Dear Editor,
This is regarding the article “Role of the World Bank and IMF in India”. It is an excellent article covering over 80 years of engagement between the Indian bourgeoisie and international financial institutions like the WB and IMF.
I want to add a few points in this regard.
- Study of the discussions and minutes in the founding Bretton Woods conference of WB and IMF in 1944-45 shows that though only three representatives of Indian bourgeoisie participated in that conference as part of the British delegation they played a very active role disproportionate to their colonial status. They not only lobbied hard unsuccessfully to get an Indian appointed as MD of IMF but also played a significant role in introducing “poverty alleviation” as one of the goals of WB (IBRD). The Indian bourgeoisie benefitted from this by borrowing from WB frequently for many projects by projecting the poverty in India and WB too found it useful to cover its global imperialist aims as pro poor.
- The Tata-Birla Plan (Bombay Plan 1945) relied a lot in its futuristic calculations on the 1 Billion pound sterling of Indian government’s money lying in British Banks at the end of WW II, for post-independence plan to import machinery from the west paying in pound sterling for rapid industrialisation. However when the British essentially scuttled paying back these funds in any significant way the bourgeoisie in the 1950s onwards relied on the government borrowing from foreign sources including WB and channeling those funds through the newly created IFCI, ICICI and IDBI, the so called “Development Financial Institutions” to fund the large industrial projects in the public and private sector as well as in the infrastructure. They found the sovereign borrowing of finance capital would suit their purposes much better than they going to foreign banks for funding.
- The situations has reversed in recent years. Thus in last two decades the government borrowing from WB etc. has become marginal while Indian big capitalists’ private commercial borrowing from foreign banks and institutions directly, far greater. However, the article rightly points out that the ideological influence of WB and IMF in the top echelons of the Indian bureaucracy in the finance ministry, RBI and various other ministries has grown enormously over these years directly by the deputations of Indian bureaucrats to these institutions as well as various reports of WB and IMF on the Indian economy being discussed and debated seriously in these circles as sources of new ideas.
Regards
S Kulkarni
Dharwad