Is a Congress Party win good for global commerce?

Now that we know that the Congress have won the general election with a comfortable margin, which allows them to be that little bit more confident in their agenda setting, the question that I’ve been most asked is whether a Congress victory is good for the international business.

If what a business leader most wants is stability, then I believe that the people have delivered a much more stable government than the last, which was run on the whim of the Communist Comrades of West Bengal.

We must also take some comfort in the fact that senior Ministers like Chidambaram and Kamal Nath have made statements that recognise that the reforms process must move forward – whether this is to do with labour reform or increasing FDI in various industry sectors. The latter is what I’d like to examine further.

Its proven that in sectors such as IT, biotech or telecom – which are ‘open’ to foreign equity and participation, we’ve seen huge growth – some commentators estimate around 40% growth year on year. Whereas in ‘closed’ sectors such as retail, legal services or accountancy, you’ve only seen single digit growth. The argument being that the more ‘open’ India becomes, the greater the chances of her becoming more competitive and successful.

Chidambaram has commented on the inadequate level of life insurance cover in India as being “totally pathetic”, and also often stated the need to bring reforms to the banking sector, does this mean that we should expect the reforms required to ensure that the Indian consumer gets more value for their money?

Well, without the Communists holding a gun to their heads, it seems that the Congress Party has a range of options to pursue to take the globalisation agenda forward. The international community expects it, and to be honest, I’m not sure the Indian Government will have any plausible excuses to defer critical economic reforms or on delivering on Doha much longer.

Who's going to be the next Indian PM?

With India on the verge of general elections, I thought it may be useful to look into my crystal ball to find out who may become India’s next Prime Minister. In most democracies, elections come down to a couple of major political parties, but, as with everything in India, it’s not as straight forward as that (what a surprise!).

As a result of coalition politics firmly embedded in India, we not only have to keep our eyes on the national parties, but also on regional outfits that can return spectacularly low numbers of MPs to New Delhi but hold the sway of power.

So, who’re the main contenders:

Representing the grand old party of India, the current Prime Minister – Dr Singh – has just had heart by-pass surgery – but hopes lead the next election campaign, seems unlikely to me. There are two other options for the Congress – ‘Madam Sonia’, or her son – Rahul Gandhi – who’s an unknown & untested entity, but given the Congress Party’s adulation for the Gandhi family, I wouldn’t be surprised if either name came to the fore after the election.

India likes nothing more than someone who’s made a sacrifice – think about Buddha, Ashoka, Mahatma Gandhi and other illustrious persons, to which you can add Sonia Gandhi’s name. For she, sacrificed the position of PM last time around (on the issue of her Italian origin) to install Manmohan Singh as PM and win over a new fan base and acceptability.

India knows Mr Advani very well. He’s been around for half a century or so and until the last election played an effective no2 to Mr Vajpayee, who’s since bowed out of politics. Being the numero uno, he’s finally the contender, but it seems the Obama effect has resulted in his chances being drastically reduced. A lot of people I speak to all say they want someone younger (Obama effect) to lead the BJP.

With the increasing acceptability of Narendra Modi, it seems the pressure on Mr Advani is that much greater. It’s lucky for him that he’s already been nominated as their Prime Ministerial candidate! I witnessed the tension just a few weeks ago when I attended the Vibrant Gujarat Investors Summit and on the following day, read in the newspapers the furore his success has caused within party ranks. After all, it’s not often that a politican receives the backing of India’s biggest businesses in such a visible manner. At the risk of saying something obvious, I have no doubt that Mr Modi will ascend to the national stage after the next election, however I don’t think he’ll take the post of Home Minister if the BJP win.

In my view, any one of these could determine the next election, if not become the next PM. Mayawati’s increasing reach is unnerving everyone. She’s the Chief Minister for Uttar Pradesh, which returns the largest number of MPs and as she’s ruling, her chances of success are huge.

Prakash Karat’s monumental miscalculation of withdrawing its support to the Congress over the US – India Nucelar Deal has provided Amar Singh’s Samajwadi Party a huge advantage in the run-up to the polls. The Communists haven’t been able to extend their reach outside West Bengal & Kerala, but enjoy huge loyalty in these two states.

