Sonia Gandhi Declines Post as India’s Prime Minister

RAY SUAREZ:

For the second time in five days, the billion people of the world's largest democracy got a political surprise.

RAY SUAREZ:

First, the Congress Party led by Sonia Gandhi prevailed in an unexpected and stunning victory last week. And then today, Gandhi turned down the job of prime minister, bowing to pressures from Hindu nationalists who attacked her Italian birth.

SONIA GANDHI:

One thing has always been clear to me, and that is, as I have often stated, that the post of prime minister has not been my aim. I was always certain that, if ever I found myself in the position that I am in today, I would follow my inner voice. Today, that voice tells me I must humbly decline the post.

RAY SUAREZ:

Gandhi's Congress Party supporters in parliament protested loudly. She would have been the fourth prime minister of India from the Nehru-Gandhi dynasty. Her husband, Rajiv, and her mother-in-law, Indira, were both assassinated after tumultuous careers. Indira Gandhi's father, Jawaharlal Nehru, was India's first prime minister after it gained independence from Britain in 1947.

The Congress Party win knocked Prime Minster Atal Bihari Vajpayee and his Hindu nationalist party, BJP, out of power. His tenure was highlighted by a public effort to pursue peace with neighboring Pakistan and resolve the dispute over the contentious region of Kashmir.

Vajpayee ran for re-election on an "India Shining" campaign, arguing his free market economic reforms and encouragement of foreign investment had turned around the economy, bringing prosperity to millions of newly middle class Indians. But his opponents said hundreds of millions more rural and village poor had been left behind. And they voted in massive numbers for the Congress Party and its allies.

Concerns that a new and more leftist government might reverse the BJP's reforms helped set off a record drop on the Indian stock market yesterday. But today, the market soared as word emerged that former finance minister, Manmohan Singh, who is also a reformer, would likely be the next prime minister.

RAY SUAREZ:

For more, we get two views. Teresita Schaffer is a former deputy assistant secretary of state for South Asia. She's now director for South Asia studies at the Center for Strategic and International Studies. Sumit Ganguly is director of the India studies program at Indiana University. He's written widely on South Asia.

Well, today was the day when it was expected that Sonia Gandhi was going to announce her government. Instead, she announced she wasn't going to lead it. Teresita Schaffer, what happened?

TERESITA SCHAFFER:

I think she had second thoughts. I think she saw the very ugly situation that was developing with the BJP taking a very demagogic opposition to her ascending to the prime ministership, and she concluded that, with her background, she would probably be better off serving as a leader from outside the prime ministership for a party in this huge democracy of a billion people.

RAY SUAREZ:

Well, they had a multi-month election season, professor. Wasn't that issue dealt with? Wasn't there some expectation of how it was going to play if Congress won?

SUMIT GANGULY:

There was certainly some expectation because already the BJP had made it an issue, and they had alluded to her Italian origins, but probably Congress didn't realize how ugly it could become. And in the last few days, it had assumed a level of ugliness and a level of unpleasantness that one had not really anticipated, or Congress had not anticipated.

RAY SUAREZ:

Could it be that her chances weren't taken seriously, since Congress was trailing in the polls?

TERESITA SCHAFFER:

Well, I think that's very important. I don't think that she and the Congress actually expected to be able to form a government. They expected to improve their position in parliament, but they thought they had one more election to go before they were going to be in.

RAY SUAREZ:

So now they get to form a government, but without their leader at its head?

TERESITA SCHAFFER:

Well, now they get to form a government with a different leader as prime minister and with Sonia Gandhi undoubtedly playing a very important role in the parliament.

RAY SUAREZ:

Why did the BJP lose in the first place, professor? What do you think?

SUMIT GANGULY:

I think there are a number of different reasons why the BJP lost. In part, I think its campaign was directed at one segment of India's population which has benefited very significantly from India's economic reforms. There were these ten million messages that were sent out by electronic text to people's cell phones. But one has to bear in mind that that's only a very small segment of India's electorate, and this is not the electorate that actually votes in large numbers in India. And there's a real irony in India. It's the poor and the disenfranchised who have voted with much greater frequency in recent elections, rather than India's mostly complacent middle class. And the BJP's campaign, that India is shining, was largely directed at this burgeoning middle class. That's one factor.

I think the BJP also made a series of alliances in various parts of the country which proved to be infractuous. I think that was a second factor, and I think, thirdly, I think to some degree, there was a backlash against one of their more egregious acts, which was really this pogrom that took place in Gujarat, in a western state. And I think that rattled a certain segment of the electorate, and the BJP did little or nothing in terms of containing the violence that swept across this state about two years ago.

