The IMF wants a new government to liberalize the economy and privatize public companies. The request will be difficult to refuse. The new government will need IMF money to avoid defaulting on its short-term debt. Yet privatization may not be easy.
Uttar Pradesh offers a cautionary tale its state government revenue decided to sell off three cement plants that had accumulated losses of $90m. Last week he knew owners went along to the by workers refusing to the change in the fracas followed the police opened killing at least 10 people. All their factories in the locality went Employees in the public sector have secure jobs get high pay for little work and make extra money from pilferage and embezzlement. Losing that extra money was an issue at the cement plants. Unions in the bigger factories have a lot of power The same underwood characters who are hired by political parties to capture polling booths-and are therefore protected from arrest-can be hired by unions or by politicians behind the unions The ham-handed police can be depended on to use excessive force and open fire. So a determined lobby can show publicly that attempts at privatization will lead to bloodshed and must be abandoned.
The future of economic management in India is linked with the even murkier subject of political management. When the rule of law is broken by its supposed guardians for political ends it cannot always be invoked for economic ends. Rajiv Gandhi was the victim of a rise in violence for which he was partly responsible. His Congress Party rules the small eastern state of Tripura and has been burning and ransacking the offices of its rivals while the police turn a blind eye. In consequence its three main rivals-the Marxists the Bharatiya Janata Party and the Indian People’s Front-are boycotting the polls in the state.
Congress is not alone in using violence The chief minister of Bihar who belongs to the Janata Dal Party and the chief minister of Uttar Pradesh who belongs to the Socialist Janata Dal Party have been seen directing thugs to capture booths Because a typical parliamentary constituency has about 500 polling booths the result can easily be fixed if a few dozen booths are captured and ballot boxes stuffed. Violence of a more elementary kind has taken place in Punjab. From the beginning of the campaign up to the middle of this week 23 candidates for the state assembly and two for parliament had been killed. By contrast the elections in Assam to parliament and the state assembly went peacefully last week with a reasonable 60% tumout. This was mainly because the militant United Liberation Front of Assam hoped that the winners would be the Asom Gana Parishad who would get rid of the army and allow the Front to flourish. If that the peaceful poll in Assam may tum out to be no cause for celebration.
Article extracted from this publication >> June 28, 1991
