Was India (and other developing economies) ignored in Bretton Woods talks?

That is the general perception. However, Prof Eric Helleiner of University of Waterloo does not think so. He says India infact contributed quite a bit to the thinking on BW institutions.

This paper helps correct two common misconceptions about the origins of the Bretton Woods institutions. The first is that the negotiations were primarily an Anglo-American affair in which developing countries had little input. The second is that international development issues were largely ignored during the negotiations. This examination of India’s role in the origins of Bretton Woods shows that both assumptions are flawed. Understanding the history of the birth of the Bretton Woods institutions in a more accurate way provides a useful perspective for contemporary debates about their future.

For instance, Indian officials emphasised the role of development in these institutions. India was also looking forward to building its economy post WW-II. Then issues on exchange rate management, trade policy etc from a developing country perspective was added to the debate.

The paper also has an interesting discussion on the politics between British and Indians representing India in the talks. Indians were clear that the views should be expressed keeping Indian interest  in mind and not British. The Indians also asked for more Indian representation in the group which was granted by the Brits (whose position has anyways weakened considerably post WW-II).

Rather than neglecting development issues, the Bretton Woods architects pioneered the creation of a new kind of international financial order that 
was designed to be supportive of state-led industrialisation and development goals of poorer countries for the fi rst time. Five years before Truman called for technical and fi nancial assistance to address underdevelopment, the Bretton Woods architects outlined a much more ambitious template for international development that included the creation of the IBRD and support for policy space to enable poorer countries to pursue state-led development strategies.

These development aspirations embodied in the Bretton Woods agreements have been overlooked by much scholarship for a simple reason—they were largely abandoned by US policymakers after Roosevelt’s death in April 1945. This is not the place to analyse this dramatic shift in US foreign policy, but its impact was to make the “actually-existing” Bretton Woods system much less supportive of state-led development strategies than had initially been intended. That support was eroded further when the Bretton Woods institutions became leading advocates of neo-liberal policy advice later in the post-war period.

The current discussions to make developing world (still developing) in the new world financial order is nothing new really. They played a role in the past. History is repeating sorry rhyming well in the financial order talks as well:

Despite these transformations, the original intentions of the Bretton Woods architects deserve to be remembered, particularly today when emerging powers such as India, China, and Brazil are calling for a more development-friendly international fi nancial order. Those calls are often perceived as challenges to the Bretton Woods system. In fact, they are resurrecting its original goals. It is also worth recalling that those goals were ones that India, China, and Brazil helped to establish through their active participation in the Bretton Woods negotiations. The Bretton Woods negotiations are usually depicted as primarily an Anglo–American affair, but individuals from these countries—as well as many others—were deeply engaged in the process. Like Chinese and Brazilian participants,

Indians played a particularly interesting role in raising the profile of development issues in the discussions. That role deserves greater recognition not just because it helped to shape the fi nal Bretton Woods agreements. It also served to foreshadow the role that contemporary Indian policymakers and those from other emerging powers are playing today in debates about the future of the Bretton Woods institutions.

Superb stuff.

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