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Economics through politics

September 27, 2009

There has been a lot said and written about Manmohan Singh’s exchanges with President Obama at the G-20 Summit and his constructive suggestions to the world community as regards the world economic downturn and the restructuring that is being proposed. It was indeed heartening to see the economist in Manmohan Singh giving direction to the thought process being followed by the leading nations of the world. There was this little exchange between our prime minister and South African president Jacob Zuma that the prime minister mentioned in the passing. Their exchange was about the general economic condition but there was also a mention of the long drawn Bharati-MTN deal that came up. One of the news channels reported this as follows:

‘The proposed $23-billion Bharti-MTN deal, which had run into trouble over the issue of dual listing and the revised Sebi takeover norms, received a shot in the arm with the South African President Jacob Zuma assuring Prime Minister Manmohan Singh that the deal would not be subject to any discriminatory treatment in his country.

The Prime Minister said, “I did mention this (the Bharti-MTN issue) to President Zuma, and told him I sincerely hope this deal will go through.” He said the two agreed the matter could be discussed further with the South African government. “As far as MTN issue is concerned, I mentioned it to Jacob Zuma. I sincerely hope that this deal would go through and there will be no discrimination against it,” he told reporters in reply to a question at a press conference here.’

This is something new to India. Not that this is the first time an Indian company is on the verge of buying a foreign company. That has happened in the past. It is the upfront promotion of Indian company by the political leadership, without any apologies or an effort at camouflaging it as something else that has struck many an observers. This is very un-Indian, if I might use the term. Generally the political class in India tends to keep a distance in matters of corporate affairs. Things have changed though. Manmohan Singh’s pitch for the Bharati-MTN deal is a coming of age of sorts. This is a very western way of doing things. But then the world is changing and the political and economic lines are blurring very fast.

The one thing that is in favor of Manmohan Singh is that his clean image and his upfront way of politics is such a refreshing change that no one questions his motives. The nation knows that Manmohan Singh will not do anything for his own personal gains. That gives him the moral authority to pitch for a company with the head of another state. This is a very good sign. Most nations do this and there is no reason why the Indian political leadership should shy away from something that promotes the national interest.

I am sure that this was not the first time that Indian political leadership has pitched for an Indian company but what is surely a first is the way it has been done – out in the open without any pretense or long drawn explanation. The matter of fact way in which this has been received by the public and the media also shows that Indian polity and economic interests are converging to the benefit of the nation. I am not celebrating this as a victory of sorts for India, nor am I suggesting that the deal is done. For all one may know this deal may not happen at all. I am also not going into the details of the pros and cons of the deal for the country. What this endorsement by the political leadership has done is to show that there is a connect between the economic leadership and the political leadership of the country and that the country does not work in splits and parts. That is a strong message for the world.

The other thing that this has done is to reinforce the stand that Indian economic strength is intrinsic to the diplomacy that the nation undertakes across the globe. This acknowledgement of the importance given to economic issues boiling down to specific deals is something that is a departure from the stand taken by previous governments. This micro-management is critical and that phony moral high ground of the government addressing on issues of policy – a broad framework, as was the stand in the past does not impress anyone. This will make the South African leadership think twice before rejecting any proposals by the Indian company – Bharati Airtel in this case. By taking this up, the prime minister has given a clear indication that if the deal is given thumbs down by the South Africans that would have wider bi-lateral implications. India and South Africa have had very good bilateral and economic relations over the years and it would be in no one’s interest to unnecessarily put hurdles to a deal that is being seen by many as a win-win situation for both the telecom giants. I guess such upfront endorsement of economic interests shows the strength of the political leadership. This might also help both these important nations to develop closer economic and political ties. I will not go into the details of the bilateral relations between the two nations. Suffice to say that Manmohan Singh has done something that is new to Indian political landscape. But then it takes a Manmohan Singh to be able to do something like this. I hope the Indian leadership in future also does not shy away from promoting the cause of our corporate sector aggressively with other nations. There has to be greater exchange of views and cooperation between corporate India and political leadership. This is a good beginning. Those who will criticize this as the the big Indian corporates taking over the Indian politics should understand that the political leadership in a democracy such as Indian cannot afford to sidestep people’s issues. But to refrain from taking any constructive action to bolster the interests of  Indian companies is a very unimaginative way of doing politics and is a regressive step for the economy of the nation. This forthrightness is good for the politics and economics of the country. Besides it brings the two nations closer.

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