Volume 4, No. 4-5, April-May 2003

The present phase of imperialist globalization (in short globalization) in our country arose as far back in the year 1981. The Government of India (GOI) had then extracted a loan of 5 billion Special Drawing Rights — SDR, under compulsion of an acute foreign exchange crisis, from the International Monetary Fund (IMF). It was not only the largest loan approved by the IMF in its thirty-six-year history, but also raised the country’s external indebtedness at one go from around Rs. 15000/- crores to around Rs. 21000 crores. The loan had been negotiated as per stipulations made in the statement of eonomic policies submitted by then Finance Minister of the GOI, on the basis of which the IMF staff prepared a memorandum, specifying the conditionalities of this loan.

The then Left Front Government of West Bengal led by the CPI(M) criticised the GOI for taking the IMF loan and exposed the consequences of the IMF conditionalities on our country’s economy and its "sovereignty." To cite a few of its important criticisms:

(i) In a foreword to a publication entitled ‘the IMF loan-facts and issues’ by the Government of West Bengal (WB) v, 1981, Ashoke Mitra, the then state finance Minister boasted, "The Govt. of WB is strongly of the view that this right needs to be exercised in the interests of preserving the nation’s economic sovereignty". In the same foreword, Ashoke Mitra again and again emphased on such issues of sovereignty as, "the nation’s prerogatives to formulate economic policies and presecriptions to cure the economic problems is going to be seriously curtailed on account of the acceptance of the conditions laid down by the fund." Further, "over the period during which the loan is to be disbursed, India’s monetary and fiscal policies — including the size of the internal money supply, the structure of taxation and the quantum of budgeted deficits — would be formulated not in New Delhi, but in Washington," etc. etc.

(ii) The aforesaid foreword further pointed out that "a policy of indiscriminate import liberalisation is sought to be cured by the additional export subsidy arranged for, again as per edicts of the fund, by containing food subsidy, and public distribution system. Prices of essential foodgrains then rise, people would suffer; inflation, however, would not be tackled and, therefore, exports are unlikely to increase …. a suggestion into a regime of perpetual inflation and perpetual balance of payment difficulties."

(iii) A renowned economist Deepak Nayeer in the said Govt. of WB publication explains that a loan of this magnitude is unnecessary, conditions attached are unacceptable and there are better options. In case of a bad harvest necessary imports of food, unexpected increase of the world prices of oil or unforessen defence expenditure, the Government almost would have no options; it would not be able to restrict imports or borrow from the international capital markets, nor would it be able to resort to deficit financing as a last resort, unless there is prior clearance from the IMF. In the ultimate analysis, a balance of payment inflation can be controlled only if there is sustained increase of domestic production of essential commodities which offer some protection to the poor — thus the said economist has summarised the pitfalls of Fund-Bank conditionality attached loans and the possible way-out.

(iv) Yet another renounced economist Prabhat Patnaik, in an article published in the said booklet, entitled ‘Implications of the borrowing from the IMF’ termed the loan as a programme for a severe curtailment in the living standard of the working people. Import liberalization meant the elimination of the domestic producers in a number of industries and consequently unemployment. A credit squeeze does not affect all borrowers evenly. It is the small and medium units which feel the pinch during credit-squeezes and many of them simply close down, retrenching the workers. Apart from the Bank’s refusal to accommodate them, such units also face financial crisis for another reason — i.e. large units in the period of credit-stringeney extract forced loans from small business Units as well as from the peasant producers by delaying payments for suppliers.

(v) Prabhat Patnaik succintly argued in favour of control over imports, prices and distributions, to which opposition is voiced at two different levels. Those who argue against bureaucratism, inefficiency and waste (under the government control) do not see far greater ‘inefficiency’; and ‘recession’ in a liberal regime with its engineered recession and unemployment, destructive productive capacity, suppression of domestic technology and skills. Prabhat Patnaik concludes that a good part of waste and inefficiency of a regime of control arises from a lack of synchronisation of controls, because the controls devised are not internally consistent.

(vi) In a booklet, ‘Economic Reform and the States’ — Amalesh Banerjee, Feb. 1995, it is pointed out that the ‘national renewal fund is fading out — the biggest lacuna of the reform strategy is the slowing down of the savings and investments when it is most urgent for resurgent growth… the only hope of resurgence is the supply side response from agriculture and export, both of which are uncertain, the former due to erratic nature and the second due to trade restrictions under the Dunkel drafts, formalised in GATT and Uruguay round".

