As Region Faces Economic Reforms, India Also at Political Crossroads

By M. M. Ali

It was almost surrealistic to participate in Delhi in the intellectual post-mortem of the Rajiv Gandhi assassination. Speculation about the perpetrators ranged from a vendetta by a single person or family to a superpower conspiracy carried out through the craft and daring of a notorious surrogate.

Wherever the responsibility ultimately comes to rest, it has propelled India to a new crossroads where political crisis is compounded by unprecedented economic crisis. Neither results solely from the assassination.

Young Rajiv Gandhi's national image could not have averted the impending economic avalanche. Without him, however, the political leadership issue becomes, at least for the time being, harder to resolve.

It will be some time before Congress party stalwarts like Sharad Pawar, Narain Datt Tiwari or an Arjun Singh work their way up. Until then, the South Indian team of President R. Venkataraman and Prime Minister Narasimha Rao will have to hold the fort.

Mind you, also, although Rajiv Gandhi's wife Sonia may mean it when she says "no" to the offer of leadership, their daughter, Priyanka, cannot be ruled out for too long. With two Kennedys dead and one almost out of the game on penalties, how many Americans are prepared to rule out any possibility that another Kennedy will make a run for the White House sometime in the future? We all live by our love-hate relationship with our first families. Every republic has its democratic royalty.

The Electoral Outcome

No one had expected that the mid-season Indian elections would produce conclusive results. A hung Parliament has almost become part of the Indian political jargon. The political map that has emerged after the completion of the two-phased elections, however, is less confusing than most anticipated, with few surprises and fewer shocks.

There is little evidence that the Gandhi assassination resulted in a significant sympathy vote in favor of the Congress (I) party, although some analysts have tried to interpret even a slight increase in unusual places as a "swing vote. " As a matter of fact, talking to taxi-drivers, journalist friends, some high-strung bureaucrats and a few university professors in New Delhi, I came back with an impression that Congress (I) probably would have done much better at the polls had Rajiv Gandhi been alive. With elections still to be held in the state of Punjab, Congress (I) has won 225 seats out of 493 it contested, a gain of 28 seats from the 1989 elections.

The right-wing Bharatiya Janata Party (BJP), a comparative newcomer in national politics, may be described as a big gainer, from 4 Lokh Sabha (lower house of the Indian Parliament) seats in 1984 to 85 in 1989 to 119 in 1991. Although BJP has still a long way to go in order to capture the central government in Delhi, its victory in Uttar Pradesh, the powerful state that constitutes the fulcrum of the Hindi belt in north India, is a very significant development. This is the state that has produced most of the prime ministers of India. Another associated gain of the BJP has been the entry into its ranks of senior retired civil servants and military men, including Isaac Jacobs, who was second in command of the Indian army that helped create Bangladesh out of East Pakistan in 1971.

V. P. Singh's Janata Dal was a loser. From the 143 Lokh Sabha seats won in 1989, it has dropped to a mere 55. Singh, who had hoped to capitalize on his support of the Scheduled Caste, backward classes and the Muslim minority, lacked organization, time and money to run on principles and social issues. Chandra Shekar's breakaway Janata Dal was almost obliterated. He failed in his gamble to score on a mid-term vote by bringing down the government of which he was prime minister.

Former movie star Jayalalita of the AIADMK came out the biggest winner in south India by capturing 163 seats out of the 234 in Tamil Nadu's state assembly. She ran on a joint platform with the Congress (I) which won 61 assembly seats. Ironically, this was the state where Rajiv was killed.

Jyoti Basu, the maverick of the Communist party, maintained his grip over West Bengal for the fourth straight electoral term.

Catapulted by a sudden turn of events onto center stage from a life of retirement and rest, Narasimha Rao, a compromise candidate, has obtained the necessary Lokh Sabha confidence vote and has formed a cabinet. He has another six months to get himself elected to the Parliament.

Congress' troubles are far from over, however. Narasimha Rao has reportedly agreed to hold the office only temporarily. How long will depend on his personal health, and how long it takes for Congress (I) to find a successor. Narasimha Rao knows he is presiding over a very divided house. The key to even his short-term survival as an effective prime minister depends on how he deals with the growing economic crisis.

The Economic Enigma

Poverty, with its accompanying miseries, even in countries with 100 million population like Bangladesh, causes sleepless nights for many economic planners across the globe. If the problems are increased eightfold, as in India, they become an unending nightmare for all. India's size can also be regarded as an asset in the world's balance. It may ease the transition from an almost bankrupt benefactor to a new and viable one. But, after years of problems, the South Asian giant's size does not weigh so heavily in the scales as in the days of superpower rivalry. That is the problem facing India today. Even the Bank of England wants gold bullion collateral before it extends credit.

When countries left far behind on the road to growth and development freed themselves of the colonial past, there was a natural eagerness to catch up with the "developed world." Stricken by hunger, disease and want, many found the Marxist promises attractive, and they ventured into planned economies with some shade of socialism and streaks of capitalism as the guiding light.

India was one of them. Realizing the risks involved in a 180-degree turn, India made allowances for the private sector, while looking to the public sector as the main instrument of change. The experiment did not totally succeed, nor did it fail.

India's foreign exchange position has hit rock bottom.

Now, with the Soviet Union coming to terms with a market economy, and Europe and the United States making privatization a condition for assistance, countries like India and Pakistan are called upon to make difficult choices. While the politicians in power go along, the bureaucrats whose power battened on a maze of state regulations and controls find privatization distasteful and threatening. They covertly resist the new wind blowing.

India's foreign exchange position has practically hit rock bottom. Its $70 billion plus foreign debt requires hundreds of millions of dollars just for debt servicing. The Washington-based International Monetary Fund (IMF) lent $1.8 billion in January of this year to help India pay its immediate obligations. New Delhi is back with the IMF for another loan of about $4 billion. The IMF very likely will wait to see the stipulations that India's new finance minister, Dr. Manmohan Singh, places in his upcoming annual budget. The IMF is believed to have asked for devaluation of the Indian rupee, deregulation of trade barriers and tariffs, and a start toward privatization as good faith actions before any consideration is given to a new and bigger loan. In the interim, the IMF and the World Bank have offered $370 million with a stand-by of over $2 billion.

Singh already has devalued the rupee twice within a week, and a new budget was due by the end of July. India's case comes on the heels of Soviet President Gorbachev's appearance before the Group of Seven summit seeking economic assistance himself.

Changes in the world dictate changes in the subcontinent. The questions are how far, how fast and at what cost to the populations that have little to spare.

M. M. Ali is a professor at the University of the District of Columbia.