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Oozing nationalism - The Financial Express

Editorial ()
February 5, 1998

Title: Oozing nationalism
Author: Editorial
Publication: The Financial Express
Date: February 5, 1998

Editorial comment on the BJP economic policy

As a statement of intent, the BJP's pre-poll economic manifesto
oozes nationalism from every pore. To that extent, it will be
seen as out of tune with reality. Nationalism in this age of
globalisation appears a quaint notion to India's intelligentsia,
never mind how high a price the nation has to pay for
globalisation of the here-and-now variety.

The common argument for globalisation is actually not an argument
at all. The main refrain of the unthinking globalisers is: "Run,
or you'll miss the bus." Nobody stops to ask the more crucial
question: Do we really want to board any bus without knowing
where it is headed? Or what the fare will be? The BJP manifesto
is unique precisely because it seeks to answer this uncomfortable

It's answer is: we will board the bus, or take another vehicle,
at the time of our choosing. The truth is globalisation can never
be a now-or-never option for a country as big as India. China is
still not part of the WTO-but it does not seem to have suffered
much from its 50-year isolation.

It has silently prepared itself to face the world on its terms,
and today the world is beating a path to its door. Nationalism,
not globalisation, is the driving force for China.

It has no legal framework worth the name, it is picky in the type
of investment it seeks, it has some 2,50,000 inefficient state
enterprises (we have just a few hundreds), and its economic
decisions have political undertones for the rest of the world.
But this is the China that is held up as a great destination for
investment by the "democratic" western powers. Less than 10 years
after Tiananmen Square, China is far from being the pariah it
once was.

There is a lesson in all this for India. In doing what is right
for the country, it should be afraid to walk alone for a while.

This idea is the bedrock on which the BJP manifesto is rooted,
and one cannot fault it on this score. But between the feel-good
approach of economic nationalism and the reality of negotiating
global realities, much can go wrong. And it is here that the BJP
needs to focus its energies.

It is all right to say that domestic industry will be protected
for 7 to 10 years, but the point is not protection itself, but
what it is going to be used for. Will domestic industry just use
the leeway to fleece consumer sand then fade away? Or will it use
the interregnum to build real strengths to compete globally? It
is hogwash to say the rupee's depreciation will be checked-unless
you can tell us what the idea is.

Indian exports currently cannot compete on anything except price.
Unless real export strengths are built based on brands and
marketshares, an appreciating rupee will only damage the balance-
of-payments position. Or take power policy.

The BJP has pledged that all eight fast-track projects will begin
construction this year if it comes to power. But more important
than getting a few costly projects off the ground is the policy
initiative needed to privatise distribution and raise tariffs for

India's power crisis is less about availability of power than
inability to recover the costs of generating it. Till this basic
problem is left unaddressed, the SEBs will be on the fast-track
to disaster.

The BJP talks of merging weak public sector banks with stronger
ones. But it will be making a mistake if it thinks that size is

Size is important, but speed and adaptability are more important.
The dinosaurs became extinct because they were not fast enough,
not because they were not big.

In sum, the BJP's manifesto displays some understanding of the
direction it wants to go. But it still needs a roadmap. It has
demonstrated that its heart bleeds for India.

But if the country does actually place its destiny in the BJP's
hands, it will rind that it needs head more than heart to set
things right.

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