India's N-deal

There's been a lot of attention to India's N-deal in the papers lately. Almost unanimously, the press has been in favour of the deal while berating the BJP and the Left for their "ideological opposition" while ignoring "national interests".

I have, in general, a very low opinion of opinion pieces. That's perhaps natural.

In this particular case, almost all the opinion pieces are almost uniformly ignorant and/or uncaring about the actual issues of the deal and the stated positions of the various parties.

I feel issues are important, institutions are important, rather than personalities. This is not a fight between a "spineless" PM putting his foot down against a recalcitrant left. What are the issues? I feel people will be interested in issues, but only if they're dealt with seriously.

In politics, it's very hard to talk to each other without having a shared narrative or basis of agreement. There are no easy ways to win debates. Here's my attempt to provide more perspective.

Let me raise a few questions, which I feel are relevant. People can find out about them or hear my opinions. These questions almost never come up in the media discussion on this, which is filled with hysteria.

Incidentally, I feel that much of this hysteria about "bringing down the govt." is totally unwarranted.

Let's go on to the issues:

0) What are the Indian people's positions on nuclear energy (civilian and military), US (generally and its adventures in the Middle East) and China?

It's amazing that I can't find good polls for this. One would've thought it would be an immediate and extensively studied question. I know that Indians generally do have a favourable opinion of the US, more than many others. But this is too vague a measure to be quite meaningful on specific issues.

1) What's the role of this deal in the larger Indo-US framework?
This is a question which can be looked at from many angles. A lot depends upon how we view the US role in world affairs.

Unquestionably, the US is very powerful. It's also unquestionably an imperial power bent on naked aggression as evidenced by Iraq and Afghanistan. These things aren't going to change much (contrary to Barkha Dutt's hopes) even if Bush is succeeded by someone from the Democrats. Both Barack Obama and Hillary Clinton (as far as anyone can understand what they're saying - which is a task) support keeping some level of troops in Iraq and are trying to outdo each other in hawkish statements. These are things to keep in mind. We have to decide ourselves, which we feel is more important.

2) What're the consequences of the deal for nuclear proliferation?
India is a non NPT signatory. This means that, in the view of the international community, India cannot be trusted about whether it will use the fissile material to develop bombs. Certainly, Pakistan will assume the worst (as should any sane person). This is likely lead to an arms race in the region. We have to keep in mind that Pakistan is a known nuclear proliferator and a non-signatory to the NPT.

Similar statements hold for China.

3) What's the quid pro quo for the deal? In other words, no deals are one-off affairs. What's India letting itself in as part of the ongoing process with US?
One of the other deals which seems part of the quid pro quo seems to be the 10 year "defence" deal with the US and the arms deals with Israel.

We need to ask ourselves the question: do we need more arms? When so much of our population is living is horrendous poverty? India has one of the lowest expenditures on health and education in the world, no wonder, its human development index is comparable to sub-Saharan Africa. What should be our priorities?

4) What about energy issues? Also related is India's relations with Iran. How much of the future energy would nuclear power generate? Is it clean, inexpensive and plentiful? What about questions of self-sufficiency? And sovereignty? What will happen to the Iran-Pakistan-India pipeline?

5) With regard to the Left's position on this matter: What exactly is their position? The question was asked rhetorically by Vir Sanghvi's article in HT, "What is the communist manifesto?" It seems strange that in the article he doesn't even try to find out their official position. Indeed, the deal itself gets scarce mention, amidst an orgy of left-bashing.

These are just the immediate questions which come to mind. To have not addressed these seriously shows a clear incompetence/bias/whatever in the media.

Here's an article which I found giving some more perspective (totally pro-Left, but gives some facts):

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There is something deeply reassuring about the corporate media's tirades against the Left in the context of the Left's opposition to India's nuclear deal with the US - the Left must be doing something right. And going by the shrillness of the attack, it's hitting where it hurts.

