Liberalization – Certain Maladies and Strategies for Development:

THIS IS PAPER PRESENTED IN THE CONFERENCE ON “ THE CHANGE OF MINDSET FOR THE ECONOMIC DEVELOPMENT: THE ROLE OF MANAGEMENT EDUCATION” HELD AT C.B.I.T., HYDERABAD IN 2002.

Liberalization – Certain Maladies and Strategies for Development:
K.J. Sarma, CBIT, Hyderabad & V.L. Rammohan, UCW (OU), Hyderabad

ABSTRACT:
This article is written with an anxiety and frustration out of the slow progress in various sectors in India compared to other developed countries. The authors have tried to understand the contributions and suggestions of Dreze & Sen (1996). The authors feel that the mind set is related to commitment, sincerity, transparency, moderate selfishness, with an unbiased productive outlook on the part of politicians, bureaucrats, political escapists, autocratic leaders and executives in government. There is a need to evolve strategies (with milestones), with accountability at every stage of micro planning and SWOT analysis at every stage of macro planning.

Mind set is related to commitment , sincerity, transferencey,moderate selfishness, with n unbiased productive outlook on the part of the people in various fields of the society. There is a need to evolve strategies ( with milestones ), with accountability at every stage
1. Introduction :
As time advances, peoples’ preferences, country’s economy may undergo several structural changes in the system. The disturbances (both internal and external) may be because of un-controlled, un-steady growth and the systems are forced to satisfy the individuals demands. Liberalization (at micro and macro levels) is one measure, which may bring greater supplies. Even this has several merits and demerits. In the layman’s language liberalization is some sort of license to manufacture and market goods, skills and services approved without any conditions (license-raj).

The aim of this article is to examine the situation, highlight necessity for liberalization, analyze the disadvantages accrueing to the most disadvantaged and suggest procedures for survival / growth. It may be understood that at times reference is to the constraints and opportunities w.r.t. India.

Dreze and Sen reminds Nehru’s suggestion and determination of the then govt. “of ending of poverty, ignorance, disease and inequality of opportunity”. We have to go long way to achieve a total achievement, evenly spread development related to Nehru’s aspiration. More specifically,

1. The rate of adult literacy and basic education (elementary) for India is low not even when compared with average literacy rate of 55%, for all low income economies, even when compared to other developing countries.
2. Life expectancy in India is quite unfavorable when compared to China.

India has much to learn from other developing countries leaving aside developed; in respect of certain aspects economic reforms related to trade, deregulation, privatization, education (widespread literacy), health services social security, land reforms, gender relations and some social goals concerning public action

The absence of social opportunities and public policy and comfortable functioning of markets due to illiteracy, ill health, lack of economic opportunities crazy bureaucratic control, lack of access to finance are some of the impediments to progress. A substantially broader view on promoting markets and competition (during liberalization) is necessary.

Economic development by expanding opportunities for individual in the society has not been sincerely thought of. Expansion of effective freedom and opportunity (intrinsic importance of opportunities) to individuals objectives with several ill conceived notions has not been thought of. A broader thinking with a national spirit on the part of the heads of the organization remains.

Dreze and Sen suggests that there is a dire necessity of instrumental reasoning with a view of economic development pertaining to educational facilities, total health care provisions, social security issues, environmental hygiene, democratic functions etc..

The over activity or under activity in the governance is also responsible for failures. In brief it would have been better to expand social opportunities totally and implement actions of liberalization strategically. The major impediment in India may be due to lack of concern and commitment to productivity. Public does not realize responsibility (at large) in contributing and lacks initiative, drive, commitment to ethical principals and values.


2. Impact of liberalization on market economies:
It may be better to understand (the modus operandi), haphazard, unsystematic functioning of governments, markets, market complimentary interventions and suggest a broadening of focus. Certain obvious points being:
1. What a government can do, depends on the nature of that government.
2. Also some leaders who are tyrannical and barbaric in their dealings, (in both world context and also in India).
3. Faith in goodness and governance by good people are of-course debatable.
4. Governments, which are unresponsive to the needs and values of population at large.

These points lead to some questions related to the nature of actual Govt. in office / ruling Govt. on one side. On the other side some of the questions are related to market; as market mechanisms influence ideas and attitudes which are to be closely observed evaluated and evolve decisions. The questions being

a. What kinds of markets are effective and efficient in bringing equilibrium.
b. Few treacherous operators of markets cornering with short supply, (shortages cause suffering and night mares) who make profits from the miseries of millions of people.
c. In certain cases the operators causing misjudgment , misguiding speculations resulting in chaos

The success of markets can have deep influence leading to inter dependency of markets and Govts. as
1. Markets cannot function smoothly if there is no legal backing of contracts and rights,
2. Initiating and facilitating market related economic growth, which was concluded after studying capitalist countries even, would pay.
3. Responsibility of fixing the initial distribution of resources depends on the agency of the Govt. This is a consequence of fundamental theorems of welfare economies related to Pareto efficient allocation of resources for competitive equilibrium
4. Govt. agreeing for a social arrangement for citizens exchanging commodities, services on their own initiative.

This inter dependence of markets and Govt. can be understood clearly only when we distinguish between market excluding and market complimentary Govt. interventions.

