NEW DELHI-Home Truths from Carla Hills

NEW DELHI Home Truths from Carla Hills BM Any illusion that there can be trade-offs, fall-back positions and quid pro quos in negotiations with the international financial institutions, or on a bilateral basis for credits or on GATT issues has been dispelled by the recent visit of the US trade representative to New Delhi THE biggest achievement of intense lobbying by India with the members of the so-called Aid India Consortium presided over by the World Bank, which finally met in Paris in September, has been claimed to be the sizeable pledge of what is euphemistically called 'fast-disbursing' aid in contrast to slow-moving project aid. What has been sought to be obfuscated by crude media management is that in the past too so-called 'fast-disbursing' aid has been offered and gratefully received by India, together with a good measure of rescheduling of debt servicing which is now being denied to India by the consortium. The nearly exclusive shift to project-tied credits, bilateral as well as institutional, during the 80s was part of a wider plan to push India into short-term commercial borrowing with all its adverse implications for India's balance of payments which surfaced in the closing stages of the 80s and more strongly in the last two years. With India now placed in a situation of helpless dependency, non-project, fast- disbursing credits have been revived but are still not the major part of the consortium's aid-package. The vulnerable position from which India is now negotiating for credits is emphasised by the fact that, of the fast-disbursing credits of $ 2.3 billion, $ 650 million had already been drawn and spent, largely to cover payments for import of petroleum products. The remaining $ 1.65 billion, which includes the World Bank's structural adjustment loan of S 600 million, will hardly cover the outstanding payment obligations. These credits will undoubtedly be spent by India at a fast pace.