World Bank, IMF and the ‘Hunger by Design’ – Where Does India Stand?

World Bank (WB) and International Monetary Fund (IMF) (both established in 1944) – played a significant role in saving capitalism from its crisis during the Second World War. Since then, these two financial institutions gradually shifted their investment focus to the developing countries wishing to finance their developments. From 1968 onwards, WB under its president Robert McNamara (who also served as U.S. defense secretary during Vietnam War), considerably increased its conditional loans to the developing countries, especially those who were trying to implement policies that did not comply with the dominant capitalist model. From 1968 to 1973 (five years), the WB granted more loans than from 1945 to 1968 (twenty-three years) [1]. Along with repaying the debts in foreign currency, the developing countries had to resort to structuring their economic policies around the expectations of these foreign economic actors. These neo-colonial expectations are popularly known as Structural Adjustment Programs (SAPs), which are nothing but the milestones in the path of complete Liberalization, Privatization and Globalization (LPG). The different measures under SAPs are – end of subsidies on products and services of primary necessity, drastic reduction in social expenditure, devaluating local currency (short-term); and development of exports, massive privatization of public companies, complete opening up markets and liberalization of the economy which force the economy of the developing countries to take part in an unequal competition (long-term). Undoubtedly, in the past, these measures have contributed in the global food crisis of 2007, and still affecting the food-security of the people belonging to the developing countries. Approximately, 80% of the world’s hungry are in some way producers of food (pastoralists, fisher-folk, forest dwellers, rural landless farm laborers and small farmers) [2]. India is not an exception. Here, we will discuss the effect of these measures on the global hunger and will also try to assess the condition of India in this regard.

India, since its so-called ‘economic reform’ of the 1990s, has been shamelessly following the path of LPG by implementing the aforementioned measures. As a result, India has generated an external debt of 543 billion US $ (as of March 2019), which is more than six times of the same in 1991 (83.8 billion US $) [3]. To realize the future of starving India under this huge debt we need to understand the relation between SAPs and hunger. Here, we briefly discussed two aspects – firstly, the diversion of land from food grain production to export crops, and secondly, the emergence of agro-fuels as a substitute of fossil fuel.

To repay debt, the developing countries need to procure foreign currency. One way is to increase their exports. WB, IMF and other International Financial Institutions (IFIs), along with the supports from World Trade Organization (WTO) and General Agreement on Tariffs and Trade (GATT), took this as an opportunity to impose the production of handful of commodities (also known as ‘monoculture’) that create profits for the agribusiness giants, at the cost of declining food-security for the poor people of developing countries. However, it hardly helps these debt-ridden countries, as with dozens of developing countries following the same policy of exporting some specialized crops, the per unit value of their exports naturally declines, ending up with little or no rise in export earnings. Moreover, the growth rates for food grains have slowed sharply in the developing countries. In case of eleven such countries – China, India, Indonesia, the Philippines, Thailand, Vietnam, Iran, Egypt, Pakistan, Bangladesh, and Sri Lanka, over the thirteen year-period between 1989-91 and 2003-04 the rise in cereal output is only15.6%, a rate of growth of only 1.1% per year, well below the nearly 2% population growth rate of these countries [4]. In a true sense, in this system of so-called ‘free trade’ the developing countries are not free; rather they are bound to listen to this diktat of the powerful countries – ‘Produce what we need and consume what we produce, instead of importing’.

Another reason behind this ‘hunger by design’ is the forced diversion of land to produce biofuels, such as soy, beet (as biodiesel), cereals or sugarcane (as ethanol), as an alternative of fossil fuel. With heavy subsidies, the U.S. and European capitals are following this trend in their countries, and subsequently with the help of SAPs they are forcing the developing countries to follow the same path. According to an unpublished report by a senior World Bank economist, biofuels were responsible for a 75% increase in global food prices between 2002 and 2008, which left hundreds of million people into poverty and hunger [5]. A severe impact of agro-fuels is clearly visible in the rainforests in southern Asia. Logged tropical rainforests in Indonesia and Malayasia are being replaced by monoculture plantations of oil palm to satisfy Europe’s growing appetite for biodiesel. These two countries could lose 98% of their rainforest by 2022 [6]. Unfortunately, India is following the same path of self-destruction. Following their masters, in 2005, the Indian corporates expressed their interest in agro-fuel production by ‘jatropha’ farming in Chhatishgarh. In 2006, Reliance Industries entered into a formal agreement with the state of Andhra Pradesh for the same purpose. Foreign companies are also entering into the scene through joint ventures. The then UPA government issued mandate for blending of 5% ethanol with petroleum. The decision encouraged several sugarcane producing states for more production. In 2009, the UPA government announced its ‘National Biofuel Policy’, which aimed to meet 20% of India’s diesel demand, setting aside 140,000 sq. km. of land for biofuel-centric productions. The present BJP-led government is following the same path. All of these diversions of food producing lands are going on in a time when per capita food output in India has plunged back to the level of fifty years ago.

The ‘Sujalam, Sufalam, Shasya-shyamalam’ India, as envisioned by Bankim Chandra – the ideological predecessor of the present ruling party, is slipped 48 places in terms of Global Hunger Index since 2014 (from rank 55 in 2014 to rank 103 in 2018), when ‘vikas-purus’ took hold of the chariot of our ‘development’ and started setting new records in facilitating LPG in our country by implementing anti-people policies. Thus, if we want to stop the ensuing genocide by hunger and poverty, we must oppose these neo-liberal policies forcefully inflicted by the ruling class.

 

 

References

[1] Debt, The IMF, and The World Bank – Sixty Questions, Sixty Answers, by Eric Toussaint and Damien Millet, 2011, p. 52.

[2]Making Peace with the Earth – Beyond Resource, Land and Food Wars, 2015, p. 136.

[3] India’s External Debt as the end of March 2019, RBI Press Release, dated: Jun 28, 2019.

[4] Agriculture and Food in Crisis – Conflict, Resistance and Renewal, ed. by Fred Magdoff and Brian Tokar, 2011, p. 97.

[5] Ibid. p. 122;

[6] Ibid. p. 127.

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