Friday, May 23, 2014

Can Narendra Modi Reshape India?

Narendra Modi's landslide victory at the Indian general elections speaks volumes to the fact that the majority of Indian people have pinned their hopes to him when it comes to reshaping India into a better place.

Widely seen as a pro-business figure, Prime Minister Modi is expected to apply his experience gained from his days as chief minister of the Gujarat state to the rest of India. Having risen from a commoner, it is also believed that he widely appreciates what the general Indian people need and possesses a strong willingness to hand Indians a higher standard of living and tackle corruption.

Modi did not elaborate on his foreign policy stance during his election campaign. But some believe he may pursue a hard line toward disputes based on the track record of his party, the BJP. Others contend that he may soften up when he starts to think in the position of the Prime Minister.

So how do Indians look at the electoral victory of Prime Minister Modi? What changes, be they in economy, social welfare or foreign policy, do people expect Mr. Modi to bring to India?

Prof. Mattoo spoke to China Radio International's Zheng Chenguang in Beijing to discuss some of these issues. To listen in, click on the link below:

(Source: China Radio International)

Wednesday, May 21, 2014

PM must make India a priority

AFTER five years of policy paralysis under a dysfunctional coalition government, India, with a newly elected leadership, promises to once again become a major player in the Indo-Pacific region.
As it does so, Australia is uniquely placed to become a key strategic and business partner of India — if Canberra can reach out quickly to the new government.
Tony Abbott must visit New Delhi as soon as possible and use the opportunity to sign the nuclear safeguards agreement, negotiations for which are well advanced.
Signing the agreement does more than just set the rules governing lucrative uranium sales: it will symbolise the end of the years of mistrust that undermined bilateral relations, and the arrival of a new era.
The victory of the Bharatiya Janata Party and its prime ministerial candidate, Narendra Modi, was so overwhelming because the party was challenging what was perceived to be a weak, corrupt and increasingly directionless coalition led by the Congress Party.
On almost every economic indicator during the past few years, India has been doing poorly: growth has stalled, investor confidence is eroded and the fiscal deficit has increased because of poorly thought out, populist welfare schemes.
In the past year, credit rating agency Standard & Poor’s has rated India BBB-negative — just above junk.
Amid this general stagnation, one of the few states to do exceptionally well has been Gujarat, led by its four time-elected chief minister, Modi, who during the next few days will be sworn in as prime minister of India.
At the Vibrant Gujarat summit I attended last year at the state capital, Gandhinagar, every captain of Indian industry, including Ratan Tata and the Mukesh Ambani of Tata and Reliance, India’s two biggest companies, spoke of the investor-friendly environment in Gujarat and the remarkable turnaround Modi had brought to the state.
Despite his decisive victory, Modi comes to his new office not without controversy. Riots in 2002, in his early days as chief minister, continue to disconnect him from a strong section of India’s liberal intelligentsia.
But that negative legacy may turn out to be a positive: it is precisely why Modi will seek to focus on the economy and demonstrate that he can deliver good governance, rather than continue to pursue socially divisive issues that remain a pro forma part of his party’s manifesto.
As India begins to undertake path-breaking reforms under a newly decisive leadership, it will open up new opportunities for the world. It is an opportunity Canberra must seize.
The long shadow of the Cold War, India’s autarkic economic policies and Canberra’s decision not to transfer uranium to India, have kept the two countries apart for several decades. But this is now history.
Today, there are few countries in the region with which Australia has as much in common, by way of values and interests, as India. Apart from being two English-speaking, multicultural, federal democracies that believe in and respect the rule of law, both have a strategic interest in ensuring a balance in the Indo-Pacific and in ensuring that the region is not dominated by any one hegemonic power.
It is, however, the economic opportunities that the Modi government promises to bring that could provide the cement to bind Australia and India closer together. Two sectors stand out: mining and higher education, including vocation educational and skills development. Both are at the centre of Modi’s policy radar.
For decades, the mining sector in India has been poorly governed and badly regulated. According to a 2012 McKinsey report, India’s mining sector has the potential to contribute $40 billion annually to government revenue and create, directly or indirectly, an additional 2.3 million jobs.
As the report points out, despite having the top five or six reserves globally in many commodities such as iron ore and thermal coal, the mining industry is small and contributes only 1.2 per cent of gross domestic product.
Modi has emphasised that he wants urgently to reform the mining sector.
In Australia, the end of the mining boom presents challenges in particular for the mining services sector, and it could benefit from the opening up of India’s mining sector.
The Australia India Institute has recently set up a task force to explore the huge win-win potential if Australia and India work together.
With investment in mining falling in Australia as India’s need for investment, technology and skills is growing more pressing, we could soon see Australian mining services companies replacing local demand by working in India, and India using Australian skills to unlock its mineral resources.
Similarly, reform in higher education, particularly vocational education, is vital for the Modi government as it attempts to realise the country’s so-called demographic dividend from its 500 million young people aged under 25.
The state of the higher education sector in particular is an abiding reminder of the deadening effect of India’s planned economy up until 1990, the so-called licence-permit Raj, which stunted India’s global ambitions.
The previous government introduced several bills to reform the sector but, with insufficient support and political will, all were stalled in parliament. The Modi government will make sure these reforms are carried out.
This will present an opportunity for Australian universities, which are faced domestically with several challenges, to take advantage of the biggest market in the world.
The Australia-India relationship is clearly an idea whose time has come. But it can only live up to its potential if Abbott starts planning his visit now.

