The poor and the powerful

The poor of India have swept their powerful rulers out of office and brought back to power the National Congress which had been in the political wildness for the last nine years. The elections results were a total surprise to the BJP-led alliance and even the Congress itself which was not expecting to be called back to office any time soon.

The election results were certainly a surprise to former prime minister Atal Behari Vajpayee. Vajpayee was so confident of being returned to power for the second time that he called the general elections much ahead of the schedule.

The former PM was confident of economic growth at eight per cent this year, and the possibilities of a ten per cent growth within a couple of years. He thought that the people would be happy to vote for his government and his leadership and would return him with a larger legislative strength than before.

But the people willed otherwise and voted for the Congress and its leader Sonia Gandhi despite her Italian origin, a point that infuriates the ultra rightists among the Hindus.

The Congress party, however, has not been able to win a simple majority in the Lower House of 545 members and has had to depend on 19 other parties, including two communist parties with 61 seats. At the same time, this may still be better than the coalition of 23 parties on which Vajpayee had to depend for the last four and a half years.

Gone with Vajpayee is now the symbol and slogan of "India Shining" and Vajpayee's own plan of India becoming an economic superpower soon, sustaining itself on the back of a high economic growth path.

That shine was the lustre of five per cent ultra rich Indians who profited by its sectoral economic boom and flourishing IT industry. But the Congress listened to the voices of the poor and the groans of the unemployed and won.

The state of Andhra Pradesh, to which President Clinton and Bill Gates, Chairman of the Microsoft Corporation, trooped in to meet its chief minister Chandrababu Naidu, was the most upsetting part of the whole electoral story.

The greatly admired Naidu, who called himself the chief executive officer of the state, lost the provincial assembly elections. The Congress party won 215 seats while his Telegu Desam Party got just 48 seats.

Under Naidu's administration, Hyderabad came to be known as Cyberabad. Though the son of a farmer, he cut food and power subsidies heavily along with the stifling red tape.

However, India's growth rate of eight per cent had little meaning for the 80 million people of Andhra Pradesh as food prices shot up and many of them were starving after four years of drought.

Over 2,000 debt-ridden farmers had killed themselves around the town of Anantapour since 1997. On the one hand, Microsoft Corporation had its only software development centre outside the US in Andhra Pradesh.

On the other, agriculture which contributed to 26 per cent of the GDP of the state in 1994, came down to 13 per cent a decade later. The Congress accuses Naidu of ignoring 95 per cent of the poor people of the state and focussing on the five per cent rich.

If that is all Telegu Desam Party has to show after nine years in office, the exit was written on the wall. Despite the admiration of Clinton, Bill Gates and the President of the World Bank James Wolfenson, Naidu was unable to deliver where it mattered the most.

We have similar problems in Pakistan, though they may not be as acute as they are in India. But a solution cannot come through the electoral system. The voters here influenced by the feudal lords or tribal chiefs or religious preachers.

The voting is too much based on caste, sect, community. Women usually vote as directed by their husbands or parents. In the rural areas, the ballot boxes are often stuffed and election results are tampered with. How the results of the referendum are manipulated is also well known.

We have a large number of women in the assemblies, who too are relations of feudal lords or religious leaders. They seldom add to the intellectual strength of the assemblies or enhance their level of integrity. Compared to that, the Indian leadership has largely been middle class. If there has been feudal lords they are small compared to our mighty feudal super-rich.

Some of the Indian leaders got carried away by their own success. While Vajpayee spoke of India becoming an economic super-power soon, some spoke of this as the Indian decade, while a few others declared this as the Indian Century.

The Economist of London which carried a cover-page report on India's "shining hopes" said that there was a flip side to that shine and that was "in little investment, too big a deficit, and too few jobs."

The deficit of the central and provincial governments and public sector business after rising over nine per cent of the GDP for long touched 10 per cent in 2002 and has now come down to nine per cent which is indeed very high.

But the deficit cannot come down substantially unless the varied state subsidies come down. And that may be difficult when the two communist parties are coalition partners of the Congress which are opposed to adding to the hardships of the people, particularly of the poorest.

Of the two Communist parties, the Communist Party of India (Marxist) is opposed to privatisation and instead wants a commission to restructure the public sector. And that may not be easy when the public sector units can't shed their large number of workers.

The Communists are also opposed to privatization which the BJP government initiated. But the Congress Party says privatization should be resorted to where it is in the interest of the country.

That can be a greatly debated issue judging by what is perceived as the good of the country. But one way out could be giving shares to the workers of the privatized companies. But the new owners have to agree to that and not lower the purchase price prices too steeply if the workers are associated with the management.

Foreign investment which has been very low in India has picked up. But the association of the communist parties with the Congress government seem to dampen their ardour for large scale investment. Anyway they will wait and seen the evolution of the economic policy of the new government and its minimum common programme.

Share prices in India have taken a heavy beating following the electoral victory of the Congress and its association with the communist parties who have a total of 61 members in the 545 Lok Sabha.

Last Friday alone, the Bombay Exchanges Sensex dropped by 330 points or 6.1 per cent of the Index. So far the market capitalisation of the Bombay Exchange has been lost by 10 per cent of which on Friday it lost 22 billion dollars and on Monday it lost 11.1 per cent.

But as long as reform minded leaders like Dr Manmohan Singh, who initiated the economic reforms in India, and Chidambaran, former finance minister, have a say in policy making, in the new government extremist courses will be avoided.

As far as economic cooperation with Pakistan is concerned, that will continue and expand. The SAARC Free Trade Area will become a reality, though rather slowly. Businessmen and industrialists on both sides are expanding their cooperation and even moving towards joint ventures.

External factors are compelling India and Pakistan to cooperate economically. A revolution in the textile trade is to come following the end of the quota system by the end of the year.

Pakistan needs cheaper textile machinery and India is a major source for that, throughout for the latest machinery. The WTO commissions also make it necessary for India and Pakistan to cooperate increasingly.

Pakistan's industry is resilient enough to withstand competition from India after the initial hiccups and we have little to fear from trading with India on a large scale.

This is the era of free markets and not more rigid protection which can be counter-productive. What we seek to do legally may be undone by the smugglers and overseas Pakistanis brining in a variety of over-taxed goods. tax-free.

The extent of economic cooperation may depend on the extent to which the leaders achieve success in solving the political issues or establish clear road-maps for solving them. There should be progress in the political sphere if the economic cooperation is to gain greater momentum. At least there should be earnest attempts in that direction.

Amartya Sen, India's Nobel prize-winning economist, has been saying that political freedoms for the people have little meaning or relevance if the people are hungry, unemployed and ailing. But one freedom at least the people of India have used judiciously is their ability to vote in and vote out leaders.

A recent World Bank report says that South Asia is a region of 1.4 billion people but also home to 40 per cent of the world's poor. Over the past decade, countries have achieved sustaining levels of GDP growth and have made progress in both economic reforms and social development. However measures of human well being in South Asia remain a profound challenge.

"The region has the highest illiteracy rate at 45 per cent and one third of the world's maternal deaths occur here. Nearly half the children under the age of five are malnourished and environmental degradation, inadequate infrastructure and social exclusion are among the obstacles to human development, "says the report.

South Asian leaders will be extremely unwise to perpetuate such a sad state of affairs by not cooperating with each other and solving their problems. The people of India and Pakistan have demonstrated they want peace and mutual cooperation. The people of India have shown they want a government which can solve their problems and deliver what they promise.