Liberalisation

Political compulsions faced by a government in times of liberalisation often have an impact on economic reforms. This paper examines Chandrababu Naidu's regime in Andhra Pradesh and the task it has cut out for itself in carrying forward the liberalisation agenda while tackling popular compulsions. It also examines the character of the regime shift in seeking to incorporate different societal sections into its fold by carving out new political and social constituencies for its liberalisation reforms.

In developing our future negotiating positions, we need to think far more systematically than we have done so far. At least three strategic conclusions can be drawn from the Uruguay Round and Doha experiences. First, we need to consider the direct benefits to us of any demand we put forward in the negotiations. Second, diplomacy requires that we define our negotiating position positively rather than negatively. Finally, and most importantly, prior to defining our negotiating position, we must think hard about the end-game. By repeatedly staking a position that is far from what we eventually accept, as has been the case in the UR Agreement and the Doha Declaration, we lose credibility in future negotiations and risk being isolated. This risk has now increased manifold with the entry of China into WTO.

The Republic of Argentina has proved the point. It is not necessarily TINA. There can be an alternative, there is an alternative. Suppose, way back in 1991, the Indian ruling class, instead of capitulating, had defaulted on the country's external debt commitments, India need not have gone down either.

Privatisation is very much the flavour of the day. Many enthusiasts of privatisation seem to believe that a shift from public to private ownership will automatically make for improved performance. Yet there is little in economic theory or the empirical evidence on privatisation that lends support to such a simplistic belief. The evidence on the impact of privatisation is by no means unmixed. In particular, in less developed countries, where law enforcement and corporate governance tend to be weak, private ownership does not necessarily make for better performance. It is possible, based on the research on privatisation, to draw some tentative conclusions for privatisation policy in a context such as ours.