(Source: The Australian)

Monday, May 19, 2014

Modi election win could open up business opportunities for Australia

Professor Amitabh Mattoo says Narendra Modi's election win in India could open up enormous business opportunities for Australia, but the personal relationship between the leaders of the two nations will be critical.

To listen in to Prof. Mattoo's conversation with ABC's Eleanor Hall, click on the link below:

(Source: ABC)

Sunday, May 18, 2014

Indian Election Results

The world's largest democratic election is over with Indians voting in Narendra Modi and their new Prime Minister. What were the factors that led to such a comprehensive victory and what does he have in mind for the country? Listen in to Prof. Mattoo in conversation with Jonathan Green on ABC Radio National's Sunday Extra.

Click on the link below to listen to the interview:

(Source:  ABC Radio National)

Friday, May 16, 2014

The man who dines alone

Love him or loathe him, there is no denying that only Narendra Modi can claim credit for the landslide victory of the Bharatiya Janata Party in India’s just-concluded 16th General Election.
The BJP fought the election on the basis of just one issue: the personality and track record of Modi. Modi spoke at nearly 400 public rallies during the campaign, and at each rally he was treated – as the journalist Swapan Dasgupta put it – like a rock star. A decisive, clear-thinking leader, Modi had a simple message: the magic of the Gujarat model of development (a state he has ruled for more than a decade) and how it can be replicated in the rest of India.
He communicated this forcefully to an impatient young India (600 million people under the age of 25) angry with the establishment and the ruling Congress Party for letting them down, and looking for hope. In contrast, the much younger heir apparent of the Congress, Rahul Gandhi, seemed disconnected, elusive and unable to defend his government, which seemed – at least in the last five years - directionless and massively corrupt.
There was, in reality, no contest. You could have predicted this election many months ago, when you saw every captain of Indian industry pay their obeisance to Modi at the Vibrant Gujarat summit in January last year, and when you saw rage in the eyes of the young and the helplessness at the massive movement against corruption in 2011.
But Modi is a classic Manichean figure. He invites awe, admiration and devotion amongst his followers; and deep fear and even hatred amongst his detractors. While Modi seems to have united, in this election, more than 80 percent of Hindus (85 percent of the population of India) across caste, linguistic and regional divisions, there are few amongst the Muslims (13 percent of the population; about 140 million) who trust him.
As chief Minister of Gujarat or as a prime ministerial candidate he could afford to ignore the minorities. No longer so as the Prime Minister of India. One of his first tasks will be to reassure the minorities that they can be safe, secure and successful in Modi’s India. The best way to do this is by focusing on the agenda for economic growth and good governance (and the opening up of new opportunities for young people) that has made Gujarat the envy of other states. Modi must pay a little heed to many within and outside his party who may want him to advance potentially divisive social and political issues.
Narendra Modi famously likes to dine alone. If as Prime Minister of India he learns to break bread even with his detractors, and delivers on the faith that young India has reposed in him, he will ensure that his party will stay in power even beyond this election.

(Source: The Conversation)

Wednesday, May 7, 2014

The meanest election India has ever seen

With results due in next week, campaigning for India’s 16th Lok Sabha (lower house) election is in its final stages. Commentators are calling this the meanest election India has ever seen, with mudslinging taken to a new level.

International relations scholar Amitabh Mattoo says this is due to the changing political landscape in India where elections are presidential-style personality contests and candidates will do anything to tarnish the reputation of their adversaries.

Listen to Professor Mattoo’s podcast below.

(Source: The Conversation)