Whew, January to February in the Japanese academic year is busy! From proctoring the nation-wide entrance exams (called センター試験), conducting our department’s own MA and PhD programme entrance interviews, and marking graduating masters theses. Amidst the spread of OMICRON, it was touch and go for a while there as to which faculty members would be physically available, but as a member of the entrance examination committee, I'm very proud of how well we adapted. Everyone did a great job communicating when it would be best to self-isolate.
On 10 February 2022, the Graduate School of International Development (GSID) held its 30th Anniversary International Symposium. Opened by Nagoya University’s President Seiichi Matsuo followed by guest speakers such as JICA President Dr Shinichi Kitaoka, MIT’s Dr Bishwapriya Sanyal and USussex’s Dr Melissa Leach, it was quite motivating to affirm GSID’s past and future mission so soon after starting here as a faculty member. I didn’t know our graduates were so impressive: GSID student 0001 is now an FAO representative – I’m trying to get some documents from their Rome archives!
Figure 1: Dean-Professor Aya Okada on how and why GSID was established
I also organized with Professor Sanae Ito (we both teach in the Poverty and Social Policy strand) a panel titled “Social Protection under COVID-19: Health, Welfare and Human Rights.” We had four fantastic presentations by current GSID students - from 研究生to final year PhD - followed by audience discussion on our collective expectations for the welfare state after COVID-19. Really made me think of my work on expectations about disease control and public health in India’s AIDS response which coincides with the country’s formal declaration of economic liberalisation in 1991, leading to my next project…
Figure 2: Four outstanding “Social Protections” student presentations on 8 Feb. @ 5 pm
…and finally, last Friday (11 Feb. at 6 pm) at the Modern Japanese History Workshop seminar series, I had the chance to present new research on Japanese development financing that I have been conducting in and between my core work on drug control, pharma and AIDS. Because I want this to be my next major project but am new to the topic, I hoped to network with scholars of Japanese economic and financial history. I was very pleased to get feedback in the audience from Professor Simon James Bytheway at Nihon University and Professor Aiko Ikeo at Waseda University. If you missed it, you can find my presentation recording below:
Figure 3: Another way of communicating research: YouTube!
I subsequently had a very interesting discussion via email with Simon about the broader implications of my proposed research, as he had referred me to his 2011 Journal of International Studies article "Economic liberalisation and its socio-economic consequences in India, 1966-1996: with reference to the Japanese experience of liberalisation" [1], so I will end this blog post with our conversation - enjoy!
“1). India was envisioned to be a very important presence in the global economy by the World Bank and all members of the international community. This was due to the size of its economy, but also indications that it was going to be a responsible and reliable member of the global economic order (despite its terrible internal administrative coordination and poor track record of redistributing wealth to all citizens). India probably was also envisioned to be a critical node of communication between: 1). the global north and south (Nehru/India's leadership of the non-aligned movement), 2). Cold War iron curtain (India playing US and USSR aid against each other, ie: David Engerman's recent The Price of Aid) and 3). Asia and the West (geographically but also due to India's proficiency in the English language). Subjecting the country to the same measures as Brazil and Argentina, both countries that defaulted, was not desirable because of this anticipated future role. So even though Japanese industries were not in favour of working in/with India by 1989 (cultural differences), I think this is the key reason why the Japanese government in terms of foreign policy along with WB/IMF gave the emergency funding despite India's political instability (we'll see if MOFA archives contributes anything to this hypothesis!). 2). I think the policy-change conditionality SAPs in most developing countries beginning with L. America in the 1980s shows that the capitalist/neoliberal Western countries were preoccupied with their own debt or reelection problems and didn't have much leeway for a solid plan for developing country debt other than: just make your policies more like mine so that you can pay your debt to me so that I can pay my own debts. I think comparatively World Bank had more foresight than IMF or the US (US wasn't friendly to India at this time-China became a WB member in 1980 and Sub-Saharan Africa clearly faced extreme poverty). The nature of its lending instruments (IDA esp.) meant WB understood poverty looks pretty much the same on the ground, whatever a country's GDP or BOP situation was. More importantly, I think India's crisis showed to the entire global community the arbitrariness of the “rules of the game” that the post-war global community established. So I'm not sure that BOP crises should necessarily be framed as corruption or hidden agendas imposed by the lender upon a victim/poor country (tho it probably is at times). Sometimes, it might be more like: the funds need to come from somewhere because we all need India to step up its game and “graduate". Is the post-war global financial system working perfectly according to the aims of its architects? Probably not. But has it provided a common ground, allowing countries to measure and exchange value in relatively standardised units (world currencies - measuring human labour and time) backed by trust without resorting to world wars? We might broaden our perspective and consider that it is. 3). Your article's point about liberalisation's impact on the rise of Hindu nationalism in an era of state retreat was so interesting. My PhD traced the Indian AIDS programme, which coincides with 1991 economic liberalisation (tho first case discovered 1986). I approached the AIDS programme as a unique expansion of the Indian state's welfare responsibilities in the shape of disease prevention and control, while the overall social sector was being defunded (incl. general public health, in terms of budgetary allocations). In fact, the 1992 Indian AIDS project (IDA funded) was the first solo disease control project after liberalisation and, funded at $84 million, was on a much greater scale than any previous WHO-supported disease eradication initiative (bc WHO is UN, essentially a grant). It encompassed some conditions about more efficient (or less corrupt) running of India's healthcare system, but also established core principles about confidentiality in testing, the need for country-wide epidemiological surveillance to inform a rational disease response, and even very liberal concepts like the human rights of homosexuals, sex workers, and drug users. So I showed in my PhD dissertation that disease control became a site through which the Indian government indirectly explored its welfare responsibilities after liberalisation. This was the reason why so many ideas about socio-economic development, the rights of the underprivileged, equitable access to basic healthcare, the right to treatment (cheaper AIDS drugs by Cipla, Indian generic giant), and the normalisation/de-stigmatization of disease came to be expressed in relation to AIDS, particularly under the Congress-UPA government from 2004 - Manmohan Singh, fin. minister in 1991, became PM and was personally very passionate about HIV. In other words, the AIDS programme was a testing ground for the Indian state's ability to "care" for the “poor and downtrodden" after liberalisation - or a handout to placate the underprivileged and win voters, if approached cynically. A few other scholars (Niraja Gopal Jayal, Devesh Kapur, Prakirti Nangia) have pointed out that the Indian government, whether BJP or INC, began to roll out a significant number of social protection schemes in the 1990s: from subsidised rice for families below the poverty line, midday meal schemes, and the National Rural Health Mission. This point is tempered with the fact that many of these programmes are not traditional cash-transfers. As Aradhana Sharma's The Logics of Empowerment has shown, these new post-liberalisation welfare programmes selectively incorporate neoliberal empowerment discourse, as if to transform all Indians, even the poorest, into rational beings that can help themselves and generate their own economic activity. Finally, it is key to note that India being federally administered, liberalisation as an overall policy negotiated by the central government with external parties, will inevitably mean very different things to actual Indian citizens in each state - by the 1990s, World Bank's programming begins to deal directly with the state governments. I think the point about how BJP-INC used liberalisation to achieve their ends in state-level politics would be very interesting to further take up. In sum, Simon, I think both of our points can coexist. I don't disagree that, compared to Japan, India may not have had as much leverage to negotiate on its own terms, but in comparison to other developing countries in L. America and Africa, it did.”
