Authors: Steve Coll

On the Grand Trunk Road (10 page)

Mahule punched the ticket of N. Ramesh, a well-dressed twenty-five-year-old returning to Madras from New Delhi. I asked Ramesh what he and the younger friends he went to college with thought about government service. “Most of my friends want to go on their own,” he answered. “They want to work. They don’t want to sit idle in government. If you want to learn, you have to work. Most of those who are skilled don’t have an interest in government work. With my skills I know I can always find something. If you have an invention you can surely make a go of it. You can work for a few years to learn what the work is about, then you go on your own. That is everybody’s idea. I personally want to start my own company in computers in a few years.”

If reform of the Nehruvian state succeeds, then Ramesh and his generation will be the ones to lead and define the new order. The impressive number of Indians who have succeeded after emigrating to the West suggests this generation ought to do well if they have the chance. But what worries the generation of Ramesh’s parents—the middle class built by the state after independence and steeped in its values—is that something essential may be lost in the transition.

At the head of the train was H. N. Sharma, a driver for thirty-three years and a former member of India’s national field hockey team. His gray hair was neatly coiffed and he wore black spectacles and a pressed gray uniform. As he rolled down the tracks, punching buttons and waving to passersby, he said he felt that in the present rush to reform and repudiate the Nehruvian tradition, the younger generation might lead India in dangerous directions. “If a boy is twenty-three or twenty-four or twenty-five and he’s earning a lot of money, he may spoil his habits,” Sharma said. “Young people today are not so interested in government service. They are busy making money. I could have made money. Money is a criterion, no doubt, but side by side you’ve got to see your reputation. Men who are fortunately born, they become train drivers. It is a hardworking job with a lot of responsibility and respect.” It had provided him a good business, a well-constructed house and a garden, a good life for his family. Here, he implied, was the spine of Indian democracy. What similar stability could this next, impatient, money-hungry young generation construct ?

The most important architects of South Asia’s economic and social reforms have been Nawaz Sharif, the prime minister of Pakistan, who came to power in October 1990; P. V. Narasimha Rao, the prime minister of India, who took office in June 1991 following the assassination of Rajiv Gandhi; and Rao’s finance minister, Manmohan Singh, a Sikh and a longtime bureaucrat and socialist who very recently embraced the neoconservative creed with a convert’s enthusiasm. All three have attempted to reform radically the establishment apparatus that gave birth to and nurtured their careers, by reducing the state’s relative power throughout the political economy. They see themselves in political positions comparable to Gorbachev’s in the late 1980s. Indeed, one of Rao’s first mistakes was his spontaneous pronouncement during the first days of the August 1991 coup attempt against Gorbachev that the event was a lesson to reformers everywhere that they must proceed cautiously. When Yeltsin prevailed, Rao was roundly denounced for implicitly backing the wrong side in the Soviet coup and for suggesting that spinelessness was the solution to his own political predicament.

Much of the publicity about reform of the socialist bureaucracy in South Asia has centered on India, but actually it was Sharif who moved first and who has been the boldest. (Sri Lanka’s elite moved sharply to the right during the late 1970s, but hardly anyone paid attention because the reforms were subsumed by civil war.) In time, it may be judged that the greatest significance of Sharif’s move was not that he saved Pakistan, whose politics are so fractured and whose key state institutions, such as the police, are so decayed that they may be immune to a prime minister’s policies. Rather, by announcing his embrace of the free market, Sharif provided the only stimulus capable of moving his lethargic rivals in the Indian elite. The motivating power of the hatred and rivalry between India and Pakistan is difficult to overestimate. Throughout the late 1980s, Westerners and cranky right-wingers in the Indian elite, including the leadership of the rising Hindu nationalist movement, had been urging reform of the tottering Nehruvian behemoth. Many of India’s brethren in the leftist nonaligned movement were already well down the path to free market reform: Malaysia, Indonesia, Mexico, Brazil, Chile, China, even Yugoslavia. Yet the New Delhi bureaucrats stood firm. India was not like any other country, they insisted again and again. It required guidance, protection, nurturing from above. Even when it became clear that the reformers had gained ascendancy in the Soviet Union, the most important source of subsidies for the Nehruvian state, the elite was unmoved. But when Pakistan—Pakistan!—started talking about free market reform as the key to higher economic growth rates, wider prosperity, national strength and self-reliance in the new world order, well, the New Delhi elite took notice. One of the most important intellectual events in India’s sudden move toward capitalist reform was an interview Nawaz Sharif gave to the accomplished Indian journalist Shekhar Gupta early in 1991. Sharif used the forum to explain how he intended to turn Pakistan into a new Asian economic tiger, freeing capital and human energy for economic growth and then using the proceeds of that growth to strengthen the welfare state. Gupta hurled at Sharif the usual tenets of the old feudal socialist order: What about the downtrodden out in the villages? What about the poor? Sharif knocked the questions down. What the poor need are jobs, he said. The only viable way to create jobs is through business. The state is broke, unsalvageable. Businesses require a free market, and Pakistan will give it to them. After the interview was published, it was all anybody in New Delhi government and media circles could talk about. It was as if the Pakistan cricket team had announced the discovery of a new bowling technique guaranteed to baffle Indian batters. There was a sense, as so often arises in the relationship between India and Pakistan, that India was not to be outdone.

