|MARGINAL NO MORE?
Will India's Hindu nationalist government walk a moderate line?
March 20, 1998
in this forum:
Other political parties claim to have religious roots, but are not called fundamentalists. Why the double standard? Why is the BJP support of a uniform civil law considered an anti-minority position? What is the significance of small, independent parties in this election? Will the BJP embrace multinational organizations? Is a there any reason for minorities to worry about a moderate BJP government? Question:
What is the BJP's economic policy? Will we see India embrace multinational organizations in the future or will there be an isolationist approach?
Professor Varshney responds:
The BJP's economic policy is caught between two contradictory forces: pragmatism and ideological purity. The moderates in the party would rather be pragmatic than be nationalistic on economic matters. For them, cultural nationalism is more important than economic nationalism. For the right-wing of the party, cultural and economic nationalism are two sides of the same coin. The right-wing does not dominate the actual functioning of the party any more. Hence one should not expect serious departures from the reform program initiated by the Congress party in 1991. In all probability, MNCs in consumer industries would be discouraged, but MNCs in power, roads, ports, telecom, computers, heavy and electrical machinery and chemicals would in fact be promoted. The new Finance, Commerce, Power and Industry ministers are all moderates, or non-BJP politicians. The choice of ministers for economic ministries has made it clear that the current government will not go for isolationism.
Professor Brass responds:
I am not clear about the BJP's economic policy and I think its leaders may not be clear about it either. Isolationism is not likely in the present state of the world economy. That would mean either a reversion to centralized economic planning or a complete collapse of the Indian economy. As in all its policies, the BJP stands for national pride, equality in relations with the great powers, and the right to determine the conditions for the entry and the types of multinational organizations that may operate inside India. That is the attitude at the higher levels of the BJP.
At the lower levels, much support comes to the BJP from indigenous, local businessmen, whose enterprises have been protected under the old highly regulated regime that prevented competition from abroad. Many of these enterprises would be unable to compete effectively in a truly open economy. So, the BJP has to look to its local support base as well as to its nationalist pride.
The latest news from India indicates that the BJP economic policies will focus particularly on rectifying some of the most egregious failures of the Indian state since Independence, such as raising the disgracefully low literacy rates in the country; providing clean, safe drinking water, which hardly exists anywhere in India and stands as another national disgrace after 50 years of so-called economic development; and other similar efforts to do something about providing for what is called in India "the basic minimum needs of the people." Let's see what they do about such things in practice.
Professor Embree responds:The BJP's economic policy is very far from clear. Early on, when it was struggling to find an image, it attacked the socialist policies of the Indian National Congress and the pervasive corruption of the people around Indira Gandhi, and then around her family, Sanjay, Rajiv, and now Sonia. The shift of the Congress to economic liberalization forced them to restate some of their aims. One of the clearest examples of the thinking of the BJP leaders on economic polices was given in a meeting in 1993, after the government's liberalization policies were announced, between leaders of the Confederation on Indian Industry, the leading business organizations, and leaders of the BJP. Contrary to reports in the American press, Indian businesses are far from being enthusiastically in favor of liberalization, globalization, and the free entry into all sectors of the Indian economy by multinational companies. The BJP leaders insisted in 1993 that there was no question of the BJP changing the direction of dismantling the socialist state and the regulation of the economy; this, they insisted, was what they had been urging for decades. But the BJP leaders made clear then, and ever since, that while they approve of foreign investment in certain sectors of the economy, such as transportation and power, they do not want foreign investment that will be given special treatment or that will compete unfairly with Indian interests. Their favorite expression is that they will insist on Indian businessmen having "a level playing field." Nor do they want investment in consumer goods that will weaken what is regarded as the Indian way of life. Above all, then there would be no lessening of the BJP's commitment to swadeshi that is, an emphasis on the production and use of goods made in India, The BJP is largely financed and supported by Indian businessmen, and it will move very cautiously before antagonizing them or going against there perceived interests. I think it would be an exaggeration to say that the BJP will embrace multinationals, for they know that there is deep, perhaps irrational dislike of multinationals in India; they are aware that is was a multinational company, the British East India Company, that took over the government of India at the end of the 18th century. Another point that is worth keeping in mind is that multinationals are seen as the symbols of Americanization; fast foods beauty pageants, rock music. And anti-Americanism, anti-westernization, and anti globalization are a somewhat submerged but real aspect of the BJP's global agenda.
But to the broader question: will the BJP be anti-foreign investment? Almost certainly not overtly, but there will be very likely less enthusiastic embrace of foreign businessmen, especially American ones, than there was in the mid-1940's, The activity of Enron in 1994, with its combination of arrogance and ignorance, was a godsend to the BJP then, allowing it to take a stance in protecting Indian interests against an American company. One prominent member of the BJP, George Fernandes, is famous for his criticism of foreign companies and foreign investment coming into India, and while he may not have a position of great power, he undoubtedly represents the sentiments of many Indians. It is not so much that India will become isolationist - but that it will seem unattractive to foreign investors.