ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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NEW DELHI-Closing in for the Killz

NEW DELHI Closing in for the Kill BM Any front of secular and democratic forces must make it a paramount condition for any arrangement for defusing the political crisis that the government desist from negotiating with the IMF, in particular for a loan under the EFE IT cannot be fortuitous that in the midst of the political turmoil and widespread civil disturbances following the demolition of the Babri masjid, the IMF, World Bank and Asian Development Bank have rushed to release more credits for India and to initiate negotiations on still further loans, especially under the medium-term extended fund facility (EFF) of the IMF for completing what is euphemistically called a three-year programme for the structural adjustment of the Indian economy. The mainstream political par- tics engrossed in hectic moves to rearrange their alignments in the name of combating what is perceived by them to be the grave threat not only to political stability but to the very unity and integrity of the republic, have let pass what are clearly interventionist moves by foreign agencies in an uncertain situation without much notice. It appears that the international financial institutions and their political overlords actually consider the prevailing conditions opportune for them to redouble their efforts in India. The other problems and challenges it is facing notwithstanding, the government headed by P V Narasimha Rao is extending full cooperation to them to push ahead with the IMF/World Bank reform programme The international financial institutions are making a show of their willingness to enlarge financial support to India in a difficult phase for the implementation of the reform programme. Both they and the government of India must be greatly relieved that the attention of the critics of the reform programme has been diverted by the Ayodhya happenings and their aftermath so that the government will enjoy greater elbow room in a crucial phase of the implementation of the programme. The IMF/World Bank combine finds it to be a copy-book situation for advancing its interests, going by the dictum laid down by the World Bank that "governments do well to capitalise on the broad, politically short-lived mandate for reform that crisis confers by front loading the reform programme" and that "erring on the side of speed appears to be best... if political opportunity for reform is unlikely to last". Hence the decision to start negotiations for a massive loan under the EFF, even as two tranches of the ongoing stand-by credit amounting to $ 640 million have been released. Side by side, as earnest of the co-ordinated effort in support of the government, the ADB and the World Bank have released S 150 million and $ 200 million respectively of structural adjustment loans.

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