People's Democracy

ANDHRA PRADESH

Left Parties To Campaign Against World Bank Conditionalities

M Venugopala Rao

SEVEN Left parties, including the CPI(M) and CPI, expressed their resolve to campaign among the people and fight unitedly against the anti-people conditionalities being imposed by the World Bank for sanctioning loans and the acceptance of these by the Congress government in the state.

Addressing a meeting on ‘The continuing agreements with the World Bank and their Impact on the People’ organised at Makhdhoom Bhavan in Hyderabad on November 5, B V Raghavulu, state secretary and Polit Bureau member of the CPI(M), reminded that the Left parties had conducted movements against the structural adjustment loans taken by the erstwhile Telugu Desam government and that the people had rejected that government at the hustings after it had implemented the conditionalities imposed by the World Bank. The present chief minister, Dr Y S Rajasekhara Reddy, when he was the leader of the opposition in the legislative assembly, had termed the conditionalities of the World Bank harmful and promised to review the same if the Congress government came to power, he said. Raghavulu explained that the World Bank, in its informative paper relating to the third structural adjustment loan had maintained that the Congress government, which was formed in May 2004, has been taking the economic reforms of the erstwhile government forward. It further maintained that the Congress government, apart from continuing reforms in key issues like creating conducive atmosphere for fiscal discipline and investments, administrative reforms and reorganisation of public sector units, was also concentrating on agriculture and irrigation sectors. It is extending the programme of reforms to new sectors. On the whole, increasing the pace of reforms, Andhra Pradesh was in the forefront in the country among the states which were continuing reforms, the World Bank stated. 

Raghavulu reminded that the Congress had criticised Chandrababu Naidu, as the then chief minister of the state, for kowtowing before the World Bank and pointed out that the present government was no different from its predecessor. The statement of the present chief minister that there were no conditionalities in the loan agreements with the World Bank showed how audacious he was in telling lies, Raghavulu commented. Michael Carter, managing director of the World Bank, was saying that there were no new conditionalities, implying that the old conditionalities would continue, Raghavulu said. He demanded the government to make the agreements public.

CONTINUING CONDITIONALITIES

Quoting from the documents of the World Bank, Raghavulu pointed out that six months back, in the draft of conditionalities for discussions with the state government on loan agreements, it had proposed privatisation of power distribution companies in the state. In the latest document, the World Bank had dropped that conditionality, stating unsatisfactory experience with privatisation in Orissa and Delhi and reasonable improvements under public ownership as reasons. Raghavulu made it clear that it was a consequence of the heroic struggle of the people of the state against reforms and power tariff hike. Besides, the resistance from the officers of the power utilities of the government to the proposal of the World Bank for privatisation of distribution companies also helped in its shelving, he said. However, the World Bank had not given up its efforts for imposing conditionalites, Raghavulu said quoting its stand on supply of free power to agriculture as harmful and imposition of conditionalites in the latest document for increasing metering and reducing power subsidy to 10 per cent of the total revenue on sales of power by 2008-09. In the irrigation sector, the conditionalities were the same old ones, with a proposal for formulation of a water policy. Though the chief minister was denying, enhancement of water cess, arranging meters and setting up a water regulatory commission were reportedly among the points incorporated in the draft policy prepared by the government, he said. While the Chandrababu government had completed one-and-a-half phase of reforms in the public sector units by restructuring, selling and closing down the units, the document of the World Bank complimented the Rajasekhara Reddy government for completing implementation of the remaining part of the second phase of the reforms, Raghavulu explained. He reminded that the government had withdrawn its order number 5 relating to the third phase of the reforms in public sector units, after the Left parties and trade unions agitated against the same. However, reforms in the public sector units are going on.