Look at only one newspaper, the Hindustan Times, over the last four days. On 16 August, CNN-IBN's Rajdeep Sardesai wrote on the Left's opposition to the nuclear deal. (http://www.hindustantimes.com/StoryPage/StoryPage.aspx?id=847b5aea-11f2-43fe-b221-67323df41c3d&ParentID=671f1d5e-8fad-4cc1-9e4e-65f5efb9c29e&&Headline=Karat and stick) The large bulk of his column is used to bash the Left, especially Prakash Karat, the CPM's General Secretary. Sardesai comes to the deal itself in the penultimate paragraph, only to tell us that "This is not about the details of the 123 agreement any longer, not even about a robust discussion on the country's energy needs, this is simply now about the unseen 'dangers' of forging a closer strategic relationship with the 'Evil Empire' in Washington." Since Left ideologues have "spent a lifetime seeing the world through the prism of the Cold War, the collapse of the Soviet Union has not meant the end of ideology." He accuses the Left of an "unwillingness to grow up, to recognise that while one has the legitimate right to oppose, the nature of the opposition cannot be such that it begins to resemble a spoilt brat who is being denied the entire cake of power."

Not a word on why the nuclear deal is in fact good for India.

Not to be outdone, Sardesai's former colleague, Barkha Dutt of NDTV 24x7, launched into the Left with gusto in her own column the following day. (http://www.hindustantimes.com/StoryPage/StoryPage.aspx?id=671f1d5e-8fad-4cc1-9e4e-65f5efb9c29e&&Headline=Left in a time warp) All the usual anti-Left clichés are there: the Left leaders are "dour faced," they sound like "Stalinists," who have the "government on its knees, blackmailed into submission." She counsels the Left to "put an ear to the ground." Translated into simple English, this means, listen to us. "The problem with the Left, . . . the reason for Modern India's disdain for them, is that while their heart is in the right place, their mind is woefully out of sync with our aspirations." These aspirations "take us westwards." Even though "we may oppose the war in Iraq and Afghanistan," "(our) future as global players is linked to the American dream," because "(we) know how to distinguish between Bush and the country he governs."

This is lovely. I oppose the war in Iraq and Afghanistan but don't ask what led to the war. I distinguish between Bush and the country he governs, which is why I trust the administration he heads to give us a treaty that is beneficial to us. And, since our future is linked to the American dream, I am confident that the Americans will never renege on that treaty, citing domestic law.

No wonder, then, that the details of the 123 agreement are "gobbledygook" to her.

The following day, it was Vir Sanghvi's turn. (http://www.hindustantimes.com/StoryPage/StoryPage.aspx?id=17e23240-f37f-460e-877b-61bca13067a5&&Headline=What are the Communists up to%3f) It has become mandatory to nod at the Left's clean image and to acknowledge that the Left leaders are "men - and women - of integrity and principle," and Sanghvi too does the needful: "In a political environment where only money and power seem to matter, the Left stands out as a grouping that believes in ideology and principle. Put the Politburo next to the Congress Working Committee or the BJP National Executive and even a child will be able to tell the difference in intelligence, stature and integrity."

There's some serious Left-bashing here. Sanghvi slyly suggests that "the CPI played no role in the freedom struggle;" but of course he is not saying it, he is merely reporting a "right-wing smear." But accounts of "global communist tyranny" are taken as fact: "Joseph Stalin killed 20 million people - over thrice the number killed by Adolf Hitler's Nazis. Figures for those who perished in China while the CPM was translating Chairman Mao's Little Red Book into Bengali are harder to come by, but a number of 50 million seems conservative (many accounts say it was 70 million)." Where these numbers have come from is obviously of no consequence.

Sanghvi's lament is that "when the UPA government was elected, the Left had a historic opportunity . . . to recast itself as a liberal force for good which held out against the power of multinationals, fought for the preservation of the environment, and defended the rights of the individual" - in other words, forget class issues, be blind to systems of exploitation, become namby-pamby do-gooders - but "sadly, the Left has blown this historic opportunity."

That is the problem. Prakash Karat and Sitaram Yechury walk like us, talk like us, why the hell can't they think like us? They'd be really nice guys, you know, if only they weren't commies.

