India A Nation, Not A Market

There was considerable pressure on everyone involved in the Enron affair to behave, or else. On the eve of the announcement, a diplomat friend from a western country called on me and started talking about the consequences.

What consequences ? I asked.

Don't forget that you are playing with fire. You could be in big trouble. There could be a ban on your exports and foreign investment could come to a halt.

Are you threatening us? I asked.

No, he said, just warning you. Don't forget that billions are involved.

So what, I asked myself, a poor country is always in trouble. But there is such a thing as national self-respect, the only thing a poor country can boast of, and without which it is no more a nation.

 

I told the visitor, a good friend otherwise, that threats served no useful purpose in such matters, and we shall do what we have to do. And that is precisely what the Maharashtra government did.

The usual Uncle Toms in India made a lot of noise, as they always do whenever you corner MNCs. They warned that foreign investors would be scared and India's development would suffer. This was also what my diplomat friend had tried to say, and our Uncle Toms were paraphrasing him, as they have always done all these years.

The Economist from London wrote a piece, in its usual know-all style, with the heading An India that still says No. It ended the editorial with a warning that it will be the people, not politicians, who will ultimately have to bear the cost.

The people did not bear the cost, for the simple reason that there was no cost to bear. India chalked up a record year of growth, with industrial production up by 12 per cent, despite a liquidity crunch, and a better-than-average rise in GDP. Foreign direct investment doubled to $2 billion, and not a single intending foreign investor backed out because of Enron.

A year after it happened, Enron is still in the courts, but there are no signs that it is having any effect on foreign investment. Every week, the Foreign Investment Promotion Board clears scores of proposals, and the line of foreign investors, is longer than ever. And Enron does not make news anymore, except perhaps in financial newspapers. It does not make news even in Mumbai, despite Ram Jethmalani's fireworks.

The same people are issuing dire warnings of a backlash from the West on the CTBT issue. But nothing is going to happen - and this is what a state department spokesman conceded last week