DDD Parliament Supremacy Undermined? An Analysis of Parliamentary Debates in India on International Financial Institutions (1984-2009) Working Group on International Financial Institutions 1 Copyleft Authors: Himanshu Damle, Joe Athialy, Leo Saldhana September 2016 Working Group on IFIs c/o 6/6, Jangpura B, Mathura Road, New Delhi 110014 Members of the Working Group on IFIs include: NGO Forum on ADB; National Alliance of People's Movements; National Hawkers Federation; National Forum of Forest People and Forest Workers; All India Forum of Forest Movements; Bharat Jan VigyanJatha; North East People's Alliance; South Asia Network on Dams, Rivers and People, New Delhi; Narmada Bachao Andolan; Nadi Ghati Morcha, Chattisgrah; Programme for Social Action, New Delhi; Focus on Global South, New Delhi; Delhi Forum, New Delhi;Odisha Chas Parivesh Suraughya Parishad, Odisha; Machimar Adhikar Sangharsh Samiti, Gujarat; Manthan Adhyayan Kendra, Madhya Pradesh; Toxic Watch Alliance, New Delhi; Water Initiatives Orissa, Odisha; International Rivers; Kabani, Kerala; INSAF, New Delhi; Srijan Lokhit Samiti, Madhya Pradesh; Ban Asbestos Network in India, New Delhi; Bank Information Centre Trust, New Delhi; DICE Foundation, Kohima; Environics Trust, New Delhi; Environment Support Group, Bangalore; Equations, Bangalore; Intercultural Resources, New Delhi; Matu People's Organisation, Uttarakhand; River Basin Friends, Assam; Urban Research Centre, Bangalore, Centre for Financial Accountability, Delhi. 2 Dedicated to the memory of SMITU KOTHARI 3 Content Acknowledgements 5 Introduction 6 International Financial Institutions And Indian Parliament 16 How Did The Parliament Perform In Problem Project Monitoring & Policy Making? 30 Conclusion 52 4 Acknowledgements This work would not have seen the light of the day, had it not been for the scores of those associated with conceiving, strategising and implementing the project. Each and every discussion on it, every word written about it has been an inspiration, for over a decade now, from the initial days when Smitu Kothari and a few others initiated discussions on the Parliamentary Oversight on International Financial Institutions (IFIs) in the mid 2000s. It was a result of years of struggles against and engagement with the World Bank, ADB and other IFIs by a large number of people’s movements and other civil society organisations on several issues, notably the negative impact on people and environment in the projects financed by the IFIs. Naming each and every organization and individual in this document would be impossible. However, we acknowledge that this document is a result of the collective work of many over several years. Many have tirelessly worked to collect information on the debates and discussions about this issue facing a dispassionate response from libraries across Delhi, including the Parliamentary library. They include Supriya, Pravin, Krishna, Rajesh, Rajat, Mayuresh, Naushad, Shibayan, Shivani, Abida, Ayushi, Sahana, Priyadarshi and Pallavi. At different stages we benefited from discussions with, and contributions from Vijayan, Sanjeev, Madhuresh, Rajendra Ravi, Soumya, Chad, Jelson, Pragya, Anuradha and others. Manisha helped editing the draft report in record time. A big thank you to all. 5 Introduction Consistent with the Busan process, explore the possibility of producing and providing guidelines for donor organisations to support their work within recipient countries by engaging with parliamentarians, so that the design of projects are responsive to the countries development needs and adequate parliamentary oversight can be exerted over donor funded programs and projects. -- Resolution at the Global Conference of Parliamentarians against Corruption, 2 February 2013, Manila, Philippines. Let us do the arithmetic of our external accounting under the public glare. There has been too much of hush-hush since 1984. There has been no accountability and the same set of politicians and civil servants who have been responsible for pauperising the nation continue to hog the center-stage. -- Dr. Ashok Mitra, Former Finance Minister, Government of West Bengal (in an interview with Venkatesh Athreya, Frontline, 6 February 2015). …5 billion SDR arrangement about to be concluded between the IMF and the Government of India…The 69-page, closely-typed document has been made available to this correspondent by one of the 22 Executive Directors of the IMF. He explained that he was breaking the confidentiality rule not in order to prejudice the loan, but solely because he was persuaded that a transaction of this scope and size by any country deserved to be “discussed in full by its Parliament, press and public”. {Emphasis is in original} -- N. Ram, Former Editor, The Hindu, Conditions which