Please click on the title to read an article from the Financial Express on how the IMF & World Bank got India to commit to economic reform back in 1991.
1991 was a year I remember well - young investment bankers like me were dreaming of what an India freed of the unnecessary economic shackles imposed by a succession of power hungry, incompetent & often corrupt political leaders and one quasi-democratic despot in particular, could achieve.
At the same time though, the cost of several decades of unsustainable economic policies had been mounting - the country's currency reserves dipped to about two week's of imports, photographs appeared in the press of our central bank's gold being loaded onto US military planes (yes - we were pledging gold publicly) and we were well on the way to being one more economic basket case. Many of the more knowledgeable Indian financiers thought of the then Finance Minister, now our Prime Minister, as effectively a nominee Director of India's version of a bankruptcy court. A statement announced with the national budget that year announced a whole slew of reforms and led to the country being bailed out with a loan from the IMF of about $7 billion - yes, that's all it took.
The post economic reform developments in India have been well documented but the role of the IMF & World Bank was never widely publicised. They are owed the thanks of every, yes every Indian irrespective of complaints about non-inclusive growth. The lot of the poorest has improved significantly and private media has given them some sort of voice.
Coming back to the point in the second paragraph - you might ask if today's India is the kind young dreamers like me thought about back then? I would say it has surpassed those expectations significantly in many ways with one important failing - the pretty appalling ethics in Indian public and private/business life that was a direct result of over-regulation is rampant and the country will struggle with this for a long time to come - absent any real national effort to improve things. This Government's major failing in my opinion.
A question if I may - should the title of this post be changed to "One more nail in the coffin of Dr. S's credibility!"? Or shall I use both - like Shakespeare's "Twelfth Night ..."! ;-)
Have a good weekend!