Too Busy For Business

HERE'S a small slice of fact that captures the essence of the misplaced priorities of Indian policy-makers. During his six-day visit to New York City, the capital of the capitalist world, Prime Minister Atal Behari Vajpayee and his entourage chose to set apart a mere 45 minutes to deal with business. International business included.

Even that meeting, with some 20 leading lights of corporate America, chosen from the US-India Business Council and the India-America Chamber of Commerce, was chaotic, said many of the glitterati who attended the session in the New York Palace Hotel on Madison Avenue. The encounter was almost an afterthought—it was the last official event on Vajpayee's itinerary in the US before he flew out to Paris.

A stark contrast to another Indian politician, also in town, who made meeting with business leaders his main business. N. Chandrababu Naidu, chief minister of Andhra Pradesh, went about his task with extraordinary zeal. No such luck with Vajpayee, who was ensconced in his hotel meeting with, hold your breath, the foreign ministers of Portugal, Egypt, Malaysia, Zimbabwe, Bangladesh and Bahrain.

The question that's being asked privately by several corporate chieftains and other India experts is: at a time when global economics is in a topsy-turvy spin and economic diplomacy has dwarfed the importance of old-fashioned political hail-fellow-well-met, why wasn't the prime minister advised to set apart a much larger chunk of his time to meet and schmooze with corporate decision-makers and Wall Street investors while he was in New York?

Even the one meeting billed as "PM's meeting with Business Leaders" was far from satisfying for the participants. As it got under way, the fire-alarm system in the hotel went off with deafening noise and for some 20 minutes the Vajpayee meeting became a non-event as participants tried to speak over the din. Then Vajpayee made yet another of his listless presentations from prepared text, breaking no new ground. To cap it all, the guests were each given one minute—yes, one minute—for their observations, according to both governmental and non-governmental sources at the meeting.

One source said: "The PM was repeatedly told about the bureaucratic hurdles investors were facing in India. He listened intently and at one point he seemed exasperated and asked: 'Tell me, what should I do?' The room broke into laughter and one participant suggested he appoint 'expediters' to push projects through. Vajpayee's predictable retort: 'That would mean one more layer of bureaucrats.'"

 The three main points business leaders made were: problems with the investor confidence level in India, lack of a coherent roadmap from the government that precisely outlines a plan and strategy for FDI in India's development; and identify areas (perhaps power, ports, financial sector etc) where major breakthrough could be achieved and where the bureaucracy will know what needs to be done.

H "I don't think they get it yet," said one senior official from an American firm. "They're still under an illusion the world will come to India. They're wrong. There are other places we can go to."

Even in his path-breaking speech on Indo-US relations to the Asia Society, Vajpayee barely touched on commercial relations. He, however, acknowledged: "We know we have to implement many more internal and external reforms to harness the full potential of our economy. We shall definitely do so. At the same time, we shall continue to raise our voice for radically reforming the global economic order as the main guarantor for a stable and peaceful 21st century."

 "We in India have taken a principled stand towards globalisation—cautious, calibrated and steady integration. We have remained largely unaffected by the turmoil in the Asian markets," he added.

Reacting to the speech, Marshall M. Bouton, executive vice-president of Asia Society, told Outlook: "The PM passed over the economic issues too quickly. He did make a good impression, but there's still a desire on the part of business leaders to see more solid evidence of India moving ahead on the road to reforms. Also, where's the centre of gravity for economic policymaking—that's the question many are asking."

This indeed was a problem Naidu was confronted with in one of his numerous meetings in the country. David Meachin, chairman and CEO of Cross Border, a fund firm that manages over $4 billion, bluntly told him: "Your state may be doing wonderfully with exciting capabilities, but somehow the country must move on. Things just don't happen in India." In effect, Naidu was told international investors first think of countries to invest in, later worry about the state. A flummoxed Naidu could only say: "I thank you for your honest opinion."

However, irrespective of Vajpayee's poor efforts to promote Indian economy abroad, the first steps towards dilution of sanctions were taken recently. Lawmakers in a House-Senate panel took the first step toward giving President Bill Clinton greater flexibility in negotiations with India by allowing a one-year waiver of sanctions. The move, part of a hefty agriculture bill, by the House-Senate conference committee was a preliminary step that could lead to a general revision of the US approach towards sanctions.

The Clinton administration feels that a year's waiver would give its negotiators better diplomatic leverage. Moreover, there has been lobbying against the sanctions from two important players: Corporate America, which is upset that it could be missing out on lucrative deals in the potentially large Indian market and the politically fired-up 1.5-million-strong Indian American community, which is angry with the sanctions imposed on their homeland.

Even if the bill clears Congress, it could be vetoed by Clinton because certain provisions in it have become the subject of political football. Besides, they involve the quintessence of American politics: pork-barrel provisions involving millions of dollars in farm concessions and the abortion pill so crucial to the strong feminist lobby.

But there's clearly a long way to go, with Clinton putting off his visit to India and Pakistan. As a White House spokesman said: "We made some progress on the issues that obviously prompted this decision: nuclear testing and export controls.... Until more progress is achieved we are not going to be able to lift the sanctions that are in place and we are not in a position to strengthen the kind of bilateral ties with both governments which we would naturally want."

 In his September 23 news conference here, Vajpayee had said: "We'll be happy to welcome President Clinton, since a US president will be coming to India after 20 years. But we'd like him to come in a positive atmosphere." An administration official, speaking on phone from Washington, said: "We agree with the Indians that the president's visit should be made in the most positive of circumstances.... We are still working on a number of issues and we aren't sure of having it all wrapped up by November. ... This is postponement, not a cancellation."

Only goes to show that it'll be quite a while before bureaucratic hurdles are cleared up in both the countries.