Another Swamy Exposé : Secrets Behind the 1991 US Aircraft Landing Deal!
Speaking on the subject “Responsible Capitalism” at the Kerala Management Association’s annual convention in Kochin, BJP’s senior leader Dr. Subramanian Swamy shared momentous details. The incident is from the year 1991, when he was the Law & Justice Minister in the then PM Chandrasekhar’s government.
Talking about the financial crisis that had emerged in the year 1991, Dr. Swamy said he had to make the jet-landing deal with the US to help India procure a loan of US$ 2Billion from the International Monetary Fund [IMF], an international cooperative credit organization.
Dr. Swamy said the decision to allow refuelling of US fighter jets on Indian soil during the first Gulf war was made when the US had agreed to help India secure a loan of US$2 Billion.
Hailing Rajiv Gandhi’s reform efforts in liberalizing India’s economy, Dr. Swamy recalled that during his tenure of 1984–89, Rajiv Gandhi had never suggested industrialists had to only receive long-term loans. In fact, industrialists had procured short-term loans; but, in the process, had turned defaulters within five years, plunging India into a financial crisis. During 1991, said Dr. Swamy, India had to face a serious financial crisis. This crisis was a result of the industrial bank credit policies adopted by previous governments.
The then Prime Minister Chandrasekhar had asked Swamy what they could do to resolve the crisis. Fortunately, the American ambassador had called on him to discuss some diplomatic issue. The US ambassador wanted to know if India was willing to help the US in their war on Iraq.
Swamy said: “By then, Iraq had occupied Kuwait. I asked ‘what kind of help you want.’ He said they wanted permission for the landing and refuelling of US warplanes which would fly in from the Philippines. And, they were ready to pay three times the fee paid for landing and refuelling commercial airliners.”
To the request of the US embassy, Dr. Swamy had replied “we will not alter our landing policies for peanuts.”
Swamy went on to narrate: “When the ambassador asked ‘what do you want’, I told him we want US$ 2 Billion as we were on the verge of an economic collapse. When he asked ‘Is this what you want from the US’, I replied No, we want it from the IMF and we want it without any conditions. Then, the ambassador asked ‘How can I get you a loan from the IMF.’ I said you have 87% voting rights at the IMF. If you want landing rights, I want US$ 2 billion by Monday.”
Swamy continued “Ambassador said today is already Friday. Then, I said it still is Thursday night in Washington.”
“So, they gave us US$ 2 Billion, and we changed our landing policy”, concluded Swamy.
The decision to change the aircraft landing policy was undoubtedly a first of its kind in India’s history!
7 Pieces of Pertinence:
- NYTimes article: Uproar over Refuelling and Swamy’s Public apology to the Parliament Speaker
- IMF paper on what caused India’s financial Crisis
- FinancialExpress Archives: How the IMF chivvied and cajoled India into economic liberalisation
- NYTimes article: How the once-self-reliant India sought aid
- DNAIndia.com’s independent coverage of the story
- Harvard Paper tracing the Genesis of India’s economic crisis of 1991
- Gaurav’s Blog: Stock market’s FPI-dependence from 1991