Regarding urban reforms, the minister for municipal administration, K Ranga Rao, had announced that additional burden of taxes to the tune of about Rs 1000 crore would be imposed in the municipalities by 2007-08, Raghavulu reminded. While the World Bank and the state government were claiming to give more importance to health and education, diseases like chikun gunya, dengue, etc. were increasing, he said. The World Bank was telling the government to promote the private sector further in the field of health and medicine, saying that it had already covered 75 per cent in the state. The legislation enacted by the assembly, ostensibly to regulate the private hospitals, was really intended to leave the field entirely to corporate hospitals, Raghavulu said. In the field of education, the conditionalities related to elimination of grant-in-aid, thereby sounding the death knell of aided educational institutions or leading to enhancement of fees, he said.

As a result of the conditionalities being imposed in the name of improving fiduciary condition of the government and confining its fiscal deficit to not more than 2.5 per cent, priorities of the government had become topsy-turvy, with allocation of funds for irrigation increasing every year and cutting the same for education, health and welfare, thereby engulfing the latter in a crisis, Raghavulu explained. When it was suggested to the government to ensure a loan of Rs 800 crore to APSRTC for its development and improvement of its financial position, the government referred to the limitations on loans, as envisaged in the Budget Management and Fiscal Responsibility Act, he said. A legislation for privatisation of agricultural markets also was enacted. 

CHANGED TACTICS

With the kind of serious opposition to the conditionalities coming from the people, the World Bank is changing its tactics to hoodwink them. A committee of the World Bank which reviewed the consequences of implementation of its conditionalites in 2005, had recommended new proposals. In tune with them, the World Bank had rechristened the structual adjustment loan as development policy loan, Raghavulu explained. Contrary to the earlier practice of releasing loan amounts after the government had agreed to its conditionalities, the World Bank was now insisting on upfront actions for implementation of its conditionalities to release loan amounts, he said. To hoodwink the people, the World Bank was insisting on policy statements by the government to show that the conditionalaities it was imposing were really the policies of the government itself, Raghavulu explained. With such conditionalities, the Rajasekhara Reddy government was taking loans from the World Bank under APERL-III and two more loans might be in the offing, Raghavulu said. He appealed to the people to cooperate with the Left parties to take these harmful conditionalities to the notice of the people for which a programme of action would be decided.

State secretary of the CPI, Dr K Narayana, said the government was not prepared to make the loan documents public, though the chief minister had announced that it would be given to those who asked for the same. As a result of implementation of the policies of the World Bank, allocation of funds to the health sector was decreasing and health care and government machinery had become ineffective both in rural and urban areas, he said. The policy of privatisation was being pursued in the field of education. Repairs of drains and canals were being neglected as a result of which crops were being inundated, Narayana said. Except the Left parties, no other political party was opposing the anti-people conditionalities of the World Bank, Narayana said. Against these conditionalities and special economic zones, the Left parties were getting prepared to conduct united struggles, he said. 

N Murthy, state secretary of CPI(ML) Liberation, who presided over the meeting, said that other political parties were talking in terms of reforms with a humane face without going into the root causes of the problems and their solutions. The Left parties should organise a massive movement against the policies of the World Bank and on the basis of the issues of land, employment and wage, he said. D V Krishna, state secretariat member of the CPI(ML) New Democracy, said in the countries which had taken loans from the World Bank and implemented its conditionalities severity of basic problems of the people like poverty, illiteracy, ill-health, etc. were intensified. A militant struggle needed to be waged against the Rajasekhara Reddy government, he said. N Chandrasekhar, state committee member of MCPI(U), said the interests of the state and the country were being mortgaged to secure loans from the World Bank. The danger being posed to the sovereignty and economy of the country by the conditionalities of the World Bank should be fought against politically, he said. Murahari, state secretariat member of SUCI, said there were nothing like humane reforms. The reforms, as envisaged by the World Bank, were intended for the benefit of the domestic and foreign capitalist class, he said. K Venkateswara Rao, state leader of the ML committee, said the people in the countries of Latin America revolted against implementation of the conditionalities of the World Bank and their ruinous consequences. The people of Latin America were electing the Left governments, he said. T Lakshminarayana, state secretariat member of the CPI, welcomed and Y Venkateswara Rao, state secretariat member of the CPI(M), proposed a vote of thanks.