IMF will impose for loan, The Hindu, 16 October 1981. I want to emphasise just this, that this loan or the agreement for the loan, is a line of credit. It does not force us to borrow unless it is for the national interest. There is absolutely no question of our accepting any programme, which is incompatible with our policy, declared and accepted by Parliament…It is inconceivable that we should accept assistance from any external agency on terms, which are not in conformity with our declared national policy. -- Indira Gandhi, Former Prime Minister of India, in a speech to the Indian Parliament. Lok Sabha Debates, 2 December 1981, New Delhi, IN: GOI Press. National Democratic Institute, a democratic think-tank based in the United States, defines Legislative/Parliamentary Oversight as, “the obvious follow-on activity linked to law making. After participating in law-making, the legislature’s main role is to see whether laws are effectively implemented and whether, in fact, they address and correct the problems as intended by their drafters.”1 2 Parliamentary oversight can thus be considered a fundamental and critical oversight body in advancing transparency, accountability, and responsible governance within a democratic polity. 1"National"Democratic"Institute,"“Strengthening"Legislative"Capacity"in"Legislative<Executive" Relations”,"Legislative*Research*Series,"Paper"#6,"Washington"DC,"2000,"p."19,"accessible"at:"" http://www.mickikaminska.com/GOPAC/Docs/Global/Strengthening%20Legislative%20Capacity%20 in%20Legislative<Executive%20Relations%20<%20NDI.pdf"" 2"In"this"report"the"term"Legislature"is"often"and"interchangeably"used"with"Parliament."While"in" India"Legislatures"are"supreme"representative"governing"bodies"of"the"State"Government," Parliament"is"the"supreme"representative"governing"body"at"the"Centre." 6 International Financial Institutions’ (IFIs), such as the World Bank, International Monetary Fund, Asian Development Bank, etc., engage with a country employing a range of policy interventions and advancing technical and monetary assistance that impact large swathes of a country's economic policy and financial management systems. Besides, they play a strong and influential role in shaping governance interventions, in addition to influencing particular types of developments in industry, infrastructure, urbanisation, agriculture, health, education, power sector, finance, etc. All these are generally promoted as interventions and investments that advance poverty alleviation programmes, industrial and infrastructure development financing and also financial bailouts in times of economic distress which are associated with stern austerity measures. Several decades of global experience with IFI led economic interventions provide extensive evidence that the projected objectives have not been delivered. Quite often, the impacts of such interventions has resulted in tearing prevailing social and economic fabric of societies, causing massive economic slumps affecting working classes, and inequitably promoting imprudent and inhumane governance systems that protect international capital and investments over fundamental rights. Countries across Asia, Africa and South America, and more recently even Greece in Europe, have suffered serious consequences by embracing IFI initiated economic policies and programmes. Despite such extensive evidence of the systemic failures of IFI led economic and financial polices, the public at large is given to believe that these are necessary for a safer and secure world. This is largely the outcome of a systematic effort to disinform the public's understanding by limiting, or even actively denying them, their due right to being truly literate and aware of the nature of the long term implications of IFI led interventions. As a part of this process, communities and peoples representatives are not involved in directly engaging with decision making pertaining to IFI led economic and fiscal policy decisions. Such deliberately built-in opaqueness in IFI led economic policy making is in many ways designed to protect the politically powerful, who comply with such directives of the IFIs in shaping national economies in particular ways. Influenced entirely by neo-liberal economic policies that ensure protection for the powerful and influential and their access to and control of capital, IFI led economic policies give no room for any other way of thinking for building national and regional economies with the interests of common people being central. The outcome, invariably, is a process of collusion between politically powerful decision makers and the beneficiaries, largely large corporations, the rich and powerful financial institutions, and the associated in- transparency breeds deep corrupt practices.