25 IMPLICATIONS OF NEW ECONOMIC POLICY For Indonesia, Korea, Malaysia, the Philippines and Thailand, debt service payments.... rose from 15 per cent of export earnings in 1973 to 20 per cent in 1983\28 So much for the World Bank and IMF 'success stories'! At any rate, the implications of recent economic measures for self-reliance are clear: the continuance of these policies would lead to the debt trap and to a serious threat to our sovereignty in the sphere of economic and political decision making. IV The political economy of recent economic policies is that of the promotion of a dependent capitalist path. It abandons even a formal commitment to self-reliance in the name of modernisation and of "taking India to the 21 st Century". It implicitly accepts the concept that unemployment and poverty will 'ultimately* disappear as growth occurs, based on exports and on spurts in domestic consumption by the elite of a new range of sophisticated modem luxuries. Yet, the logic of this political economy is itself contradictory. The class basis of the strategy pro-monopolist and pro-landlord—does not enable the state to raise the quantum of resources required to provide stimulus to industrial growth via public irivestment. Growth is then sought to be achieved through (a) raising resources from abroad by borrowing from official and commercial sources, and inviting foreign capital into the country and (b) by seeking to develop both external markets and an elite consumption-based internal market. This in turn necessitates, both in order to cater to these markets and under pressure from foreign financiers, liberalisation of imports and technology. In turn, this hurts domestic industry and employment, and accentuates balance of payments difficulties. The latter are further worsened by the protectionism of the Western economies and the stranglehold oftransnationals over the export markets of developing countries. The new policies thus constitute a no-win strategy even in terms of achieving the objective of growth, while at the same time they accentuate the problems of poverty, unemployment, inflation and dependence. The need for an alternative strategy based on the productive and consuming power of the vast sections of rural and urban working people—a pre-requisite for which is the breaking up of private monopoly in land and industry-should be obvious. Notes 1. 1 For a detailed critique, see S. Guhan, *Union Budget 1985-86\ Bulletin of the Madras Institute of Development Studies. May-June 1985, pp 311-328. 2. S. Guhan op. cit, 3. Ibid. 4. Economic Survey 1984-85, quoted in Guhan op. cit. 5. Economic Times^ 18 February, 1985. 6. Economic Times 5 July, 1985; The Herald Review, March 31st-April 16th, 1985. 7. Economic Times, August 4, 1985.