Thursday, March 02, 2006

Indian lessons

Jagdish Bhagwati expanded upon them on the eve of the Bush visit to India

Talking to Indian reporters on the eve of his visit to India, President Bush recalled Mahatma Gandhi as ?so spiritual that he captured the imagination of the entire world.? He was no doubt alluding to Gandhi?s great achievement in teaching us all the virtues of nonviolence. But if he were to study India?s accomplishments and failures in the years since its independence, he would also detect lessons for his current foreign policy preoccupations.

After all these years of Realism in US foreign policy, the Bush administration is appropriately interested in the spread of democracy... Yet as the US goes about its business of pressure-cooked democratization in Iraq, we need to appreciate that Indian democracy succeeded because her political institutions were a legacy that evolved over decades under British rule. During those years, the rule of law, elections, the judiciary, even NGOs, developed through the land. Iraq?s difficulties illustrate, by contrast, how hard it is to transplant functioning democratic institutions.

Nehru?s India... showed well how the give-and-take of democratic practice managed to hold the country together against the separatist tendencies that confronted a nation of many languages and religions, despite the massacres and population transfers that followed its partition in 1947...

But starting with Nehru, and way beyond his death, we know that India?s economy took the wrong turn and embraced a ?socialist? model whose pillars were near-autarky in trade based on self-fulfilling pessimism about export potential; a hugely restrictive policy on inward investment based on fear; a knee-jerk set of controls on production, investment and trade; and a lovefest with public sector enterprises that proliferated beyond utilities while making huge losses. Many of these policies began to be substantially reversed, starting particularly in 1991 when... Manmohan Singh, was finance minister. Overhauling the old policy framework was a gigantic task, which is still ongoing. Besides, the coalition with the communists, and the return of the old, discredited socialists within the Congress party, has created difficulties in sustaining the momentum of reforms... These reforms have taken the Indian economy to a significantly higher growth path and, more important, have finally made a noticeable dent in poverty... So reformers interested in reducing poverty can only rejoice; and the president should be able to tell the Doubting Thomases: Go and see for yourself in India...

The writer has authored ?In Defense of Globalization? (Oxford, 2004). This commentary is excerpted from ?The Wall Street Journal?, Feb 28
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