A V Rajwade: After the election

WORLD MONEY

I have been holidaying in south-east Asia for the past few weeks. Coincidentally, I was also away from Mumbai when the senior Mrs Gandhi got an equal, if less pleasant, surprise back in 1977. I was in Calcutta then, with Rajib Roy of the CPI, a friend and colleague in the State Bank of India Officers' Union.

Listening to the surprise results, Rajib said, "When the new government comes in, the politics of distribution will have to give way to the politics of production (that is, growth)."

Rajib's perceptive observation came true, if only after a few years, and has remained true for the past two decades. Will the latest election surprise lead to the pendulum swinging back?

But first some thoughts on the election results. Media commentators have attributed the surprising win of the Congress to the benefits of growth not reaching large segments of the population, and the "pro-poor" image of the Congress. This logic is suspect:

The NDA lost equal ground in Delhi and Mumbai, the two richest cities.

The Congress has ruled the country for 80 per cent of the time since 1947. If half the world's poor people are still Indians, surely the major share of the responsibility has to be that of the Congress and the policies it pursued. East Asia and China evidence the change that can be made to the lives of ordinary people in just one generation of right economic policies.

Bijli, sadak and pani? If these were important to the voter, surely Laloo Yadav's RJD would not have won two-thirds of the seats in Bihar? Because, if there is one politician singularly above mundane matters like governance, administration and development, it is Laloo Yadav.

Anti incumbency? What of the CPI(M) and the RJD? The reality is that, as Surjit Bhalla analysed in this newspaper last Thursday ("Mandate? What mandate?, May 20), there has been little change in the vote percentages of the BJP and the Congress. The swing in the number of MPs is the result of the "first-past-the-post" system and the alliances.

To me, the most sorry part of our character that came out in the election was the display of our feudal and indeed, male chauvinistic attitude.

To quote one representative voter comment on the topic of Sonia Gandhi's foreign origin, "Daughters have no nation but that of their husbands. She is our bahu. Besides, she had borne Rajiv Gandhi two children."

Can there be a greater insult to a woman's individuality? If many such comments came from the supposedly-wise rural folk, the displays by the supposedly more sophisticated Congress leaders on Sonia's deciding not to become prime minister, were equally nauseating "" the fervent pleas for the "saviour", the threats to commit suicide unless Sonia accepts the crown, the hunger strikes and so on. What a spectacle we made of ourselves before the world's TV cameras!

But this apart, Sonia's decision was a political masterstroke "" it gave her the moral high ground, at the same time retaining the remote control firmly in her hands.

Overall, Manmohan Singh's job, with no power-base of his own, is extremely difficult. Somehow, he has to manage not only party leaders, but allies like Laloo Yadav and the outside supporters from the Left.

Yadav's sulk on not being offered the Home portfolio is a pointer to Singh's difficulties. All that we can do is wish him well for his, and our own, sake.

But the fear of the politics of distribution taking over once again comes from the defeat of reformist and indeed effective chief ministers like Digvijay Singh and Ashok Gehlot of the Congress, and Chandrababu Naidu of the TDP.

Add to that the larger influence of the Left, with all the power to topple the government, and no responsibility to keep it functioning.

But enough of politics. Let me turn to some comparisons in terms of the much-trumpeted competitiveness of our services sector. Take tourism, for instance. It is difficult to be optimistic about our ability to attract, and satisfy, tourists.

Infrastructure in Thailand and Malaysia, for example, is incomparably superior, and clean/green environments the rule, not the exception. Costs? Consider some comparisons with Chiang Mai, Thailand's second city, also famous for the Asean declaration on currency swaps:

An a la carte dinner for four in a lovely riverside restaurant, with superior service and a couple of drinks thrown in: Baht 800 (Rs 880 approximately)

Buffet lunch in a 3-star hotel: B 90

A made-to-measure suit that my friend got stitched and delivered in 24 hours: $100. (In Mumbai the cost of a similar suit will not be anything less than Rs 10,000.)

A hotel in one of the loveliest landscaped gardens I have seen, complete with swimming pool and basic services: B 1200 a double room for a night.

Air-conditioned car with driver and guide, no mileage restrictions: B 1500 for nine hours.

You think we can compete? You think the rupee is undervalued? Think again, remembering also that the Thai bearers, drivers, maintenance staff and tailors have higher standards of living than their counterparts in India. (Per capita income in Thailand is $ 6,000.)

Where does the far-cheaper pricing come from? Higher productivity? Real estate prices and costs, which are far higher in India, thanks to the Congress Party's "pro-poor", "socialist" urban land ceiling policies?

The only comparative advantage we have is knowledge of the English language, so necessary for IT and IT-enabled services. How long will that last?

Email: avrco@vsnl.com