Is India Arriving?

IMGXYZ811IMGZYX Rafiq Dossani, Senior Research Scholar at the Shorenstein Asia-Pacific Research Center of Stanford University, gave a talk entitled “Is India Arriving?” at the Carnegie Endowment for International Peace on Tuesday, November 13, 2007. Dossani acknowleged that by the measure of economic growth and international prestige, India is unquestionably “arriving” as a major global power. But when one considers other indicators—such as India’s non-market sector, widespread poverty, and social democracy—India’s arrival is not so obvious. Dossani’s optimistic address focused on the major changes he sees in Indian politics that have made the government more responsive to its people and more apt to undertake needed reforms.  

Dossani described some of the major obstacles facing the growth of India’s economy and social democracy. India lags behind Sub-Saharan Africa on some measures, including sever anemia in women, underweight children, and daily caloric intake. In addition, the slow growth of agriculture, which still employs two-third of India’s workforce, continues to restrain India’s economy.

Many of these problems stem from government failures, Dossani said. Prior to 1989, he noted, the Congress party had a near monopoly on political power at the central level. Indian big business and the public sector were the two dominant voices in politics. Indian industry during this period was inefficient and unimaginative.

IMGXYZ813IMGZYXDespite the high voter participation rate among poor voters—considerable higher than middle class and wealthy people—the poor, especially the rural poor, had little voice in the political process prior to 1989, and continue to be marginalized today. Dossani explained the paradox of higher voter participation and low voice of the poor as a result of the kind of patron-client relations formed between low-income communities and their elected representatives, in which poor people swap votes for services, but are unable to press for more general reforms. The system of higher education in India, he said, was also in need of an overhaul—professors to this day continue to be paid a fraction of what their students are paid upon graduation, which ahs contributed to a rapid drain of talent out of the universities. The private sector has steppe dup to fill the educational void, Dossani noted, but the rapidity of the transition is causing instability.

However, since 1989, no single party has managed to have a majority in parliament, which has prompted the reform and re-institutionalization of the bureaucracy. Dossani predicted that Indian politics will involve more national-regional coalitions in which regional parties are increasingly interested in foreign policy. Regional parties and political movements have already had a major impact—60% of India’s IT industry resides outside of Bangalore and Mumbai, a result of projects spurred on by regional, not national, initiatives.
More than anything else, reported Dossani, it is the sense of enterprise and freedom resulting from the past decade and a half of growth that is currently spurring Indian entrepreneurship.

During the question and answer session, Dossani discussed India’s regional political parties, and argued that older parties tend to be more mature than younger ones, but that all were an improvement over the monopolistic political system of the pre-1989 era. The Communist party, he noted, was responsible for the only two successful bouts of land reform in India. People should not be so quick to dismiss the Communist party for their opposition to the nuclear deal, he said, because the Communist party and other parties opposing the deal represent a legitimate constituency. Dossani also expressed faith in the Indian electorate, which was responsible for the reforms after Rajiv Gandhi’s prime ministership, and for ousting the BJP in 2004.

Dossani also remarked that the United States ought to carefully manage its relationship with India. The US has always wanted to forge a closer relationship with India, but Nehru eschewed tying its wagon to the US in favor of state planning and nonalignment. Democracy alone was too tenuous a link to build a meaningful US-India alliance. The current US policy of encouraging India to build a financial sector in Mumbai while pressuring it on the nuclear deal is a poor strategy, he said.

Rafiq Dossani’s remarks stemmed from his new book, India Arriving.