And then there are the insinuations: it is alleged that "the UPA took the Left into confidence before signing the agreement," and therefore the Left's opposition is "no more than a politically expedient afterthought."

What stands out in all these tirades against the Left is, of course, the unwillingness to discuss the issue at hand. To my mind, The Hindu is the only paper that has seriously and consistently gone into the specifics of the deal, and tracked it over time. See, for instance, Siddharth Varadarajan's piece of August 20. (http://www.hindu.com/2007/08/20/stories/2007082058271500.htm) While the paper has endorsed the 123 agreement itself editorially, it has suggested that the agreement be put on hold while the government schedules "an earnest round of all-party discussions, which must take in objections, apprehensions, reservations, and questions relating to the nuclear deal that have come from all serious quarters."

All the others, Hindustan Times, Times of India, Indian Express, Pioneer, the whole lot of them, have turned the nuclear deal into what Barkha Dutt so eloquently described as "gobbledygook."

Since the deal itself is "gobbledygook," the Left's opposition is variously characterized as an ego clash between Prakash Karat and Manmohan Singh (which is the surest way of trivializing an issue), as blind anti-Americanism (but not anti-imperialism), or as betrayal of confidence (though we are never told when exactly the Left's consent for the deal was actually acquired).

Then there is the other bogey: India's energy security. Sagarika Ghosh of CNN-IBN put the question to CPM's Mohd. Salim on live television on the night of August 20 saying "no deal, no bijli (electricity)." Salim asked her a simple question: how much electricity are we going to get from this deal, and when? Ghosh was silent. Salim repeated the question. Silence. When Salim began answering his own question, Ghosh cut him off, with a question about the Left's "anti-Americanism." (For the record, nuclear energy satisfies 3% of India's energy needs currently, which is expected to go up to 7% by 2020.) And, while on energy, why isn't anyone asking what will happen to the gas pipeline from Iran?

As for the Left's actual opposition to the deal, and the reasoning behind that opposition, it never existed. Accordingly, you hear a tone of injured exasperation - "what IS the communist manifesto?", as Sanghvi's piece was titled.

Well, all they need to do is to recall recent history: the Left has opposed the deal consistently ever since 2005, when the Indian Prime Minister and the American President issued their famous joint statement in July, which itself came on the back of the 10-year Defence Framework Agreement. The Left has reiterated again and again that the nuclear deal has to be seen in the context of the larger strategic aims of the U.S., in which it sees India becoming an imperial largest outpost in South Asia. The Left's vigorous opposition forced the Prime Minister to give assurances to the Indian Parliament exactly an year ago, on August 17, 2006. (For a sober statement of the Left's objections, see Prakash Karat's article, "Why the CPI(M) and the Left oppose the nuclear deal," available at http://www.hindu.com/2007/08/20/stories/2007082058071400.htm)

One would have expected the media and commentators to put a simple question to the Left: you had expressed satisfaction at the Prime Minister's statement in Parliament in August 2006, so how do you think the present 123 agreement reneges on those assurances?

But this is a vain hope. Because the moment you ask this question, you admit that the Left's opposition has not materialized all of a sudden, out of thin air. Even more importantly, you focus on issues.

That is quite simply the last thing the corporate media wants. Any criticism - or even mention - of the American imperial project is a strict no-no.

Obeisance to the master is the order of the day. The rest is gobbledygook.
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Here's also a blog entry discussing the deal.

Poverty in India

I'm investigating this right now. Utsa Patnaik is a veteran economist at JNU. She's done a lot of work on rural poverty and nutrition levels. She has written many op-eds in The Hindu, which seems to be the only newspaper that'll touch her.

http://www.hindu.com/2005/08/05/stories/2005080501971000.htm

According to Patnaik, the rural poverty levels claimed by the Planning Commission is bogus. Poverty is increasing, not decreasing, after the neoliberal reforms of the 1990s. The poverty line has been lowered continously by around 100 calories per diem for every five year period since 1975. So the poverty level claims are gettting increasingly irrelevant and wrong. Also, when the Public Distribution System changed from universal to targeted in 1997 - targeting only the below poverty line people, this had profound implications for the many poor, but not counted people.

