision of Mr. Nehru (Development of Indian economy
is an mathematical problem to be solved - such an arrogant attitude can
only have disastrous consequences): Here is an excerpt from the article
given in detail below:

The underlying vision of Nehru and his associates that
has molded India's economic policy since independence is
further illustrated in his comments to a prominent Indian
journalist in 1960:

We have accepted the socialist and cooperative
approach . . . the planned and scientific approach
to economic development in preference to the indi-
vidual enterprise of the old laissez faire school.
. . . Planning and development have become a sort
of mathematical problem which may be worked out
scientifically. . . . It is extraordinary how both
Soviet and American experts agree on this. If a
Russian planner comes here, studies our projects
and advises us, it is really extraordinary how his
conclusions are in agreement with those of, say,
an American expert. . . . The moment the scientist
or technologist comes to the scene, be he Russian
or American, the conclusions are the same for the
simple reason that planning and development today
are almost a matter of mathematics.(8)


by Shyam J. Kamath
Shyam J. Kamath is an associate professor of economics in the
School of Business and Economics, California State University at

Executive Summary

With a debate now raging over whether further foreign
aid programs financed by U.S. taxpayers are justified in the
post-Cold War era, a review of the development experience of
the recipient of the largest amount of foreign aid is in-
structive. India has received more foreign aid than any
other developing nation since the end of World War II--esti-
mated at almost $55 billion since the beginning of its First
Five-Year Plan in 1951.(1) It has long been an article of
faith among development economists and policymakers that
foreign aid is a necessary and central component of economic
development, yet the record of Indian economic development
since 1947 belies that view.

India has had one of the lowest rates of growth of all
developing countries and remains one of the poorest countries
in the world after almost 45 years of aid-financed, centrally
planned development. Foreign aid has directly financed and
sustained India's centralized planning and control framework
and thereby financed the growth of one of the noncommunist
world's largest and most inefficient public sectors. In
1988-89, 101 of the country's 222 largest public-sector com-
panies recorded losses and contributed to a federal deficit
five times as large, in relative terms, as the U.S. budget

Read rest of the article at http://www.cato.org/pubs/pas/pa-170.html

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