From Business World of 1 October 2004.
Selective xenophobia
Montek Singh Ahluwalia, vice chairman of the Planning
Commission, decided to invite representatives of international financial
institutions to the mid-term review of the Tenth Five-Year Plan. His decision
evoked bitter protests from the government’s leftist allies. Mr Ahluwalia has
written letters to four leftist leaders explaining the reasons for his
decision. But it is interesting that the Prime Minister, whose creation the
current Planning Commission is and who leans to a considerable extent for
support on it, has not risen publicly to the defence of Mr Ahluwalia. Leftist
leaders like a good fight, and do not give up easily. So it is likely that this
issue will be raised in their meetings with the United Progressive Alliance and
its leaders, and will continue to rumble. It is surprising that the left has
not attracted uninvited support from Mr L K Advani, who has just changed the
BJP’s motto from Hindutva to Bharatiyata. For the left’s point is that those
officially invited to critique the Plan should be pure Bharatiyas. And that may
be just the beginning; when the critiques submitted by the World Bank or Asian
Development Bank actually come out, there will be plenty in them for the left
to get excited over.
One answer to the left is their own government in West
Bengal has used foreign consultants. Not just foreign consultants: the West
Bengal government may be seen to have a preference for foreigners. Amongst the
software firms it has lured to Calcutta, PriceWaterhouse Coopers has one of the
biggest establishments. Cognizant, IBM, Sema, and Siemens are amongst the
numerous foreign firms that have set themselves up in Salt Lake. The West
Bengal government has been less successful in attracting firms outside
software; but there too, a preference for foreigners was discernible. In fact,
many Indian industrialists feel that the West Bengal government preferred
foreigners to Indians. The Tatas have decided to invest $2 billion in
Bangladesh; they would not think of half as big an investment in West Bengal.
But that would be a polemical answer in the leftist style.
For themselves, the leftists would have a response: that they are ideologically
pure and hence cannot be contaminated by foreigners. But Montek Singh
Ahluwalia, Oxford graduate, ex-employee of World Bank, just returned from a
stint with International Monetary Fund, should not contaminate himself further;
on the contrary, he must undergo a purification ceremony – unless he is held to
be beyond redemption. For others, the left’s response would be that whilst they
are glad to consult foreigners on what foreigners know best, they do not want
foreigners to determine the country’s policies. Here too they may attract some
unwelcome support from Uma Bharati and a raised eyebrow from Sonia Gandhi; but
then one cannot choose one’s bedfellows in politics.
The real point is that foreign financial institutions
already critique the Indian government’s policies. Other agencies do this as a
part of assessing the effectiveness of their aid. But the Fund and the Bank
review all the government’s policies as a matter of course; nothing is
sacrosanct. They make their reviews available to the government, so the
government does not have the choice of being in ignorance. And they often
engage commercial consultancies to do the reviews for them. So in effect, the
Indian government gets the best – or at least, the most expensive – opinion on
its policies through the international financial institutions without having to
pay for it. The invitation to the mid-term review only gives them a chance to
state verbally what they have submitted on paper already; and in return they
have to sit there and listen to interminable speeches by Indian critics,
including the left’s favourites. If anyone has a cause for complaint, it should
be the international financial institutions; but then they are quite used to
boring harangues.
It is the quality of criticism that matters, not who makes
it. Professor Mahalanobis used routinely to invite foreign economists to come
and sit in the Planning Commission in the 1950s and 1960s; thanks to him, the
world’s best economists turned their attention to India and advised the
government. Nor did they stop in Delhi; Mahalanobis took them to the Indian
Statistical Institute in Calcutta, now the citadel of the left. Calcutta then
was a tower of intellect; today it is no longer on the map. That is what should
worry the left. And that could be the beginning of a critique of Ahluwalia: in
reviewing the Plan, it is intellect that matters, not wealth of institutions.
