People's Democracy

Economists Protest Govt Decision

Five eminent economists of the country, namely, Prabhat Patnaik, Utsa Patnaik, Jayati Ghosh, C P Chandrasekhar and T M Thomas Isaac wrote the following letter to Planning Commission deputy chairman M S Ahluwalia on September 21, 2004.

THANK you very much for your response to our misgivings on the inclusion of employees of the World Bank, the ADB and various consultancy firms in the task-forces/consultative groups of the Planning Commission. We cannot help feeling, however, that you and we are talking at cross purposes. Our objection to the inclusion of foreign personnel of this sort does not spring simply from the fact of our disagreement with their views. These disagreements exist and are fundamental; and it is not just we, but innumerable others, including third world governments, independent researchers, and even the Congress government of Andhra Pradesh, who have attested to the disastrous consequences of the “advice” given by these agencies. But there is something more involved here.

The Planning Commission, which you say must listen to a range of views, is not a Debating Society; it is an organ of the Indian state. A sovereign state is necessarily exclusionary, in the sense that its organs must exclude personnel owing allegiance to, or under the control/ patronage of, a foreign sovereign state. There can be absolutely no doubt about the fact that the World Bank and the ADB are under the control of foreign states: the US Administration routinely uses the threat of withholding World Bank loans as a means of putting political pressure on foreign governments. (We can cite numerous instances if you wish.) The Mackinsey firm has been getting consultancy contracts all over the world not because of its brilliance but because it enjoys the patronage of the US state (and other developed country states). Inducting their personnel therefore amounts to taking a step, no matter how tiny, in the direction of undermining, not just de facto but even de jure, the autonomy and sovereignty of the Indian state.

This is a point that many have missed. Inviting foreign academics, as the Planning Commission did in the Nehru era, is not the same as putting World Bank personnel on officially constituted Planning Commission bodies. The point at issue has nothing to do with “foreigners;” the point at issue is the intrusion into the domain of the Indian state of agencies controlled by foreign states.

This in our view is fraught with serious consequences. The post-colonial Indian state is the product of a prolonged freedom struggle, and though it has many failings (which have to be rectified through the interventions of the Indian people), its sovereignty constitutes a necessary condition of the freedom of the Indian people against domination by powerful foreign states.

What some state governments in India may have done in the past is of no relevance here, since one wrong, if it is perpetrated, does not justify another. Likewise, the argument that they have been giving “inputs” informally and that it is better to make the arrangement more formal and open to scrutiny, has little merit, for it legitimises the induction of all donors into officially constituted bodies of the state.

While these are the parameters of our thinking, we are rather unclear about the parameters of your thinking. Your arguments in favour of inclusion are so general that on their basis there is no scope for excluding anyone. Effectively therefore they amount to non-arguments, since inclusion on their basis can only be selective and arbitrary. A complete argument must specify the criteria both for inclusion and for exclusion. We do not find these in your letter and are therefore still left with the question: on your arguments what is there to prevent the Planning Commission from inducting personnel from foreign governments on its official bodies?

There are, in short, serious differences of approach between you and us. We cannot, for the reasons just mentioned, sit together with representatives of these agencies in these committees. We would urge you therefore to reconsider your decision to have these representatives on these committees, failing which we would have to withdraw from these bodies.

(Before we went to press, The Indian Express reported on September 22 that the World Bank, ADB and Mackinsey men in the Planning Commission bodies had offered to resign and that M S Ahluwalia was likely to accept the offer. Be that as it may, the two letters printed above are integral parts of the ongoing discourse on the subject and the issues they highlighted still remain relevant. Hence the necessity of their publication here.)