THE GOOD DOCTOR:

Win-win: Manmohan Singh gets the nod (Indrajit Basu, 5/20/04, Asia Times)

Sonia Gandhi's refusal - twice in two days - to become India's next prime minister may be as surprising as her Congress party's election win itself, but Manmohan Singh as the replacement candidate may just be what the doctor ordered for the country's economy, stock markets, industry chiefs and foreign experts say. [...]

Singh, 71, is a former finance minister and the architect of India's economic reforms that began in the early 1990s to roll back decades of central control. To most experts, Singh is the best choice for the post. Gandhi's is an extremely clever move, as she gains, the Congress gains, and India gains.

Martin Hutchinson, a Washington-based ex-international investment banker who specializes in investment opportunities in emerging markets, said the future of India partly rested on who got the prime minister's job. "A reformer [like Singh] locks in economic progress, whereas an old-guard socialist, or a weak leader without intellectual background [Gandhi], raises the risk profile of foreign investment in the country considerably," he said.

For the country's stock markets, perhaps nothing could be a better balm in chaotic post-election India as Singh as the next prime minister. The markets remained bullish on Wednesday despite the political uncertainty early in the day. The 30-share Mumbai stock exchange's Sensitive Index, which opened 65 points higher at 4,942, soon breached the 5,000 mark to touch an intra-day high of 5,060 on strong buying support across the board. It eventually closed up 129 points on the day at 5,006. The S&P/CNX Nifty Index of 50 stocks on the National Stock Exchange rose 64 points to close at 1,568.

Said Hutchinson: "The principal uncertainty among foreign investors over the incoming Congress-led government was the fact that Sonia Gandhi promised to the electorate that she would attempt to boost growth by additional injections of public spending [which would have more than likely, given the Gandhi family's fiscal history and belief system]. That would have quickly made India's fiscal position run out of control, bringing economic growth to a juddering halt. One could be optimistic if Manmohan Singh himself were to be the prime minister."

Optimistic, but cautious.

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Singh's economic balancing act (Ranjit Devraj, 5/21/04, Asia Times)

The image that most residents of the national capital have of Manmohan Singh, due to be sworn in as India's next prime minister Saturday, is that of a diminutive, turbaned man patiently steering his small car through a chaotic sea of sleek limousines, hulking buses and slow-moving pedicabs.

That image probably portrays best the soft-spoken economist who, as finance minister between 1991 and 1996, is credited with steering India's overprotected economy - dominated by monopolistic business families and an inefficient public sector - through a difficult first phase of reforms.

"Manmohanomics" was blamed for the 1996 electoral defeat of the venerable Congress party, which had always styled itself as a pro-poor, socialist party ever since it assumed charge of the country in 1947 when India gained independence from British colonial rule. But both the left-dominated United Front government which took over in 1996 and the right-wing, ultra-nationalist Bharatiya Janata Party (BJP), which followed in 1998, only deepened and widened the reforms initiated by Singh.

Now, the "Good Doctor", as the newspaper headlines often describe Singh, partly in deference to his impressive academic credentials, is back in the driver's seat - this time as prime minister after Congress party leader Sonia Gandhi declined the nomination on Wednesday.

Posted by Orrin Judd at May 20, 2004 2:47 PM