CII CHENNAI SUMMIT
Economic Consensus Amidst Political Differences
The face of reforms: Congress, UF and BJP are all one whenit comes to the NEP. Their leaders at the Chennai CII Summit.
Amidst the prevailing political instability, at least one thing looks stable. No matter what formation assumes power at the centre, the New Economic Policy (NEP) will remain unchanged. This was spelt out clearly at the recent meet of the CII at Chennai, aptly called the Partnership Summit. Otherwise bitter foes on the political field, Indias three main political outfits appeared partners in convincing the big bourgeoisie that come what may the NEP will remain.
It is quite common nowadays to find politicians of all hues, at least those who matter, make appearances at CII meets and sport their industry-friendly profile. Yet probably for the first time at Chennai, leaders of the Congress, the BJP and the UF vibed in perfect harmony to convince the captains of Indian industry with their bonafides. Perhaps the bourgeoisie too realises that the fate of the reforms will remain safe no matter who among the three comes to power. As Rahul Bajaj confessed to the French Employers Federation (CNPF) recently, "from our point of view, a change in government would not mean a radical change in economic policy".
The UFs Murasoli Maran put on the extra-radical posture claiming that the remaining nine industries on the licensing list should also go and called for a license-free, FIPB-free and bureaucrats-free industrial climate. Dispelling doubts about the UFs economic agenda being a 14-piece cacophony, specially the lefts discordant agenda, Maran, surprisingly much more vehemently than the representatives of the Congress or BJP, made mincemeat of the Lefts postures on economic reforms. He said, "I do not make fake distinctions between potato chips and computer chips. We accept any chips that provide jobs and help our economy. The biggest French fries project was approved not for other states but for West Bengal."
Not to be outdone by Marans radical stance, BJPs Jaswant Singh demanded that the BIFR should go and went on to endorse everything Maran said. Congress Rajesh Pilot while conceding whatever his earlier two speakers had said, reminded that this process for which everyone wanted a share of the credit was started by his party seven years ago.
While the 3 outfits kick-off to a bitter political (and social) battle in the coming elections, at Chennai their message to the Indian bourgeoisie clearly was: We remain yours truly everafter!
From the Tiger's Mouth
Panitchpakdi cautioned India against plunging headlong into globalisation and urged it to learn from the mistakes committed by the Asian Tiger economies now reeling under a severe currency crisis. He said,"Avoid repeating the mistakes we made. We were expanding our economies when we should have been consolidating, and we were not forewarned of the dangers that lay ahead"
The current crisis which had changed the fortunes of Thailand in the last few months, he said, was marked by an "irrational, unreasonable and illogical" meltdown in the values of East and South-east Asian currencies besides sluggishness in economic growth, threatened to balloon into a global crisis soon. "The private sector had been overenthusiastic and committed themselves to high growth and profitability rates, leveraging accordingly, and yielded to aspirations of placing their papers in the international capital markets. The government too had erred by allowing a free external borrowing regime to set in. As much as 90 billion dollars were borrowed from overseas, with the private sector accounting for 70 billion dollars. They tripped into financial mismatch when repayment stared them in the face, even before their long term projects became viable."
The deputy prime minister accused the US and the IMF for imposing conditionalities which would only aggravate the crisis. "It should be examined why the IMF package, though implemented by us faithfully, has not had the kind of revival impact such packages normally have", he said.
India, he said, must put a "water tight" supervisory mechanism before it liberalises its financial sector, as the "speed of globalisation" was a crucial factor in sustaining the reforms process.
Will our avid globalisers on the tigers trail heed the danger call?