The three month long militant agitation in Andhra Pradesh against the power sector reforms during June-August 2000 attracted the attention of even the captains of global capitalism. The President of the World Bank Wolfenson reacted significantly defending the reform process in Andhra Pradesh from his headquarters in Washington. The Microsoft chief Bill Gates enquired about this agitation during his deliberations with the State Chief Minister N. Chandra Babu Naidu in Delhi. Even the World Bank took serious note of this agitation, which is evident from its own literature.
“…….In the wake of power tariff increases in June, the opposition was able to turn what was initially scattered protests of leftist groups in to major and bloody demonstrations. Naidu has managed to ride out this storm, and remain in control of the party and state while remaining committed to the reform program. However, this episode has highlighted the potentially explosive politics of AP, the vulnerability to crises, and the political sensitivity of Naidu’s perceived close relationship with the Bank. Naidu’s popularity will be tested soon in the upcoming elections for rural local bodies (panchayats). These elections were originally scheduled to be held in October but the political fall out from the power reforms may have influenced Naidu to postpone them (source: Mr.James D. Wolfenson Visit to India (November 6-15, 2000) Briefing Book 3; World Bank office in India page 3 (AP))”.
The significance of this movement also stems from the fact that the World Bank has decided to rethink the manner in which its reforms’ package has to be sold to the people of Andhra Pradesh. This can be understood from the following:
“………India cannot afford to lose him (Naidu) as a champion of reform. But with the pressures he has faced in the past few months, there is a risk that his commitment to difficult reforms may, understandably, be wavering: there is talk for example of his postponing the power sector distribution privatization, and there are questions over whether another round of tariff increases by the electricity regulator will be allowed by the Government….. The increased focus on poverty is critical for AP both in terms of the interventions themselves, but also for reinforcing the message that reforms are not anti-poor, and that the Bank is in fact on the side of the poor” (Source: Ibid. Page 5)
With the backdrop of this massive agitation, the World Bank decided to fine tune its strategy and has now decided to sell them in AP in such a way that they are the programmes of state government, rather than that of an overseas dictator. This can be understood from the following abstract from the World Bank Document.
“The irony in AP is that despite strong ownership of reforms by key politicians and bureaucrats, the perceptions of the Bank driving the reform agenda has gained ground in public opinion. Learning from this experience the proposed adjustment operation takes as its starting point the govt’s own A.P. Vision 2020 document …(source: Ibid. page 4)
The World Bank dictated power sector reforms and the movement of people’s resistance are of course not unique to Andhra Pradesh. However the experience of Andhra Pradesh offers an illuminating case study of people’s movement against World Bank reforms.