This was one self-conscious message of Anil’s cricket-stadium wedding—the synthesis of the old patriarchal coronation with the egalitarian imperatives of a competitive economy. India’s elegant Old Money—the Tatas, the Birlas, the Wadiyas, who trace their fortunes to collaboration with the British Empire and then the independence movement—would not countenance such a crass public display. But to Anil the crowning moment of the reception was precisely when he spotted two dozen speckled, toothless tobacco sellers approaching him through the great swarm of politicians, businessmen, relatives, and other onlookers. The
paan wallahs
bore gifts—a large silver bowl and some crystal glasses worth five hundred dollars or more. They had purchased these with profits from Reliance Industries debentures, or convertible stock securities, which they had badgered the Ambanis to allocate to them from a special lot.
“They said, ‘All of us, you know, you made us such rich people, we are now rich,’ “Anil recalled.” ‘Each one of us must have made at least eight, ten thousand bucks apiece. And now because you gave your own quota, sir, and so on, so on, so on, so we have all come to greet you and wish you a happy married life, and we come with this gift.’ ”
A patriarch glowing in the warmth of his adherents’ gratitude is perhaps the subcontinent’s oldest political image. But when that gratitude depends of the convertible price of a debenture trading in an international capital market, surely an interesting change has occurred. To Anil, the change was contained in his knowledge of what would happen if the capital markets he attempts to influence turned against him and the price of his Reliance debenture fell. At that point, the tobacco sellers “would have given me a kick. They would say ‘Let him come out—we’ll bash him up’ or something.” When patriarchal performance has a price and the price is published daily in the financial sections of the Bombay newspapers, then the pillars of the old obeisance are beginning to crumble. And the tobacco sellers at Anil’s wedding are not an isolated example—there are now more than five million individual shareholders of Reliance Industries in India.
One problem is that few potential institutions of capitalism in India—the stock and bond markets, the banks, the export authorities—have yet broken free from the embrace of the Nehruvian state, which means they remain crippled by the hierarchies and corruption of the old order. A version of this problem has certainly impeded Pakistan’s reforms. In India, the difficulty became obvious in the spring of 1992 when an ambitious Bombay insurance clerk named Harshad Mehta, attempting to forge a rise modeled on the Ambanis’, brought the entire stock market crashing down through a series of speculative manipulations involving state-owned and foreign banks. As Mehta inflated a speculative market bubble and drove prices up, up, up with his manipulations, India’s new shareholding class cheered, astonished at the promised magic of capitalism. Nobody, it seemed, was prepared to question Mehta’s highly dubious genius because to do so would be to undermine the fragile consensus around the new order. Even
Newstrack,
the independent video news magazine that serves as the middle class’s trumpet of accountability, produced an adulatory profile of Mehta that consisted mainly of reporters badgering him for particularly profitable stock tips. When the bubble burst and Mehta went to jail, India was “shocked” at the illusions in which it had invested. Politicians and the media fell back on their traditions of hysterical scape-goating, in which selected examples of official malfeasance are skewered and roasted as if they were somehow exceptions to the rule. (This, of course, is a cycle familiar to anyone who has lived in Washington.) Yet the spirit of reform remained unbroken because there were enough politicians in New Delhi, led by finance minister Manmohan Singh, who understood that even this crisis, if properly managed, could advance the reformers’ cause.
The inevitable nexus between the new capitalism and the old state lends credibility to those in India who argue that the Ambanis and their Bombay brethren are merely old wolves in new clothes. This argument comes from both left and right. On the left, aside from the tattered remnants of the Communist ideologists, there are scores and scores of caste- or clan-based politicians and mafia leaders who fear they may be unable to compete effectively in the new game if the state drastically shifts its allegiances to the private sector. Many of these minor thug-politicians have already made their deals with the existing domestic monopolists and oligopolists in the old-line business community and they are deeply uncomfortable about the prospect of a political economy in which they may not be so well positioned to exact their bureaucratic rents. I felt this most acutely one evening with Ram Paswan, deputy leader of the Janata Dal, the left-center opposition party whose main platform these days consists of support for government affirmative action for “other backward classes” and opposition to most forms of capitalism.
We sat in Paswan’s New Delhi bungalow, where two dozen supplicants had gathered around him to seek favors and discuss political business. Paswan dismissed the group in order to lecture about international capitalism’s many dangers. “This government is the government of the upper castes and big businessmen,” he began. “All people and all parties except some big business houses are opposing this reform. The people just realize that acceptance of this new economic policy will jeopardize political and economic sovereignty.”
But whose sovereignty? As he spoke, Paswan sat in a thronelike armchair surrounded by a color television, sprawling couches, and spinning fans. He wore a well-tailored Nehru coat, a pressed shirt, a gold ring, and a fancy watch. I waved to all this and said, “But you live here in a very big house, with many amenities. Don’t you think people all over India want such amenities?”
“This house is very big,” he conceded. “Every facility is there. But I never consider that this is my one house. My house is in my village in Bihar. One’s hut is more respectable than others’ buildings. It’s psychological.... The World Bank dictates what will be our village. But what of those who are living in the villages, in bonded labor?”
“But so many other Third World governments are moving in a different direction these days,” I said. “Chile, Argentina, Brazil, Malaysia, Indonesia—and these are proud, independent governments. Don’t you worry that they may know something you don’t?”
“After ten years, what will happen? They will be shamefaced,” he answered. “All of these countries—maybe they have no other alternative. India has got resources. You can develop your industries. You can utilize your manpower. One computer—I agree with you, it is more efficient. But do you realize, one computer makes one hundred persons unemployed? In Western countries, European countries, in other parts of the world, there is a lack of manpower. We have more manpower than we require. The main thing is that you want a market.”