Now let us consider as to whether the strident criticism of the intellectuals loyal to the CPI (M) led Left Front as indicated above are matched by their deeds as they assumed power on and from 1977 in a few states, mainly in West Bengal continuously for the last twenty five years. It may be pointed out that the leadership of the CPI(M) has learnt one or two object lessons from their venture of ministry-making in a constituent state under the ‘federal-set up’ of a semi-feudal and semi-colonial country like India. A display of gherao and forcible land occupation promoted by the party, as a parallel to Naxalbari upsurge, during short rule in 1967 within Ajoy Mukherjee led coalition ministry had made the central government, big industrialist-cum landlords so much shaky that in 1969 they ganged up together to bring the coalition rule down, and replace it by Sidhartha Sankar Ray, the stooge of the Late Indira Gandhi-led authoritarian Central Government. Hence in 1977 when the Left Front Government under the leadership of Jyoti Basu came at the helm of the state in 1977, they became wiser by the past experiences. They immediately settled down to address to fulfills their modest agenda of ‘relief to the people’ within the ‘limitations’ of a bourgeoise-landlord Central Government. In this context, it would be relevant to note what, Asim Dasgupta said in a paper entitled, ‘An alternative to the IMF Loan’ suggested a pro-poor program replacing imports with indegenous production. Such an alternative programme requiring as it does a reordering of the distribution of ownership and control over assets in agriculture, industry and trade in the social interest of economic growth and avoidance of the balance of payment is, of course not possible given the class character of the rural polity, though there may be, for purposes of public relations, some rhetorical, stray references to the concern of the poor (even the IMF agreement has one paragraph on it!).

An unexceptionable proposition indeed! It would not be a long story about how the L.F. Government of WB turned 1800 volte face in practice. From the very moment Asim Dasgupta had inked these lines, deviations from their 1997 declaration of self-reliant industrialization began to manifest in regard to selected privatization of state electricity, avoidance of confrontation with the landlords/rich peasants combine and consequent dilution of operation barga, and distribution of vested lands, slackness in the collection levy rice mainly from the rice-mill owners resulting in failure to supply foodgrains even to BPL card holders through P.D.S. etc. These developed into a full-blown industrial policies of the Left Front Govt. placed by Jyoti Basu, the then CM during Nov-Dec. 1994. Basu in the said statement, inter alia, pointed out that "The policies of the Central Government are being emplemented throughout the country. None of the constituent states may stay outside the parameter of this policies. Pursuant to the Union Govt’s new economic policy regarding a stop to public sector investment, our industrialists have become totally dependent on investment by the big foreign and native industrialists. It would not be appropriate to oppose these investments in the present scenario to create some opportunities for employment." [emphasis added] The CPI(M) leadership is not foolish enough not to realise that the situation would come to such a pass at least as for back as in the year 1977 as Asim Dashgupta was referring to the class character of the country polity, based on abject and organic dependence on imperialism. No wonder that Jyoti Basu, a steadfast adherent to the path of reformism, would be the first to raise within his party about changing the party program in the light of latest developments and try for government formation at the centre by parliamentary means! There must be a limit to the deceit!

In short, what constitutes the alleged difference in the economic policies propounded both by the Central and WB LF Govts. are : (i) the central policies injure domestic productions, by one-sided stress on export-oriented industries and abjure radical land reforms — in fact one-sided emphasis on exports is a bid to destroy self-reliance; (ii) the centre has already abdicated the task of building new PSUs, even giving budgetary support to the existing ones; in reality, the centre’s industrial policies are moving apace towards de-industrialisation, but the state’s industrial policies, while constrained to accept some features of globalization like freight equalization and direct negotiation between the world bodies and a constituent state, still claimed to have a mass based development strategy with a larger flow of the process of production and transmission of benefits of development to the extensive population. The 1999 industrial policies of the L.F. Govt. contain such palliatives to the private corporate houses and the TNCs. They include : (a) advice to the workers not to resort to militant struggle and gherao, and harmorious labour-management relations, (b) removal of all administrative restrictions over access to the fund-bank grant/aid/concessions as well as direct foreign investment (FDI), and opening a single window linkage by merging the concerned ministries, (c) formation of a number of export processing zones (EPZ) permitting domestic and foreign enterprises plenty of concessions, tax-holidays as well as liberal subsidies in the form of foregoing sales tax, royality etc for a number of years from the cash-starved state exchequers. Going by these above policies, it would not take long for the IMF-World Bank-WTO combine and the private corporate houses of the comprador big bourgesise to have an octopus-like grip over the economy of West Bengal. A few illustrations from the industrial and agrarian conditions of the state would establish this.

Recently a Bengali expatriate, one of the participants of the Pravasi Bharatiya meet in New Delhi on Jan’03, told the state’s labour Minister Nirupam Sen that labour militancy is a damper for NRI investment in the state. While in the rest of the country, the total investment is 60%, in W.B. it is miniscule, it is pointed out. A newspaper report on Jan 8, 03 reveals that the L.F. Government is asking the companies to recruit skilled workers from outside, if not found locally. It is to be noted further that service industries like IT, hospitals, etc heavily dependent on the foreign investment are growing slowly at the cost of growth of heavy and crore, as well as manufacturing sectors. But inspite of a hype about information technology, it draws only Rs 34.17 crores in investment for 8 units only.