The Samajwadi Party lead by Amar Singh, as always, could upset Mayawati’s coronation. You can expect the unexpected when it comes to these two. Amar Singh, after years of hurling abuse at the Congress, decided to jump into bed with them and extend unconditional support to the Congress.

The Maratha vote, lead by Sharad Pawar, who’s NCP is a current coalition partner could also emerge as a victor. A former Congress leader, he split and formed his party focusing on his home state of Maharashtra. With charismatic operators like Praful Patel, I wouldn’t rule him out of the running. Of course, as President of the cricketing board, he’s used to taking on heavy weights in battle.

Elections in any country are interesting to watch. In India, you’re assured a fantastic contest in which a billion people make their way to the polling booths to cast their votes electronically over a six week period. India’s faith in democracy, itself, is worthy of celebration.

As for my crystal ball, it tells me that despite Congress winning the most seats, it see someone like Mayawati at the helm for a couple of years.

Manmohan Singh & The Civil Nuclear Deal

Any visitor to our planet who hadn’t been prejudiced by the cliched images in the media and school lessons on imperial history, would look at India’s landmass, population, economic status and automatically assume that it was a key player on the world’s stage. Well, now it is and we must applaud Manmohan Singh for his conviction and follow through on this policy.

Prime Ministers are, mostly, known for one thing during their premiership – whether its Blair, Vajpayee or Clinton, but it seems that Manmohan Singh has bucked this trend and emerged as a leader with two significant achievements to his credit.

Firstly, the liberalisation of the Indian economy (with all its benefits) and secondly, to gain the confidence of the Nuclear Suppliers Group (NSG) to allow India to participate in nuclear trade (which may bring India closer to energy independence).

The first time I met Manmohan Singh was when the Congress were in Opposition. I walked away with a regard for his intellect and for his personality, that makes him the erudite gentleman that he is. My second meeting reinforced the image that the media had created of him as ‘an accidental politician’.

In my view, the fact that the Indian lobby has arm twisted the NSG to put aside its rules, carefully developed over 40 years, to the benefit of India, and India alone is a significant victory, not only for Manmohan Singh, but for the Indian establishment. The greater victory is that the NSG have agreed to do this at a time when issues related to the transfer of high technology are being tightened and also when non-proliferation has become ‘the’ issue concerning geo-politics today.

Given the US’s need to bring some balance to South Asia by countering Pakistan, I don’t see the ratification of this deal as a huge problem. They’ll probably need to introduce an India specific bill to amend the US Atomic Energy Act.

UK Outreach of the Communist Party Of India (Marxist)

At a time of political turmoil in India, where the Communists withdrew their support for the Congress led UPA Government in Delhi – which could lead to the rapid decline of the UPA and trigger a general election, we organised a private dinner for Comrade Biman Bose, Chairman of the Left Front, Member of the CPI (M) Politburo, and West Bengal Secretary of the CPI(M) with key political commentators and other opinion formers in London.

Regardless of what one makes of his party’s position on crucial subjects like the India – US Nuclear Deal, it was refreshing to hear him speak, and you had to appreciate the simple fact that he knew that he’d be in for a hard time on the evening but was nevertheless keen to engage. 

Despite the meeting being billed as ‘off-the-record’, he reversed this by agreeing to speak ‘on-the-record’, and since then has been at the centre of a story that’s found wings in which the journalist reports that the CPI(M) is willing to work with the BJP. A scoop!

Knowing political culture, both parties are sworn enemies but it doesn’t surprise me that they’re willing to speak with each other. One only has to look back at the toppling of the VP Singh Government in which both played a significant role in toppling that Government. For this reason, we shouldn’t be surprised.

With elections scheduled for early next year, If I were Sonia Gandhi, I’d be tempted to call an election sooner rather than later. Right now, they can make mischief by casting the BJP as the stumbling block to the country’s development by their objection to the nuclear deal. Later on, the effects of the slowing economy, double digit inflation etc are going to hit them for six. They’ve already lost key states and with several other key elections scheduled across India this year, which they’re guaranteed to lose – they don’t stand a hope in hell in returning back to office.

It was great to organise the Communist outreach in London. One of our guests even commented that it was good to hear Comrade Bose’s views at such an eventful time in Indian politics.

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