Meaning of liberalization
Liberal is a fine word having a number of connotations. According to Oxford Advanced Learners Dictionary it stands for a person 'open minded; having, showing broad mind, free from prejudice'. Until 1920 it stood for the principles of the Liberal Party 'favoring moderate democratic reforms', 'in favor of progress and opposed to privilege'. American Webster's Dictionary has added new dimensions to it 'lacking moral restraint, and 'associated with the principles of political liberalism, esp.: economic freedom, greater in dividable participation in government' and 'constitutional political and administrative reforms designed to secure these objectives' and 'not bound by authoritarianism, orthodoxy, or traditional forms'.
Liberalization is a noun from liberal i.e. it covers all the ideas or ideals I hat the root liberal connotes. When the Indian Finance Minister Dr. Manmohan Singh declared the policy of liberalization in 1991 one just wonders covered all these concepts that the two dictionaries hold for it whether beneficent, or maleficent. 'Progress' and 'economic freedom' are the two norms adopted by the Finance Minister in 1991 hardly knowing that if the generosity is shown to others the monetary gains accruing to them from it would naturally be surrounded with all the other meanings of the word. The arrow had only one target—economic progress. But on the way hit many interests of the nation.
Liberalization started by Rajiv Gandhi
It may look strange but the process of globalization or liberalization had started much earlier. The late Prime Minister Rajiv Gandhi took the theme of liberalization as soon as he took the 'gaddi' after the assassination of his mother who, like her father, had a leaning towards the left and had snatched a number of establishments from the private sector. May be because of his associations with the West through his wife the Pepsi chapter was reopened. With the new Congress government taking oath in 1991 it was expected it would guard the country both from the left and the right.
Liberalization as panacea
The left having dissolved itself in the West, the new Prime Minister, his Finance Minister and the people having the portfolios of Commerce and Industry had to be wary of the designs of the whole platoon of G7, G12 and the 104 countries having interest in the GATT. But the things turned different. They slipped into the machinations of the unipolar world like a child who had been waiting for the toffees as soon as he got an opportunity. Manmohan Singh, a past socialist and a declared economist having shed off his past leanings declared liberalization as the panacea for all economic ills. Liberalization meant opening the sluice gate for the torrential gush of MNCs.
Like the now converts to Islam and Christianity who waited for the Muslim and British invaders to run over the country the subsidiaries and collaborators of the MNCs did not only create a congenial atmosphere for the entry of their foreign bosses through whom they had been having a pittance as compared to the payments made to the parental bodies but also pressurized the government through their different Federations of Trade and Commerce. They just wanted to have a little more of the share of the loot on the one hand and also opening of the passage for the money so earned by them flow to spurious foreign bank accounts.
Liberalization and equity shares
The lure was quite tempting, most probably for some of the bureaucrats in high position and may be for the leaders of the ruling party too as the Jain Hawala episode has shown. The NRIs working as brokers too were beneficiaries. Examples in the past have not been lacking. Liberalization started with offering 51% equity shares. But it tumbled within no time as the demand for 100 % equity shares was not accepted but offered.
Just as speaking and studying English is considered a position of status the economic slavery too has been considered a point of international status and is coming to the country with a bang. The consequences are not dangerous but horrible. This open market economy would not mean India entering the world markets but the MNCs entering Indian markets and their governments claiming even land in this country. Once the ownership of land is theirs political sovereignty too may be overridden. We may face the conditions that are being experienced by countries like South Korea, Singapore and other small satellites in Latin/America.
Starting of globalization in India
The new government in 1991 had certain compulsions. It had to provide for foreign exchange by pawning gold reserves in England. Thanks to NRIs and the end of Gulf War that the foreign reserves increased and we could get the gold back. But this was not a permanent solution to the decreasing exports and increasing imports. The exports of developing countries, including India of course, fell from 29% in 1980 to 21% at the end of the decade. Similarly the share of manufactured goods saw a fall of 6.5 per cent from 26.5 in 1980 to 20 per cent in 1988.
There is no doubt that subsidies play an important role in the exports from India as they do from most of the Third World Countries. There are restrictions on imports too based on export subsidies. This all was based on the former USSR pattern. As the system failed in the Communist countries and brought those nations at the verge of penury and starvation India, in a hurry, took certain decisions that would take the country from the controlled and close economy to open market economy.
But unlike China that has been moving in the same direction since the advent of Deng, as the real patriarch, India looked in a hurry towards world financiers like International Monitory Fund and the World Bank. Both of these have, ever since their initiation, been under the control and pressure of the USA. After the end of cold war by 1990 USA has been in a dominating position to dictate its terms to the nations that applied to the World financiers for any type of help. India being a big country having more than 2 crore middle class elites is a good market for sophisticated items.
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