Perhaps it may be understood from all of this why India could not contemplate the dismantling of its state controls and the embrace of global capital until there was simply no other choice — even though the Indian economy was conspicuously dysfunctional for decades, and even given the spectacular growth, during the 1970s and ’80s, of such neighbours as South Korea and Taiwan. The idea was simply too blasphemous. And yet, by July 1991 the prevailing system was in tatters and there was, indeed, no other choice. The Congress Party was discredited by scandal and rocked by the recent assassination of its leader, Rajiv Gandhi, who was Nehru’s grandson and a former prime minister — and the economy had reached a fatal crisis. Perennially unable to export enough to pay for what it imported, despite the old rhetoric of self-sufficiency, India’s foreign exchange reserves dropped in the middle of that year to just over half a billion dollars — enough to pay for about three weeks of essential imports. In order to get through the situation, the government negotiated an emergency loan of $2 billion from the International Monetary Fund. This loan came at a price. Pure gold, first of alclass="underline" the government was forced to secure the loan by pledging sixty-seven tonnes of its gold reserves as collateral; forty-seven tonnes were airlifted immediately to the Bank of England and twenty to the Union Bank of Switzerland. The other condition of the loan was immediate free-market reforms.
Manmohan Singh had been appointed finance minister precisely because he had been calling for such reforms for many years, even when they were an anti-Indian taboo, and he seemed to be the person best equipped to implement them. What he announced in 1991, indeed, went far beyond the demands of the current crisis: it comprised a fully conceived system which had been developing in his mind since the 1960s, when he wrote his PhD thesis about foreign trade. This system heralded a new economic era to come and, as he made clear in his epochal budget speech, it could not be introduced too quickly: “Neither the Government nor the economy can live beyond its means year after year. The room for manoeuvre, to live on borrowed money or time, does not exist anymore. Any further postponement of macroeconomic adjustment, long overdue, would mean that the balance of payments situation, now exceedingly difficult, would become unmanageable and inflation, already high, would exceed limits of tolerance.”
Since this speech, the Indian economy has grown by as much as 10 per cent per annum, overtaking those of Canada and Russia to join the ten largest economies in the world. So it is striking in retrospect how cautious and apologetic Singh was in putting forward his system — a system which, from our position of hindsight, has the feeling of inevitability. He gave the strangest of performances, bending over backwards to his point: for though he laid out a clear plan for the deliberate and far-reaching destruction of the old economic regime, it was cushioned all around with paeans to socialism and to Nehru — as if the only viable way to present this departure was as continuity, even consummation. He seemed terribly anxious to suggest that his was a profoundly Indian project, and that ‘traditional’ attitudes towards the outside world would be preserved: he reiterated, for instance, the familiar abhorrence of the “mindless and heartless consumerism we have borrowed from the affluent societies of the West”. And at the end, having declared that India would now integrate with the global economy, he issued his battle cry — “we shall overcome” — a quotation from a familiar protest song from the old days which, while it might have reassured his audiences that values were intact, was totally incongruous in the context: against which oppressor was it now directed? But it was a speech that was all the more revealing for its muddlement: for if Singh’s metaphors were confusing in their present context it was because they were time-travelled from Nehru’s own. No orator himself, it was clear through his cadences that the finance minister was trying to assert fidelity to the nation’s great speech-maker:
. . as Victor Hugo once said, “no power on earth can stop an idea whose time has come”. I suggest to this august House that the emergence of India as a major economic power in the world happens to be one such idea. Let the whole world hear it loud and clear. India is now wide awake. We shall prevail. We shall overcome.
Singh’s implausible attempt to arouse here invoked Nehru’s announcement of Indian independence from the battlements of Delhi’s Red Fort. “At the stroke of the midnight hour,” he had declaimed as 15 August 1947 chimed in, “when the world sleeps, India will awake to life and freedom.” Since India had awoken so spectacularly in 1947 it was of course somewhat anti-climactic to announce, in 1991, that it was still awake, but you could see what he was trying to do.
For Singh’s anxiety about how to own up to this revolution was well-founded. Already there had been outrage that the nation’s gold had been flown to the vaults of the old colonial masters. And now there was widespread disquiet about the new strategy, and about the role of foreigners — the IMF — in its formulation. As the New York Times put it, “India, which still views itself as a socialist nonaligned leader, views [economic reforms] with pain, even embarrassment… This will be seen as a kind of interference with India’s autonomy.”4
In our era, when we have lost our sense of the global power of the Soviet-sponsored system — and indeed of the ‘non-aligned’ movement advocated, among others, by Nehru — we recognise only one kind of ‘globalisation’. It is difficult for us to imagine anymore, therefore, how a vast nation could have chosen to remove itself from this particular form of globalism, or to remember how dangerous and disloyal a prospect embracing it might have seemed only twenty years ago. India’s entry into the global system, like that of so many other countries around the same time, was not the smooth reversion to a natural state it is so often imagined to be in our now-seamless capitalist world (which has lost so much of its comprehension and empathy for variety and alternative). It was in many respects a humiliating defeat for everything on which the country’s greatness stood, and it generated a schizophrenic legacy. India ‘came into’ globalisation in the same sense as someone ‘comes into’ an inheritance: with a sense both of new economic possibility, and of crippling bereavement. Money would arrive; but everything exalted and nurturing was passing away, and nothing could replace it except a flood of baseness.
Three
I drive past a billboard advertising a television business channel. It shows the radiant face of a businesswoman and the caption, “1 hour of viewing can impact your bottomline”.
Since the photo ends at the woman’s neckline and we cannot see her “bottomline”, I assume the text is supposed to read “bottom line”. But she does look very smug about something.
“The first people we interviewed declined the jobs we offered them because they thought we were loony to imagine we could work for international corporations out of India. They all thought Indian standards were too low.”
I am sitting in the office of Raman Roy,* CEO of Quatrro, a business process outsourcing company. Raman has little round glasses and wears an informal checked shirt. In his early fifties, he has an avuncular, and strikingly egalitarian, manner.
“There were so many disbelievers,” he continues. “They didn’t believe that we were capable of that quality. They had a fundamental problem imagining that an Indian could do a white man’s job. We still look up to white skin in this country.”