The Planning Commission controversy

Written by Subhash Agrawal | Updated: Oct 7 2004, 05:30am hrs
The controversy over the induction of foreign consultants, economists and sundry other policy types into various committees of the Planning Commission was one of the most needless and exaggerated debates in recent times. Of course, a cross-fertilisation of ideas and inputs is very healthy, but on the other hand it would be naive to think that international agencies and multinational consulting firms do not carry biases or even agendas. These are usually well hidden under a mouthful of slick jargon and earnest presentations, which without necessarily being sinister may not conform to the larger public good. Just like our domestic firms and industry chambers have theirs.

Thus, this is no reason alone to shun them and to deny ourselves of what might be valuable experiences and stories from around the world, just as their hyped pedigree is no reason alone to pick them automatically. Also, it matters very little if the process is informal, formal or somewhere in-between. If the Planning Commission wants to become relevant, much more than a parking slot for out-of-favour bureaucrats or waiting-to-join-IMF economists, then the trick is to tap a wide range of people and institutions for thoughts and perspectives. And in not taking them too seriously in the first place.

It is rather amazing how in India we still treat so-called experts with veneration, despite the lessons we should have learnt from the Enron fiasco (consulting and auditing firms like Mckinsey and Arthur Anderson provided the credibility and gushing press reviews to what was clearly such a huge scam). Just in case some readers are not aware, here are some notable instances where experts have been proven wrong:

The Institute for Public Accuracy, a Washington-based think-tank, has put out an interesting research article called Harvards Best and Brightest Aided Russias Economic Ruin. This article shows how the Harvard Institute for International Developments Russia project (HIID), which played a major role in Russian reforms and advised the Russian government on privatisation, unwittingly facilitated wealth confiscation rather than wealth creation. Russian privatisation, which had substantial input from HIID economists, has fostered the concentration of property in a few and very dubious Russian hands. More than that, many HIID economists were subsequently found to have used their positions and inside knowledge to profit from investments in Russia.

If the Commission wants to be relevant, it should tap a wider range of people
Its amazing how we still treat so-called experts with veneration
Remember those crazy and la-la dotcom and IT days of the last decade At its height, the Clinton-Gore administration sanctioned expenditures of billions of dollars on technology and computers in primary schools. Why Because at that time there were many academic studies, later revealed to have been funded generously by Microsoft, Intel and Compaq, that showed how use of computers in schools was essential to building a competitive nation. The press was bombarded with seductive stories of the new knowledge economy. It now turns out that, as in fact many have always known or suspected, there are serious developmental risks posed by overload of computers in childhood. Kids need creative play and outdoor experiences far more than sitting in front of a monitor. In fact, some recent studies even suggest there be a moratorium on use of computers in elementary education.

For those who think that global consulting firms know best, here is an interesting query: What is common between Southland Corporation (the ex-owner of 7-11 stores), Swissair and Sears One, these were highly successful businesses once that later filed for bankruptcy. Second, their demise was brought on by radical changes suggested by Mckinsey.

And of course, this gem from the head of Decca Recording Company when they rejected the Beatles in 1962...We dont like their sound, and guitar music is on the way out. That was one costly misjudgement.

These are just a few of the thousands of examples out there, both in India and abroad. The clear lesson here is that experts are often wrong, and sometimes big time, even though they go around pretending otherwise. Yes, by all means India should have a genuinely dynamic and wide policy debate and this debate should include many voices, but the country also needs to develop a healthy disrespect for either public claims or the printed word or sophisticated mannerisms.

The author is editor of India Focus