Also, check out this interview:
http://www.hinduonnet.com/fline/fl2113/stories/20040702006302200.htm

I can't find any sort of discussion on this in the newspapers. Shouldn't we be concentrating a whole lot more on this? It's about three-fourths of India's population.

India's unorganized sector and agriculture

What have been the effects of neoliberal reforms in India? It's a broad question and there's no simple answer. However, if we are concerned about fairness and justice, we should be looking at the impact on the agricultural sector, which employs 600 million people and not just at the glossy BPO and IT sectors which are miniscule by comparison.

I'm still studying the impact, but the following report sheds some light on this:
http://nceus.gov.in/Executive_Summary_08082007.pdf

"In the last several years, the growth rate of agricultural wages has declined and there are evident signs of agrarian distress in many areas which specially affect marginal and small farmers. There is now a clear need to address this sector (i.e. agricultural labourers, marginal and small farmers) in a focused way. "

Globalization

The following is a reproduction of a discussion I had with my friend. The essay is my reaction to India Unbound, a book by Gurcharan Das.

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This essay is very long. I hope I don't bore you with it. Probably, if we have a discussion, in future, I'll concentrate on one or few aspects. Also, probably, I could have split it into a number of essays.

Let me have a shot at a reaction to India Unbound. Again, let me first give some general remarks, then go into details.

Zeroth, let me say that I liked it and would be reading it in more detail, again. It is one of a series of books I am planning to read to make sense of the Indian political and economic scene. If you have more ideas of books like that, I'll be happy to try them.

I'm interested in globalization, the few books which I've read are: Making Globalization Work by Joseph Stiglitz , In Defense of Globalization by Jagdish Bhagwati and Development as Freedom by Amartya Sen. I've also read a lot of Noam Chomsky's work on markets and globalization.

India Unbound talks about two things. a) Nehruvian socialism b) The neoliberal reforms of 1991.

First, let me make a few observations. The whole book is written in an entertaining, anecdotal form. While anecdotal evidence is useful, it's dangerous, at least in principle, because you can sort of validate any theory on the basis of anecdotes. There are a lot of endnotes, and I plan on going through them in detail.

Next, the book concentrates on the manufacturing / knowledge-based sector generally. There's very little, almost no mention of the agricultural sector. This is significant. It's a reflection of Das's background which is mostly in the manufacturing sector and management. While the manufacturing sector is important, it's very important to have a perspective of what's happenning in the agricultural sector which employs 600 million people with another 200 million indirectly affected by it. In view of this, I find the book having a very narrow perspective. In coming to a decision between "socialism" and "capitalism" (I'll explain the quotes in a second), it's quite important to have view of all the implications.

The dominant theme throughout the book is one of "freedom". I agree with that, in principle. For instance, in his book Development as Freedom, Amartya Sen argues that (I'm oversimplifying a bit here), freedom can be thought of as both the end and the means to development. To take a concrete case, consider one of the areas in which Sen has written about extensively, famines. He points out that there has been no substantial famine in any country which has a multiparty democracy and a relatively free press, like post-independence India. But, for example, during Mao's Great Leap Forward in the 1960s, communist China experienced massive famine, killing 10-15 million people. There is, in my view a very good case to be made for increasing the freedom of people in the world.

Let me make a few comments about "socialism" and "capitalism".

Socialism is a broad theory. The main element of socialism is control by the people, both in the political and the economic sphere. The relevant principle for economics is "workers control of the workplace". The principle is simple (we may argue whether it's right or wrong), "the people who are involved in production ought to own it".

Now, there are different approaches to socialism. They can be broadly classified as "statist" or "non-statist", depending upon how important the role of the state is.

