IGNORING THE 20TH CENTURY:

The Bear's Lair: Another victim for Demos (Martin Hutchinson, 5/17/2004, UPI)

India's rejection of prime minister Atal Bihari Vajpayee reminds one in its ingratitude of Britain's rejection of Winston Churchill in 1945. Like Margaret Thatcher's ouster in 1990, it imposes a heavy brake on the pace of economic reform. Yet unlike the departure of Arthur, Duke of Wellington in 1830, it does not represent the irreversible death of an ideal of government.

The coalition led by Vajpayee's Bharatiya Janata Party (BJP) won an overall parliamentary majority in 1999, at which time he and the BJP were known primarily for their Hindu nationalism and their construction of India's first nuclear weapon. Since that date, he has presided over a government committed to economic reform, that has raised India's economic growth rate to the historically unprecedented level of 8 percent per annum, while, aided by a good monsoon in 2003, reducing rural poverty significantly from its mid 1990s level. Yet in 2004, with record growth and a tentative peace deal with Pakistan on his resume, he was decisively rejected by the electorate. Not only has the cause of sound economic policy been damaged in the short term, its long term future in India has also been placed in doubt, as the electoral fruits of even the most successful reforms have proved to be so bitter.

At first sight, the new Congress Party-led government might seem adequately committed to continuing reform. Its likely finance minister, Manmohan Singh, was the brave soul who, faced with a near-default situation and a currency crisis, embarked in 1991 on the process of economic reform. Even Congress' partners, the Communists, are not really communists in the Western sense of the word, and are themselves committed at least to maintaining the reforms and privatization that have already taken place.

However, Manmohan Singh's reforms took place in one of the very few periods in which Congress was not run by one of the Gandhi family -- it was during the 1991-96 premiership of Narasimha Rao, shortly after the assassination of Rajiv Gandhi. If Manmohan Singh himself were to be prime minister, one could be optimistic, but it appears that Sonia Gandhi, the Italian-born wife of the late Rajiv, will take the top job.

Which explains this, Sensex Crashes 822 Pts, Investors Lose Rs 2 Trillion; Trading Halted (NNN, 5/17/04):

Country’s stock markets crashed like nine pins on Monday forcing the authorities to halt trading twice as the Bombay Stock Exchange (BSE) index fell more than 15% , a whopping by 822 points, amid fears that the new government could stall economic reforms, hurting millions of investors who lost up to an estimated Rs 200,000 crore (Rs 2 trillion) in the morning business itself.

The Security and Exchange Board of India (SEBI) authorities first halted trading for one hour at 1015 hours as the market fell by over 550 points but the freeze was imposed again within minutes of recommencement as the downhill march continued.

After recommencing trading at 1115 hours, it was closed within three minutes as the BSE fell further by 272 points to reach 4247.59.

The National Stock Exchange (NSE) too plummeted to 1306 after losing 276 points.

Monday's bloodbath on the bourses was being attributed to the uncertainty over economic policies of the new Government.

That's pretty much the essence of socialism--divvy up much less more equally, so that pretty nearly everyone's in a worse position financially, but they're suffering together.

Posted by Orrin Judd at May 17, 2004 10:58 PM