RAY SUAREZ:

Do you agree with this mostly about economics, or were there some aspects of the sectarian strife that played into this?

TERESITA SCHAFFER:

I think both of those were there, but I think there were some other factors that were important. First of all, looking at the coalition factor, Professor Ganguly spoke about the bad luck alliances that the BJP made, most of which, by the way, had been its allies in the previous elections. The real difference was that the Congress was much more effective in putting together allies.

There were also some local factors. The BJP's allies had done well in the previous election and had helped push that group over the top. This time they did very badly, and clearly dragged the BJP down. But when you look at the aggregates, both the Congress and the BJP actually lost vote-share this time. Congress went down from about 28 percent to about 26 percent of the total national vote. The BJP's share was a bit less. And interestingly enough, it is still true, as it was last time, that the biggest share of the votes as a group went to parties that are only represented in one state, so that the fragmentation of Indian politics is very much continuing in this election.

RAY SUAREZ:

Well, how will a coalition led by the Congress be different from a BJP government?

SUMIT GANGULY:

A coalition led by the Congress will be different in a number of different ways, both in terms of foreign and domestic policy. Let's start with domestic policy. In part, there will be, dependent upon the communists who have won 62 seats in parliament. The communists have not agreed to join the government, but as in a parliamentary system, they have agreed to support the government from what's called from the outside, meaning still within parliament but not formally as a member– as members of the ruling coalition. This actually will put a significant brake, or can put a significant brake, can act as a significant constraint on certain forms of economic liberalization, particularly the privatization of India's behemoth public sector, which was being aggressively pursued under the previous regime. At least initially, there will be some constraints on the divestment of the public sector. Secondly, I think a certain number of populist programs will be resurrected, which could have adverse consequences for the exchequer in the country.

In the realm of foreign policy, India will probably now once again return to an emphasis on multilateralism. It will probably start using the language of multi-polarity once again. And that's really a code word meaning that "we are opposed to over weaning American dominance in the world." So both in the realms of foreign and economic, and domestic policies, I think there will be subtle by important shifts.

RAY SUAREZ:

Well, there's no Soviet Union to be friendly with anymore, like old Congress Party governments in the past. How does a new Indian government look from the outside world?

TERESITA SCHAFFER:

Well, the guy who has been Sonia Gandhi's closest adviser on foreign affairs, and who may emerge as the foreign minister, said in a public statement last Sunday that the U.S. relationship was still vitally important to India and would be pursued by the new government, and I believe that.

The thing is that the Congress has been out of office for eight years, and a lot has happened during that time, so that the incoming team, particularly in relations with the United States, is going to have some adjusting to do because they've watched the last eight years as observers rather than as policymakers. They haven't had to make the real choices that this world imposes on them. So I think we're probably going to go through a slightly awkward few months in which everybody is on kind of a learning curve. I think ultimately relations with the United States are going to be important. I think the new government is going to have to think about where security relations, which has expanded greatly in the past five years, fit in the India-U.S. relationship; also how they deal with the multilateral economic issues– things like WTO and other aspects of trade policy– that were already a somewhat difficult issue under the BJP government and that looked like becoming a more difficult one. But when you look at economic policy, I think that established economic reform policies are not likely to be rolled back. For example, the Indian government has already moved to allow the private sector into the insurance industry, into the telecommunications industry, or at least some parts of it, and so on. That is going to continue.

The communist governments about whom everyone is so nervous have run state governments for years and have been running after foreign investment for their states. I don't think they're going to change that approach, so that what you have to worry about is really the impact on the fiscal situation, the impact on the budget deficit.

RAY SUAREZ:

And what about that very important relationship with Pakistan, professor?

SUMIT GANGULY:

The very important relationship with Pakistan, the initiatives that were undertaken under the BJP regime will probably continue– however, probably, with a lot less fanfare because Sonia Gandhi, being Italian born, even if she is not the prime minister, still being a significant member of the Congress parliamentary party, will become a lightning rod if significant concessions that were possible under the BJP regime can also be pursued by the Congress government, but with a greater degree of circumspection for the simple reason that the BJP, now in opposition, may criticize the Congress for things that they might themselves have done while in office themselves.

So initially I think there will be a bit of stock-taking and a degree of circumspection and caution on the part of the Congress in terms of making any kind of grand initiative towards Pakistan. But I don't think there is going to be a fundamental shift in policies that were being pursued in terms of trying to break the logjam with Pakistan, particularly on the very vexed issue of Kashmir.

RAY SUAREZ:

Guests, thank you both.

SUMIT GANGULY:

Thank you.