"Nehruvian socialism" was a statist approach to socialism. We can ask ourselves if it fulfilled the aim of having worker control of the workplace. In my view, it largely failed in this task. The industry was controlled by bureaucrats, not the workers. That's an important distinction.

Capitalism is also very broad. The idea is that people should be free to choose and the decisions on production are to be made through a market mechanism based on supply and demand.

There are many issues regarding capitalism, but we can say that the two of the dominant issues are that of corporations and importance and fairness of the market. I'll give you my view.

What exactly is a corporation? Well, corporations are basically dictatorships, with a more or less hierarchical structure with orders going from top to down. There is, broadly, a worker class and a management class and these are hierarchical structures. The exclusive goal of the corporations is to have large, growing, sustainable profits for its shareholders. That's fine, but we have to be clear about what it is. Corporations are not accountable to anyone else except its shareholders. For example, if Coca-Cola sets up a plant somewhere, it's not accountable to the local people, but only to its board of directors. That's the basic setup. How fair it is, we can argue.

A related issue is the market mechanism. There are many critiques of markets. I find, in India Uncut and many of the other blogs a feeling that "markets know best" and freedom means cutting down on govt. power while encouraging private enterprise. I'd urge you to read the books of Joseph Stiglitz, Nobel Prize winner and former chief economist of the World Bank, on what he calls "market fundamentalism". His main contribution is "information theory of economics", where he shows that, under conditions of imperfect information, (that is, always), markets don't lead to efficiency. Markets will produce too little of some things, like basic research, and too much of others, like pollution.

For example, just look at the main innovations of the American economy, to name a few, internet, communication, airlines, drugs, biotech. Let's take the internet. As you know, the internet was basically a product of the publicly funded Pentagon system. It was basically set up in the 1960s and there was important research, mainly in universities till about mid 1990s when it was handed over to the private sector. Since then, its character has changed (whether for the good or not, we can argue). Earlier, the buzzword was "information superhighway", now it's "e-commerce".

Let me make a general statement. Markets, by themselves, don't produce enough of basic research. For example, just look at India. Where were the main centres of excellence in the past? - IIT, IISc, ISI. They are relatively autonomous institutions, but are funded by the govt. There are many other centres of learning, like NIIT, Aptech. What's your view of them? I'd like to hear them.

Some more examples. We hear a lot about R&D in American drug companies. First, a huge amount of investment is through the publicly-funded university system. Next, we can look at what it has produced. Keep in mind that R&D in drug companies is huge. We can look at the different products which have come out in the past 10 years. I don't have an accessible source for this, this is coming from memory from Making Globalization Work . The large majority of products are the so-called "lifestyle products", like Viagra or skin lotions or stuff like that. There are very few products for important diseases like cholera or malaria or other things. Again, I'm not saying that the system is useless, but we have to be clear about what it is and whether this is what we want it to be. The overwhelming majority of patents are for slightly different molecules which some other company has not patented.

Summarizing, in my view, the role of the govt. is not just to keep law and order etc, but an active interference is required for markets to function well. Like building infrastructure, like roads and universities. Like education and health. It also has its seamier side, like US govt. interfering in Iraq to protect its oil. In fact, the American system is basically a "state capitalist" system. Again, we can argue as to whether these kinds of interferences are ethical or effective or whatever, but its clear (to me) that they are required and expected.

For example, you might have done macro-eco? Remember Keynesian economics? Keynes' contribution was in periods of slow growth or recession, the govt. can stimulate the economy my massive intervention. Stiglitz places Keynes' contribution as the most important in the history of capitalism.

Let's get back to India Unbound.

India's Human Development Index places it at 126th in the world, comparable to sub-Saharan Africa. In view of this, we can safely claim that a) was a failure.

Let's look at b). "Neoliberalism". Let's take the 1991 reforms in India. In India Unbound, Das gives an anecdotal view of the role of Chidambaram, Narasimha Rao and Manmohan Singh. I still know very little of the background, but, in my view, the reforms were mainly a product of the "structural adjustment" programs of the World Bank and IMF. Manmohan Singh etc. were only responding to the pressures of the institutions due to the financial crisis. Thus, the reforms only lasted for 2-3 years and haven't been pursued very strongly after that. (We can see that in the current govt., when Manmohan Singh is the PM).