**More on the India story throughout 1991 I’ve been researching since last Friday**[2]
September 1990: VP Singh/National Front visits IMF for $550 million under gold tranche facility (not known to public at the time) but without any structural corrective measures. aka just money to pay off loans.
January 1991: the approximate 1.8 billion from IMF I mentioned from first tranche and the Compensatory Contingency Financing Facility with promise to initiate policy reforms in the Budget to be presented in February.
February 1991: Rajiv Gandhi's INC withdraws support and the planned 28 Feb. budget was called off. Instead, elections were called.
28 April 1991: Finance secretary Sriranga Purushottam Shukla and RBI Gov. S. Venkitaramanan were in Washington at the time that IMF/WB traditionally held spring meetings. Both IMF and WB were very unhappy with India - said it failed to honour the promise of reforms because of political reasons. Shukla and Venkitaramanan appeal of $700 million to the Aid India Consortium (US, Japan, Germany, UK, France, Netherlands) for temporary loans to bail out India. Yashwant Sinha had also visited Japan and Foreign Secretary Muchkund Dubey“was in Washington to persuade the US to tell Japan and Germany to come to India’s rescue. India’s lobbying had some impact as a few days later Japan extended a soft loan of $150 million with a further commitment of $350 million, Germany granted a loan of DM 685 million (equivalent of $400 million) and the Netherlands offered $30 million.”Still, this only addressed foreign exchange reserves, not the import squeeze.
13 May 1991: Now all Indian leaders regardless of party knew that India needed an early IMF loan. Deepak Nayyar (Chief Economic Advisor) and C. Rangarajan (RBI Dep. Gov.) go to Washington aiming for $700 million bridge loan.
21 May 1991: Rajiv assassinated and election polling had to be rescheduled - a stable government would not be in place before end of June. WB/IMF supports but refused to give any more loans. Chandra Shekhar sold gold in Zurich (with option to buy back after 6 months) for a $240 million - airlift operation carried out by State Bank of India on 30 May. Pledging/selling gold + rupee devaluation became points of contention with the public, as if India was bowing to its new colonisers.
**HERE IS WHERE MY NEW DATA ON JAPAN'S EMERGENCY FAST-DISBURSING AID VIA EXISTING ODA PROJECTS FIT IN**
24 June 1991: BOP was stabilised but the bigger question was India's overarching new trade and industrial policy framework having received all this loan repayment support from various quarters. This fell upon new finance minister Manmohan Singh, who held meetings with the finance ministry and separately with commerce secretary Ahluwalia (author of Backstage - the book I cited in my presentation) and industry ministry's economic advisor Rakesh Mohan. New PM Narasimha Rao gave Singh complete freedom.
1 and 3 July 1991: Rao's government + RBI decide on devaluation of rupee by 9% then 11% to make the exports worth more (to make more palatable to stakeholders) while trust and credit-rating continued to go down. Fearing withdrawals from non-resident Indians, Sinha and Rangarajan issue public statements saying, no more gold selling.
July 1991: still, to prevent default, three further rounds of airfreighting to London and Bank of England for a total of about 47 tons of gold pledged for borrowings of about $400 million: (a) 6th July - 25 tons of gold to London for Bank of England as security for another $200 million in assistance; (b) 13 July - 9.8 tons; (c) 18 July - 12 tons.
24 July 1991: Singh's budget speech following Parliament's new industrial policy.
[1] He basically said, you seem to know a lot about Charles, Diana, and Camilla but have said nothing on infidelity. I think what he meant with the British monarchy analogy was: be more assertive and direct about what you’re arguing! [2] These new details are taken from the following: AK Bhattacharya, “Two months that changed India”, Business Standard (20 January 2013): https://www.business-standard.com/article/beyond-business/two-months-that-changed-india-111070200041_1.html AND Shaji Vikraman, “In fact: The crisis of the Chandra Shekhar months, borrowings and recovery,” Indian Express (5 April 2017): https://indianexpress.com/article/explained/chandra-shekhar-1991-economic-crisis-international-monetary-fund-rbi-indian-currency-indian-rupee-value-2941277/
Comments