Sharif pressed ahead to redeem his pledges but his quest appeared increasingly quixotic. Pakistanis are divided, as they so frequently are, about how much blame Sharif himself deserves for the difficulties he encountered. One problem is that Sharif had poor credentials as a reformer-from-within because politically he is a creature of one of the Pakistani establishment’s most divisive incarnations, the long period of martial law led by General Zia ul-Haq during the 1980s. Sharif was Zia’s martial-law governor in Punjab province, and so his credentials as a plain-speaking businessman are undermined by his history of rank political opportunism. The family industries Sharif built were constructed during a period of oppression and corruption. In person, he comes off as a bit befuddled. Despite these and other limitations, as well as the chronic maladies of Pakistan’s divided polity, the economy has kicked out briskly under Sharif’s spur. The prime minister abolished foreign exchange controls and many customs restrictions and he proudly declared that Pakistan should now be considered one giant airport green channel. The country’s well-developed class of heroin smugglers and gunrunners, among others, are responding vigorously. “Our policy today is whoever wants to invest in Pakistan, whether Pakistani or foreigner, doesn’t have to seek permission from the government. He can do what he likes wherever in Pakistan, no matter how much money he brings into Pakistan in dollars or other foreign currency—no questions asked,” Sharif explained one morning over breakfast at the governor’s mansion in Lahore, glancing at a prepared stack of note cards he kept in his lap. “Of course, we want to have minimum contact of the government with the people to eliminate corruption, and, of course, exploitation.” Exploitation of the people by the government? For years, that idea languished.

India’s top-down reformers are more credible politically than Sharif but less enthusiastic about the actual matter of capitalism. Prime Minister Rao and Finance Minister Singh both spent their long careers as public servants in the heart of the Nehruvian bureaucracy. Compared with their peers in the elite, they possess the rare virtue of not being corrupt. But both were for long years Nehruvian true believers and Rao, particularly, now in his early seventies, sometimes talks as if it is painful to let go of the old ideas. At the least, his understanding of how one might strive for a fair and just free market that would consolidate the Indian middle class seems limited.

In the spring of 1991, after Rajiv Gandhi’s assassination, I spoke with Rao at length on a train rumbling across northern India. The train bore Gandhi’s ashes for immersion in the Ganges River near the Nehru family’s Allahabad home. It was a strange setting—the assassination had thrown the country into political chaos in the midst of an election. The headless Congress Party was wrestling with the succession, and while it seemed that the longtime loyalist Rao would prevail, the situation was volatile, not least because so many rank-and-file party thugs, pushed by a clique of Gandhi loyalists, kept clamoring for the nomination of Sonia Gandhi, Rajiv’s Italian-born widow. At stations along the whistle-stop train tour, mobs of paid Congress workers surged toward a garlanded car at the center of the train where some of Rajiv’s ashes were being kept in an urn. Sonia and her children, engulfed in grief, sat cross-legged on the carriage’s floor. Behind the urn most of the party leadership rode in an air-conditioned coach with curtained windows. When I wandered in during the middle of the afternoon, with Mark Fineman of the
Los Angeles Times,
to look for Rao, the car was as dark as night and the Congress pols—mainly fat men wrapped in great robes of white khadi—lay flopped on their first-class bunks, asleep, snoring. Bending and peering in search of familiar faces, we could not help thinking that we had stumbled abruptly into the land of the dinosaurs.

Fortunately for India, Rao is different—gentle, scholarly, fluent in nine languages, seemingly possessed of many of the virtues and few of the vices of his generation and class. Boldness, however, is not in his character. As we rumbled along, I asked what he had in mind for India, should he come to power in the weeks ahead. The government was nearly bankrupt, in danger of defaulting on more than $70 billion in foreign debt—a figure that the World Bank later estimated would rise to $93 billion by the mid-1990S, requiring India to come up with $10 billion annually to pay interest and principal and to finance export imbalances. The previous administration, a brief farce led by the sweet-tempered socialist Chandra Shekhar, had been forced to pawn off confiscated gold to make its loan payments. In reply, Rao talked of change as if it were something a minister had ordered and which he, the senior civil servant, was now about to implement.

“Rajiv had set up a cell to deal with this, the economy,” he said. “Their papers are there. The cell is there. There has been interaction. He [Rajiv] has [sic] been talking to vast numbers of economists in the last six months. He has given the lead.” Rao conceded that he had long believed in Nehruvian socialism, but “we have been compelled to revise and at least rethink our own beliefs.”

If this was not the talk of a capitalist revolutionary, perhaps it was because that afternoon Rao had other things on his mind. The leaderless Congress Party lay in fragments. The Hindu revivalists were clamoring for power. Staring out the train window at the blistering summer heat that shimmered in waves across the parched brown countryside, Rao spoke mainly about Nehru’s political inheritance, which he felt had to be somehow stitched back together if India was to have the opportunity to change. He said with conviction that the party would not split, but at the same time preventing catastrophe would be no small matter. “Right now, we feel it as the greatest challenge,” he said. “To lose a leader in the middle of an election, that has never happened before.” Still, the adhesive of the Nehruvian state arose from one fact, he continued: “This party is where power is available. This is the source of political power in India. There will be claimants and claims, people who get it and don’t. Rivalry will remain but the party will not break. We know when to stop the fight.” He rhapsodized about the Nehruvian elite, its long struggle for independence and nation-building. “This is a one-hundred-six-year-old party, four or five generations. We have lots of families in India where the head of the family is not the most brilliant or able but still the family continues because of the loyalty. The party has always thrown up leadership that is good enough to keep the party together. I stand for what they stood for. All the ideas are there. The whole case is there but we have to marshal it.” And then, referring to the impending vote, he added, “We have three days.”

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