It is necessary to distinguish negative and positive liberties. The positive liberty supported by supportive influences actually help individuals to execute what she wants to do, where as the negative liberty can be identified when the market is prevented from doing certain things .

Thus a recapitulation of Govts. duties and those of citizens is necessary, to evolve a positive focus. Out law monopolistic arrangements. Work towards constructive efforts of citizens by arranging public education, redistributing land, protecting legal rights of disadvantaged groups.

Further liberalization and deregulation must lead to removing counter productive nature of the negative operations of Govt. and opposing the reforms by negative governmental functions.


To evolve a sound strategy during the process there is a need for debate on issues related to
1. Current policies.
2. Importance of positive functions like public education, health services and social security
3. Pros and Cons of negative roles of Govt.
4. How to broaden the positive focus which accrues more benefits to the socially disadvantaged.



3. Maladies of liberalization process
To take stock of maladies of liberalization we need to circumvent the public action, social inequality, economic and social reforms. What Govt. do can be deeply influenced by pressures of the public; as potentially extensive reach of public action is responsible for economic development and in creating social opportunities. In this connection Sen states that “actions of the public can be of profound significance to the success and failures of economic and social change in general and to the developmental efforts in particular”.

A single head man (chosen or elected) acting as an all purpose intermediary between the local community and state , who often uses his position to further his personal interests much more, than to pursue any social goal (in fact 2/3rds of head men in India are notorious); because of the absence of effective political organization of disadvantaged groups. This is due to the weaknesses of local democracy and deep social inequality.

In fact public participation has intrinsic value for the quality of life too and is an asset for many social moments related to deprived lives. Some of the inadequacies of local Govt. are:

a. The weakness relating to centralization at village level of democratic institutions could not be eliminated since independence.
b. The vigorous practice of democracy could not be done due to illiteracy, and subsequent ignorance about the working of bureaucracy, rights and quality of decentralization and state level politics .
c. Dominations of few upper class leaders in obstructing the literacy at village level.

These inadequacies could not be totally reformed even by legislations in India. It seems reasonable to think of certain training programs of social change to bring a proliferation of bureaucracy and improve the local democracy; along with expansion of public initiatives and social moments for more wide spread literacy.

While the elimination of ignorance, illiteracy, inequalities in opportunities pave way for the growth process, and are more participatory in nature, yet they may over shadow the importance of capabilities and effective freedom of both individuals and organisations.


4. Benefits of liberalization and strategies
Literacy is a basic tool for social interaction. In fact it is a catalyst for social change. The spread of education helps to over-come the traditional inequalities of caste, class and gender. Comparatively little progress has been made in eradicating these inequalities. Of course lack of attention to education is not completely confined to Govt. A firm commitment to the wide spread of equitable provisions of basic education is the first requisite of rapid progress in eradicating the social deprivation.

There have been several short comings of Govt. policy and activity in respect of basic education. The lower educational achievements also owe to:
1. Diverse kinds of inconsistencies in the recorded data.
2. Confusion of objectives and policies,.
3. The inadequacy of expenditure, mismanagement and lack of accountability of the establishments in several areas,
4. The absence of serious debate on compulsory education and
5. The neglect of female education and training for sustained development.

In fact the primary education suffered a neglect due to political clout. The social value of basic education also has been neglected by bureaucrats.

The present distressing state of economy is also due to gender inequality, which has been one of the impediments for social and economic progress. It should be realized that a team work (women’s agencies) would make an effective contribution. Certain aspects related to women (like child survival, security, fertility, mortality) are unevenly spread over the states in India. There has been a comprehensive subordination of women.

In short various forms of failures in India are due to extraordinary high levels of gender inequality and female deprivation. It should be realized that this high order inequality may be due to long run negative factors. Thus it should be realized that emancipation of women is a integral part of social progress in India and is not of women only.

Concluding remarks:
Sri Aurobindo (1997) asserts -- “The logic of life enables the society, at last to perfect consciously by means of the state, the whole organisation of its life, military, political, administrative, economy, social and cultural. The importance of democracy and socialism lies in the completeness of the development by which the state and society becomes. Modern democracy and modern socialism are crude and bungling attempts at consummation and inefficient intelligent realization”. Further he says that there is a need for fixed legislation and execution to obtain conscious selection and shaping of strategies for development.

It should be realized that any policy would work and yield results over a span of time (over certain horizon). In some fashion liberalization and related policies in India have just begun, but all sectors of economy and all aspects of liberalization are not well thought off. Infact there is a need for stronger brainstorming.

There is a need to have debates on economy policy with broader view of social opportunity to see that the progress is total and evenly spread for the best results. There is a necessity for balanced role of Governmental activity and public action through NGO’s.

The Govt. activities are needed for
1. Comprehensive policy,
2. Basic education for all &
3. Wide spread programs of health and so on.

The main focus is to remove counter productive regulations along with positive activities with national spirit. In order to involve public there is a strong need to encourage, reorient public discussions and criticism on the social and economic reprivations which are limiting actual prospects of participatory economic expansion.

So the management education in general and management institutions in particular should address these issues may be in the form of curriculum , or as a specialization. Without integrating these economic and social issues, prospective managers may not become a full fledged decision makers in the organizations in the well being of the society.

References
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