art-e-conomy _ reader - marko stamenkovic

Arun KUMAR
(Interviewed by Angelika Fitz & Michael Wörgötter)
Globalization of the Indian Elite,
Marginalization of the Rest
The concept of “economic liberalization” is appearing increasingly valid as a global
concept. Which specific conditions does this programme find in India? Angelika
Fitz and Michael Wörgötter interviewed the economist Arun Kumar, who teaches
economics at the Jawaharlal Nehru University, New Delhi, India, in search of facts,
background information and his assessment of these new economic slogans.
FITZ & WÖRGÖTTER: Most people agree that the policy of “Economic Liberalization”
has thoroughly changed Indian society since 1991. How does this happen? Was there
any outside pressure? Is this part of an overall process of Globalization?
KUMAR: Yes, the policies introduced in 1991 are forcing major changes in Indian
society. These policies are a result of developments both within India and outside.
Many people believe that capitalism has been successful in major parts of the world,
like, in South Korea and Japan. Simultaneously, the collapse of the Soviet Union and
the major changes in China have given the impression that communism/socialism
cannot work. The ruling classes in India have taken all this to mean that socialist
policies cannot be successful in India either and, therefore, the country has abandoned
its path of mixed development (adopted since 1950) and has embarked on a path
of pure capitalist development.
The Indian economy showed a high rate of growth during the Eighties due to rising
budget deficit and growing luxury consumption but this led to a growing budgetary
crisis, rapid and unsustainable rise in imports, declining foreign exchange reserves,
rising foreign debt and a crisis in the balance of payments (BOP) and other macro
variables. The ruling class did not see this coming and did not prepare for an
alternative set of policies. Therefore, when the crisis peaked after the start of the
Gulf war, the ruling class had to go to the IMF and the World Bank for relief. These
institutions imposed their own conditionalities and package of policies. These are
policies based on globalizing and marketizing the economy and opening it to outside
influences – cultural, technological, etc.
What kind of package did the IMF and the World Bank put together for India?
The IMF and the World Bank packages are more or less uniform for every country
that asks them for help, irrespective of the economic situation in the country seeking
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