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Foreigners fed-up with India

Pooja Bahuguna in New Delhi

The hard talk done by the foreign delegates at World Economic Forum seminar held last week in New Delhi is that frustration has finally overtaken enthusiasm, thanks to the the slow progress of economic reform in the country.

The speakers criticised the Indian government for the slowdown in the reforms process. World Economic Forum Managing Director Claude Smadja, in his opening remarks, had said, ``Once more, India or, to be more precise, Indian politicians have reverted to their favorite hobby, that is, political diversion.'' Similarly, Asea Brown Boveri Chairman Percy Barnevik expressing his concern over the present state of affairs and asked the policy makers to expedite the reforms process to enable it to attract foreign investment.

The foreign delegates were equally harsh off the podium. Dr Peter Wagner, executive vice-president of the US-based consultancy firm Atkearney, complained to Rediff On The Net about promises made and not kept. "For the past three years, at seminars of this sort, the Indian government has constantly assured us that it will expedite the pace of reforms," he said. "But little changes have actually taken place on the ground.

He stated that though foreign companies would not like to ignore India, they had decided to do some plain speaking at this seminar, and the Indian government and people should accept the criticisms as loud thinking done by their close friends and well wishers.

Wagner, however, did express the worry that such open and frank criticism could also have a negative impact on Indian policy-makers, who might decide to ignore foreigners completely and become more inward looking.

Incidentally, this apprehension was also voiced by Smadja. The WEF managing director noted that many members of the Indian establishment did not seem bothered by New Delhi's slow pace, and warned if India did not move fast enough to align itself to what was happening in the rest of the world, it would be marginalised and left on the sidelines.

He warned against the sense of complacency prevailing among many that even if the world were to bypass India, it would anyway have to come back because India was too big a market to be marginalised.

Another foreign delegate, who did not wish to be identified, said that they were frustrated as things had not moved at all in the last two years at all. Most of the proposals put forwarded by either the previous Congress government during its last year of existence or the present United Front government under both the prime ministers H D Deve Gowda and I K Gujral had run into rough weather because of stiff opposition from within the respective parties.

He admitted that under these circumstances, foreigners were not happy, and wanted this aspect to be clear though it should not be misconstrued to mean that the world was ignoring India. It would, however, imply that they would concentrate on other markets which were currently performing better and as and when India would put its house in order they would come back again.

The various delegates also expressed concern over the fate of the reform process in the near future. Dr Wagner said he was worried about the political turmoil in the country and point blank refused to accept the general refrain that this was the price of having a democratic setup in the country.

He declared that any system was good if it delivered the goods and pointed out that China was attracting a huge foreign investment despite the fact that it had one party system. He said things do move in China unlike in India. And therein lies the difference.

Meanwhile, Smadja asserted that the next general elections results will make little difference towards boosting the economic reforms in the country, and painted an extremely bleak future of the country.

He expressed doubts at the capabilities of all the three groups -- United Front, Congress Bharatiya Janata Party -- to carry forward the reform process in the country or give reforms the necessary push.

Smadja said the political class was totally absorbed in itself and continued to lag behind the times, despite the need to set a urgent need to bring the Indian economy more in tune with the global economy and the realities of the 21^st century.

The WEF official pointed out that though many groups are keen to see major changes take place, there was no single organised and strong group pushing for reforms on the basis of a broad conceptual framework in the fragmented political landscape, which is dominated by personal rivalries and ambitions.

``This is one major weakness and the next election will not necessarily alter this radically,'' lamented Smadja.

He said that in the coming elections, economic reforms would presumably be absent from the debate, which was very disturbing.

Smadja refused to buy the the general refrain that the reform process was irreversible. He said this was of little consequence unless there existed a common programme to go along with it. A general consensus on reforms did not preclude different priorities in emphasis and pace which will affect the the business community, he declared.

Smadja was critical of all the three main political formations. The United Front was a less-than-homogeneous coalition with much internal bickering and whose experience was not very encouraging. Though the finance minister had enjoyed support from the two successive prime ministers, various projects or proposals were stalled or ran into fierce opposition by fellow cabinet members, he added.

Smadja stated that the Congress Party's major limitations were that it was tainted by corruption and scandals up to the highest level besides being held responsible for the present crisis. He pointed out that the party has entered the campaign without a central theme, a strong slogan, or a convincing leader at its helm.

Coming to the Bharatiya Janata Party, he said thought it was the first party to advocate economic reforms, a number of ambiguities existed. The party, he felt, had a restrictive approach regarding foreign investment, favouring involvement in the infrastructure and industrial sectors but not in the consumer goods sector. "Perhaps it is the composition of the BJP's constituency of traders and small producers that has forced it to resort to this policy," Smadja opined.

He warned the BJP against using the Swadeshi slogan. "This kind of political rhetoric has a way of hitting back with vengeance," he added.

EARLIER REPORTS:
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Smadja pessimistic
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