Indian Elections

Recently I wrote about India as an emerging economic giant whose success has been overshadowed by China’s re-entry into the global economy and its World Trade Organisation membership.

Now the Indian Prime Minister, Atal Bihari Vajpayee has called an early election. Finance Minister Singh has released a mini budget that cut a furthering US$2.3 billion in tariffs on the import of cars, computers and other goods, after an earlier reduction in non-farm tariffs from 25% to 20%.

What’s new here is that at last a Government in India is campaigning on the need to open their economy and question the Gandhian philosophy of self-reliance. Poor old India: 300 years of British imperialism and 50 years of the London School of Economics. I don’t know which did the most damage.

The ruling Bharatiya Janata Party (BJP) has in the past played the nationalist cultural and economic card and has governed in an unwieldy coalition of 20 parties. But running on a platform of economic development and good governance, it won three of the four state elections held late last year. For the modern BJP, it is now about becoming internationally competitive, attracting investment and new technology from the best in the world. As a result, the economy is set to grow by 7% this year. Even the weather has been kind to the ruling party, with a good monsoon lifting both farmer’s incomes and national spirits.

Meanwhile, the former ‘natural’ party of government, the Congress Party, is struggling. The non-secular Congress Party was formed a the time of independence by Nehru, inspired by the spiritual patronage of Mahatma Gandhi. Today, led by Italian-born Sonia Gandhi, the Congress Party is finding that the BJP, which now rejects appeals to Hindu religious fundamentalism and embraces economic development, is a formidable foe.

Prime Minister Vajpayee was first elected to India’s Lok Sabha, the lower house, in 1957. Before the last election, he fanned anti-Pakistan sentiment by aggressively testing nuclear weapons, provoking jubiliant crowds to march in the street in support of the Government. Today, Vajpayee has recast himself as a statesman on economic, cultural and foreign policy, and as the leader best suited to bringing peace to Kashmir. Twice in 2002, India and Pakistan came close to war over the troubled province, but two years later, according to the Financial Times, it has become fashionable to say that only a Hindu fundamentalist and a Pakistani general can deliver peace.

General Musharraf is credited with killing an earlier peace process when he was Army Chief, but as President, he has promised to surrender his uniform and pursue peace negotiations with his Indian counterpart over Kashmir. This has not come without costs – there have been several assassination attempts. Both Vajpayee and Musharraf have angered the fundamentalists and extreme nationalists who were their earlier supporters. It is a remarkable turn of events that these two leaders now offer the best chance for peace in the sub-continent.
Central to the success of both countries will be ongoing economic reforms that offer hope and prosperity.

That’s another reason why it’s important to conclude the Doha Development trade round. The textile agreement, lower tariffs and more open markets in rich countries will see more jobs and investment in India and Pakistan. It’s already happening in the service sector, as I explained in an earlier article. Five years ago, IT professionals numbered 180,000. Today, there are over 650,000 – a number set to double in only 30 months.

Trade, communications, road, rail and air routes are beginning to open between India and Pakistan.

It’s no historic coincidence that the most oppressive and dangerous societies and nations are those that are protectionist, inward-looking and see neighbours as threats rather than partners or customers.

In India and Pakistan, the challenge for leaders is to fully engage with each other, and with a world that welcomes their products and see their growing, educated middle class as customers, not threats. If they meet that challenge, something profound may well happen in that troubled and tortured sub-continent.
It was an extreme Muslim who murdered Anwar Sadat, a radical Zionist who took the life of Prime Minister Rabin. Vajyappe and Musharraf will be acutely aware that the peacemakers are not always blessed. But, still, where there was once only despair, now there is hope.