He mentioned Pepsi, whose attempt to penetrate the Indian soft drink market had been skillfully impeded by a domestic monopolist who, I was told by Indian politicians, had spread his money around the parliament, purchasing with it such public outbursts of socialist xenophobia as Paswan now offered. I told Paswan that he knew better than I did that the business about Pepsi was all a farce, that the politics around it was bought and paid for by an Indian soft drink manufacturer.
“I don’t want to get into that,” he said. “But Coke—what about Coke?”
Before we could tackle this philosophical question, the telephone rang. Somebody from Bombay. Paswan had to run.
The sometime masters of politicians like Paswan include old-line manufacturers whose markets have been protected for centuries, first by the imperialists and then by the socialists, and who tend to see nothing terribly wrong with the way things were. At the same time, they worry considerably about industrialists like the Ambanis who seem to be rewarded for their professed contempt for the old arrangements.
In Bombay I once drove out to see Nusli Wadia, heir to his family’s three-hundred-year-old shipping and textile fortune. Wadia is a discreet, sophisticated Anglophile who lives in a glorious mansion on the Arabian Sea filled with family heirlooms. Wadia’s Bombay Dyeing firm has been in feverish and losing competition with the Ambanis in the textile business—Wadia even accused his rivals of hiring a hit man to assassinate him on his way to work, a charge that the Ambanis denied and that was never proven. But the main point Wadia wanted to make was that the rapid rise of India’s New Money did not in any way represent systemic progress, but was rather the last gasp of the old, corrupt system. When true capitalism came to South Asia, he said, the Ambanis would be seen as its victims, not its architects.
“They survived through managing and manipulating the system,” he said. “You can make or break any industry by deciding the duty structure. Also, you have to import raw materials. It’s not like a free economy. Here what decides your fate is how well you can manipulate the system. The Ambanis have brought about this kind of culture. They were able to sell at enormously high profits. We don’t have an SEC [Securities and Exchange Commission] like you do, so you can fool the investor through market manipulation. So long as the manipulation makes money, you do well.... No industrial house in India has got the licenses the Ambanis have. They can get one billion dollars’ worth of licenses in a single day. People in this country wait years. It’s a question of what sort of business environment you want. You remove these controls and he won’t be able to function. His manufacturing is not that efficient. But his manipulation of the political system is more efficient than anyone in the country.”
The Ambanis, of course, do not see themselves that way at all. The rapidity with which they have closed $30 million and $50 million deals with Western and Japanese corporations in the aftermath of the announced capitalist reforms suggests at least that they are persuasive about their credentials as pure businessmen. Of course, they do not shrink either from the idea that they possess unusual political influence. I used to talk to the Ambani crowd regularly because they did seem to know, rather well in advance, where the twists and turns of New Delhi’s internecine politics would next lead, and for someone who was supposed to keep track of such matters, their prognostications were useful. But by the time I left South Asia in mid-1992, a year after the unveiling of free market reforms, it did seem that the family’s attention to New Delhi was wavering. The people I used to call in Bombay now seemed to be traveling abroad a great deal.
After the cricket-stadium wedding, I made an appointment to visit with Anil in his plush, hushed, blue-gray offices in a downtown Bombay tower, to ask what was going on. The Ambanis’ headquarters is near to the Gateway to India, the fading arch on the Arabian Sea that once was a symbol of imperial arrival but today seems a passage through which the new Indian industrialists look outward to the future.
“This is just the beginning of the change,” Anil Ambani said, speaking with a salesman’s manic zeal. “Somebody said it’s a watershed. Somebody said it’s spectacular. Somebody said it is unheard-of, and so on. I think no amount of adjectives is sufficient to describe this change. I’ve been in corporate life, after my graduation with my master’s from the U.S., now for roughly like ten or eleven years. In those ten years, I have not seen anything like what I’ve seen in the last six months. The change we are making today is the result of an understanding that India needs to be part of the global economy, and if we get left out now, we’ll have only one option—and that is to integrate with Burma.
“The collapse of the Soviet Union has tremendous implications for our politicians, at least in their thought processes. Another very compelling reason is change in Pakistan. It excites the Indian mind. You know, it lights a fire where it hurts. If Pakistan can change and if they can attract foreign investment and they can privatize banks and they can bring in foreign investment in the secondary market, the stock markets—well, we, India, are a great nation. We have the Taj Mahal. We have people who can do rope tricks. We have good curry. So you know, why are we getting left out? And so I think change in Bangladesh, change in Pakistan, change in Sri Lanka—whether you call it privatization or just the shedding of assets by the government—it has major implications.”
I asked him what it was like to take this spiel on the road to New York or Tokyo. How did it play? He answered with his best pitch.
“When the prime minister was recently in the United States for the UN meeting and he met with Mr. Bush in New York, next day on the front page of
The New York Times
was a huge photograph, and guess what it was about? It’s not about Mr. Bush meeting Mr. Narasimha Rao. It was sixteen people killed in Punjab. That is the normal association of India—Punjab, Kashmir, terrorism, poor people, rope tricks, flying carpets, these sorts of things. It’s nothing state-of-the-art. Nobody talks about eight hundred fifty million people, two hundred million people in the middle class.... There are sixty-two hundred listed companies in the capital markets, the second highest in the world after the United States. The language of business is English. We are net exporters of food, one of the largest seafood exporters in the world. We are the largest exporters of pepper in the world, second largest of sugar in the world. Nobody talks about these aspects. The industrial India is not what is exposed to the world, so you get very, very basic questions when you meet lots of people: Do you have roads? Do your phones work? Oh, you have a car. And I have experienced this myself. And senior people abroad have very little or no knowledge, and the only knowledge that they have is about strikes, riots, poverty.