The Economic and Political Consequences of The Fund-Bank Strategy
TO DESIGNATE the New Economic Strategy of the present government and, indeed its predecessor, as the Fund-Bank Strategy is certainly not a misnomer. This is not to suggest ^hat the New Economic Strategy has either been thrust down upon an unwilling Indian government or that it is entirely the creation of the Fund-Bank advisors. The policy of economic liberalisation conducive to the interests of Indian and foreign private enterprise has been gradually unfolding over the last decade or so. It is only in the recent past that there have been dramatic gestures symbolising this gradual shift. This new economic strategy may be called the Fund-Bank strategy not only because it conforms to the broad policy package of the Fund and the Bank but also because in the more recent past it has been implemented by the Fund-Bank whizz kids saddled into the seats of power in the Government of India^The new band of economic advisors have been schooled and bred in the tradition of Fund-Bank ideology and bring with them the weight of multilateral wisdom!
To expect that the economic and political implications of this new strategy would be vastly different from those of other Third World countries wh^ch have been administered this medicine in the past is simply wishful thinking. On the other hand this is not to suggest that India will necessarily go die way of so many "banana republics, that live under tinpot dictators. However, it is surely time for this nation to take stock of the recent trends and see where they mav lead us.
The Fund and Bank have emerged as two major instruments of neo-colonial domination in the Third World in the era of post-war decolonisation. Countries that have been ensnared into their willing arms and have been irretrievably drawn into a debt trap stand testimony to the nee-colonial character of the Fund-Bank strategy for economic development. This is not to deny that debtor nations have made heroic attempts at resisting their subjugation to Fund-Bank domination. However, such resistane has not always been forthcoming from small Third World nations incapable of defending their economic sovereignty, or, from such governments which have become willing agents of imperialism surrendering the freedom of their people for the support and succour which the leader of the imperialist camp, the United States of America, is willing to offer to the ruling elite of these nations
9 Centre for Economic Studies ft Planning, Jawaharlal Nehru University, New Delhi