About two years back, a report published in the statesman avidly illustrate miserable conditions of the country’s only industrial estate at Behala, inaugurated in the year 1986 by Jyoti Basu with much fanfare has now 35 out of a total of 140 units closed; and out of the remaining 105 units, 50 are in bad shape because of the Government’s apathy to provide these with even basic infrastructure like water supply and sewage. "This estate has proved beyond doubt that the State Government is not interested to improve industries. No industrialist will come to this place once he comes here", concluded the report.

On agrarian sector, Buddhadev Bhattachariya, the present C.M. of the state, has now been working overtime to woo foreign investment in the state, the ground plan of which has long since been under preparation by a U.S. consultancy firm Mackinsey. The consultancy firm, in short, has suggested a system of contract farming between the farmers and the foreign firms where the produce would be shared jointly. The farmers would supposedly receive remunerative prices and the foreign firm would get a fair amount of the returns for the supply of capital and marketing the entire produce through its outlets. A legimate apprehension has been voiced by the critics within and outside the Left Front that contract farming would result in the land being passed from the farmers to large agro-producing enterprises like Kargil and Pepsi Co. Our experiences also confirm our fears in regard to vast tracts of the Barga land in North Bengal being passed on to the rich garden owners by the Barga-recipient farmers at throwaway prices.

A ‘beauty’ in the concessional loans of about 140 crores pound sterling concluded by the state government and the U.K. Industrial Deptt. Fund (DIDF) is in its ostensible declaration for revamping the state PSUs and purposes of poverty reduction. A clue to the stipulations of the loan has been provided by Mrs Short, the U.K. Labour secretary, in Calcutta recently where she said the money allotted may be used for regrouping of some loss-making PSUs and pay off the retrenched employees so that they may find alternative employment. She also suggested that the sick PSUs incurring wasteful expenditure be stopped so as to make way for some amount of poverty reduction. (Source - The Statesman, December 5, 02). Incidentally, it may be pointed out that poverty reduction is an attractive commodity pushed by the Fund-Bank-WTO in the global market and it has a ready taker in the F.M. of this state, Ashim Dashgupta, who once had opposed this. The IMF, in fact, is touting this poverty reduction, but actually the sums earmarked for this is a poor compensation against the loot of the country’s population in the name of structural adjustment. We would conclude this section with a report published in ‘The Statesman’ dated Aug. 16, 2002. The report states that "the Govt. (of West Bengal) signs MOU with the Indian representation of Bill Gate Microsoft Corporation for e-governance. The Microsoft technology partner would implement e-governance in those Key project areas of the state as (i) improving areas like tax administration, treasures, finance and the land records (ii) widening the pool of human resources increasing IT in schools upwards, (iii) as a bridge between Govt. and the people through e-conference etc. (iv) setting up IT training institutes in undergraduate courses.

To sum up, any exercise in ‘poverty reduction’ ‘Sustainable development’, or even ‘e-governance’ remain valid and specific to the upliftment of common people, if and only if, proceeded by forcible overthrow of semi-feudal and semi-colonial exploitation; distribution of land to the peasants without compensation to the expriated landlords; release of internal resources for development through vast potential of savings accruing as a result of increase in purchasing power of the common masses; progressive direct taxation on the basis of accumulated wealth among the tax-payers in the urban and rural areas, and the real, not token empowerment of the dispossesed millions belonging to the workers, peasants, small and middle bourgeoise, women, dalits, nationality and religious minorities of the country. It is unbecoming of a "left"-led state government to declare those pious intentions from the highest palpit when it is leading a hand-to-mouth existence abdicating the task of colleting resources form the state, throwing red-carpet treatment to the TNCs and foreign and domestic giants without even feeding the people of BPL category and, above all, it is spending only ten percent of the state’s development expenditure whose benefits are mainly misappropriated by the upper layers of the society. More cruel is the L.F. Government’s mad drive for eviction of the ghupree people and taxing essential social services such as water, electricity, education and health falling in line with Fund-Bank prescriptions of Development.

To conclude, our readers may notice from the aforesaid facts and analysis that, as globalistion has been enforced by GOI in the nineties of the last century, the parliamentary left political parties, specially CPI(M) has been making virulent but forceful criticism of the centre’s political stand, but in practice is actually implementing the some. Nay, it is even overdoing the role in some respects implementing SAP step by step like its partial privatization of State Electricity Board or some maintenance chores of the state govt. as well as denial of its employees’ legimate entitlements like Dearness Allowonce as per Consumer Price Index. This aspect draws fine similarity with IT-savvy CM of AP, Chandrababu Naidu. Chandrababu and Budhadav Bhattachariya are in the same boat of imperialist globalisation as regards handling of the state’s socio-economic policies, state repression and all-out support to the chauvinist anti-Pakistan hysteria by the Central Government.

These are no longer ironies.

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