Anyway, it's a fine point. We can agree, I think, that the role of these financial institutions was at least as important as Manmohan Singh etc.

This raises a few questions: (The questions are arranged in decreasing order of my knowledge about them. I still need to know a lot about all of them).

a) What's the history of neoliberal reforms around the world? What was the role of the World Bank etc. in this? Do the western countries follow these rules?
b) The "Asian Tigers", in South East Asia. What was their strategy in their period of growth in the 1980s? Was it comparable to neoliberalism?
c) What about China? What's going on there?

Let me address these questions.

a) First, let's look at the theory of neoliberalism. The "structural adjustment" programs, also called the "Washington Consensus" - namely the consensus between, World Bank, IMF and US Treasury dept. (that's what it is - the US dominates these institutions). What do these entail?

In a "free" market, there are basically two kinds of freedom, freedom of movement of labour and freedom of movement of capital. Neoliberalism refers mainly to free movement of capital, not labour. In fact, as the US is passing more and more draconian immigration laws, freedom of labour is severely restricted. Let's look at the Washington Consensus policies.

The main measures are fiscal conservatism, namely, less govt. expenditure in many areas. Also, it involves privatization of many public-sector industries. It involves the strategy of export promotion instead of "import substitution". It involves cutting down or eliminating tariffs. Let's look at what liberalization theory says.

According to theory, the economy will be a dynamic one, with jobs continously being created and destroyed. The economy will move from low wage/low-productivity jobs to high wage/high productivity jobs. There will be both import and export of the same commodity, for example, rice. India both imports and exports rice depending upon where the market is.

The country as a whole will benefit (in theory), but there will be some losers. The losers being the unskilled and low-wage workers. This is what the theory says. How ethical it is, we can argue.

For example, Stiglitz points out, that in most developing countries, unemployment rates are very high. The "dynamic" economy, when it destroys jobs, the workers don't move on to high-productivity/high-wage jobs, but simply add to the unemployed force.

In theory, even a moderate liberalization of labour would have many times the impact than the liberalization of capital. But, since the big capital countries tilt the playing field to their own liking, it's capital liberalization which is being implemented.

That's the theory, what's the practice?

My main source on this is Making Globalization Work. In the book, Stiglitz says this: With globalization, development is possible, but not inevitable. Most economists agree that the Washington Consensus policies have failed.

Why did he say that? Let's look at the history. I'll concentrate on four areas: Latin America and Central America, East Asia, Russia after the fall of the Berlin Wall and India.

i) Latin America and Central America are the areas where the Washington Consensus policies were tried extensively. I'll mix up politics and economics in this, because, in my view, they're both important in this and I feel that they're two aspects of the same thing.

Let's first concentrate on South America. Let's take Argentina, one of the cases which Stiglitz discusses in his book.

Argentina was one of the poster children of the IMF. The IMF gives grades to countries as to many factors like credit worthiness, macroeconomic health etc. Argentina was an A+ student. It carried out "structural adjustment" programs extensively. The result of these policies was that it went deep into debt. It kept on falling into a deeper and deeper debt crisis and then finally its new president just said - NO. It just refused to pay its debt. That was the biggest default in IMF history.

With the default and the rolling back of many of the structural adjustment programs and massive state intervention in the economy, Argentina did something no-one expected it to do. It grew. It grew 7-10 percent, a very healthy growth rate, comparable to India and China.

Let's look at Central America - Guatemala, Nicaragua, Haiti, Honduras, Mexico. I'll be talking generally here, but I'll go into details on any country if you want.

Just imagine, what kind of image do you have of these countries? I'd think, an absolute symbol of destruction. The first four countries have been so systematically destroyed that there's little hope of recovery. Mexico is a somewhat different case.

For instance, around 60% of Haitian children are suffering from malnutrition and probable brain damage. It's the poorest country in the hemisphere. Similarly, Nicaragua, the second poorest country in the hemisphere.

