A V Rajwade: The foreigner phobia

WORLD MONEY

While Nehru asked Mountbatten to continue as Governor General, we don't want even private firms to have foreign CEOs.

How far have we come from the days of the late Jawaharlal Nehru, in our distrust of, and suspicions about, the foreigner! Nehru had no hesitation in requesting the last Viceroy, Lord Mountbatten, to continue as Governor General of India. (Indeed, there is no parallel to this among countries gaining independence from colonial rule.) And, Lord Mountbatten was not just a figurehead "" several contemporary accounts suggest his active involvement in many sensitive issues like the Hindu-Muslim riots and the Kashmir problem. Today, we are so afraid of the foreigner that Lord Mountbatten would not be acceptable even as the head of a telecom company! Sonia Gandhi should beware where the next stage of security consciousness may land her "" but I was forgetting that she is no longer a foreigner!

The security concerns getting increasingly voiced in recent weeks in relation to both foreign investment and the appointment of foreigners as chief executives in various businesses, other restrictive policies on FDI, and the singling out of Coke and Pepsi for the alleged pesticide contamination, are perhaps also parts of the same attitudinal issue. There are several ironies in the present ethos:

The middle class, often critical of the consumerism allegedly fostered by MNCs, is only too happy to have children going abroad for studies, and/or getting employed by MNCs "" a green card and US citizenship are only a little short of nirvana.

The Left, which has a global ideology obliterating national boundaries, is as prone to foreigner phobia as the RSS, even when the leading Leftist party is itself named after a foreigner.

Could our overall approach help strengthen the opposition to our fast-growing IT and BPO sectors in western countries?

The security paranoia is now proposed to be embodied in an act, giving the bureaucracy even more power on the investment flows and decisions. As it is, Chinese investments in manufacturing, ports, hydropower projects and so on have been denied approval. The contrast between our worries about Chinese coming into India, and their welcome of Indian investment, reminds me of an old experience. In 1971, at the height of the cold war, I visited East Berlin, then behind the iron curtain, as a day tourist. The elaborate security checks while entering East Berlin, the checking and rechecking of passports against a list by half a dozen security personnel, declaration of the money carried and so on, made me feel quite at home. While coming back into the American zone, the single GI on duty literally whistled us through, giving a wave of his hand "" emphasising the contrast between open and closed societies. The irony is that between India and China, it is democratic India which is afraid of visitors and investments from Communist China, not the other way round! I am wondering how BSNL's equipment and networking contract was given to China's ZTE "" or how ONGC and Sinopec have joined together in buying a 50 per cent stake in Omimex of Colombia.

The bureaucracy is making sure that the foreigner's life is made as uneasy and uncertain as possible in other ways as well. The income-tax department has appealed against the interpretation of the Authority of Advanced Rulings (AAR) in a case involving a BPO unit "" one would have thought that the very purpose of creating such an authority was to give a final verdict to the foreign investor before he invests. But obviously this is not so.

Even the financial sector does not seem to be free of fear of the foreigner. In recent weeks alone, the central bank has barred Stanchart from taking over the branch licences of the Bank of Bahrain and Kuwait, with the takeover of its assets and liabilities; and is reportedly opposed to Barclays buying a stake in ARCIL, the asset reconstruction company. Twenty-odd foreign banks are waiting for licences and, reportedly, the RBI is also uneasy about foreign investment in exchanges. There is an impasse over the issue of Indian banks' getting full licences in Singapore and Singapore banks' getting 15 branch licences in India, though agreed to in principle.

Incidentally, 2 per cent of the US army is manned by non-citizens. Reportedly, it wants to open a recruiting office in India. Would we get over our hangovers about foreigners coming here to rule the country, and look at this simply as an employment opportunity? There is a long sub-continental history of the Gurkhas being employed by the British army in the most sensitive theatres of war.

Tailpiece: The security concerns raised over foreign investments and appointments of foreign chief executives in some "sensitive" sectors remind me that we are probably the only country in the world with less than friendly relations with all our neighbours. Perhaps no wonder, given the finesse displayed by our two illustrious and self-righteous former foreign ministers in recent weeks, while handling matters like the mole in the PMO, and the oil transactions with Iraq.

Email: avrco@vsnl.com