India - The Next Economic Superpower: The 90s & Today

In 1991, the collapse of the Soviet Union led to significant economic challenges for India, including a loss of trade and industrial support. Facing a potential default on its debt, India sought a $1.8 billion bailout from the International Monetary Fund (IMF). The IMF agreed to the loan on the condition that India deregulate and open its economy. This led to significant economic reforms, including privatization and relaxed trade policies, resulting in rapid economic growth. India's economy has since doubled in size every five years, a growth rate comparable to China and Japan. These changes reflect a broader trend of economic transformation in many Eastern European and Southeast Asian countries.

What major event in 1991 significantly affected India's economy?

• The collapse of the Soviet Union

• The rise of oil prices

• The introduction of new trade policies

• The privatization of industries

Why did India seek assistance from the International Monetary Fund in 1991?

• To promote global trade

• To avoid defaulting on its debt

• To strengthen its protectionist policies

• To increase oil production

What was one of the conditions India had to meet to receive the IMF loan?

• Increase state-run enterprises

• Implement protectionist policies

• Deregulate and open up its economy

• Reduce global trade

What significant change occurred in India's economy after the IMF agreement?

• A return to protectionist policies

• A decrease in foreign investments

• A decline in industrial growth

• An explosion in economic growth

Which countries are mentioned as having similar economic growth rates to India post-1991?

• Germany and France

• South Korea and Vietnam

• China and Japan

• Brazil and Russia