The result of these policies is that there have been left-of-centre governments throughout Latin America. People have become disenchanted with IMF policies. Latin America once constituted 80% of IMF's clients. Now it's less than 1%.

b) Let's look at Russia. Russia was the object of "shock-therapy", which is a sudden transition to a market economy from communism. Let's look at what happenned.

The few years after the fall of the Berlin Wall were a catastrophe for ordinary Russians. Incomes fell 40%. Poverty rose 10 times. Inflation and unemployment soared. There were a huge number of oligarchs created, with massive capital flight from the country. You might have read about Roman Abramovich, the Russian oil tycoon who purchased the Chelsea football club and a number of county estates in the UK. The IMF lent more money, it all flew out.

Nobody wants to go back to the repressive communist regime, but the Russians are asking, what kind of economy is this?

ii) Next, let's look at East Asia. In East Asia, there are very strict controls on speculative capital and capital flow. In Singapore, there's the death penalty for capital flight. That takes care of that.

What was the strategy of the East Asian "tigers"?

I'm still learning about Japan, Korea, Taiwan etc. But it's clear that the states intervened massively in the economy. First, as Sen notes in his book, the conditions before the economic "miracle" were already there. These countries had very high literacy rates (primary education was extremely important) and social welfare programs. In these countries, Sen notes, development came first, then growth. These countries had a well-developed population which was ready to be put into manufacturing high-tech goods. In contrast, we can see what India's literacy and health standards are. Also, there are many studies of Japan, where the Japanese MITI (Ministry of Trade and Industry) worked very closely with the industries and ignored many market rules (for example Japan always runs a trade surplus, which means that there is a corresponding trade deficit somewhere in the world). I'm still studying this, but it's clear that Japan and the other tigers ignored market rules and had massive state intervention.

You might have read about the East Asian financial crisis. It was again due to IMF policies. As Stiglitz notes in his book, these countries already have a very high savings percentage. (Like Korea saves around 30% of its GDP, China 40%). They already had the resources and the citizens could spend money to stimulate the economy. But instead, they borrowed money from the IMF (and crucially other private investors) and freed up capital flow. For a while there was boom, then sentiment changed and massive capital flight took place.

iii) India: Let's look at what India is. A large majority of India is involved in agricultural sector. This is where Das's book is very weak, as I mentioned. Note that liberalization theory says that the unskilled, low-wage workers would be hardest hit. In theory, these people can be compensated, because the country as a whole benefits. But in practice, this seldom occurs.

I'm still studying the effect of liberalization on Indian agriculture. It's by no means pretty. Let me illustrate one of the main issues which you may have heard about.

The EU and US have massive subsidies for domestic farmers. In the US, a big share of the subsidies goes to the large agricultural corporations, which is a form of "corporate welfare". Despite these huge subsidies, farmers are leaving agriculture. One European farmer quits every minute. There's that old joke that it's better to be a cow in Europe than a farmer in India, because a cow gets a $2 subsidy per day. 70% of India lives under $2 a day.

These subsidies are a big reason why the agricultural market is unfair. You might have read that India and Brazil had made this one of the main issues in the WTO negotiations.

The effects of neoliberal policies are still being studied, but the World Bank estimates that there would be massive rural-to-urban migration.

http://www.zmag.org/sustainers/content/2007-07/08sharma.cfm

I don't know how balanced or accurate this is, but you can look at that.

In about 10-15 years more than 400 milliion people in India would be migrating to urban centres. You can imagine the slums in Delhi and Bombay. Now imagine them being much worse. Around 40-60% of people in states like Tamil Nadu, Andhra etc. would be migrating to urban centres because they can't live on subsistence agriculture any more. You might have read about the farmer suicides in Andhra. More than 25,000 farmers have committed suicide in India, since 1997.

These are things which are also part of globalization. We should be looking at them too when we talk about India's growth and "superpower" status. Globalization has many possibilities, but we must be aware of its implications.