03-18-2004, 10:25 AM
<b>Tigers, termites and tenacity</b>
Mar 11th 2004
<i>As an election looms, Arun Shourie, India's privatisation minister, beats the drum for market reform</i>
Get article background
THESE are glory days for Arun Shourie. As the public face of the Indian government's privatisation programme, he is basking in the success of the Indian stockmarket's largest-ever public share issue. Its offer of 10% of the shares in ONGC, an oil exploration and production company, was the last of a hectic spate of six privatisation issues. The offering was fully sold within minutes, and when it closes on March 13th will raise some 100 billion rupees ($2.2 billion). This is a godsend for a government struggling to meet its fiscal-deficit target ahead of a general election on April 20th. Just as important for Mr Shourie is to see another lurch forward in India's erratic economic liberalisation.
The success of the sales matters. It will encourage boldness in other areasââlike drum-beaters bringing out the tiger,â as he puts it. It will also burnish Mr Shourie's reputation. Like reform itself, the minister has suffered his share of setbacks. One came last September, when the Supreme Court ruled that the privatisation of two state oil companies required a vote in parliament. This had the effect of stalling his favoured method of disposing of the government's assetsâselling control to strategic investors, rather than minority chunks to the market. At the time, Mr Shourie vented his frustration by saying the ruling showed the difference between India and China: âIn India, everybody has a veto.â
Mr Shourie was a well-known author and journalist before he was head-hunted into the unelected upper house of India's parliament by the Bharatiya Janata Party (BJP), which heads India's ruling coalition, in 1998. His last book, âCourts and their Judgmentsâ, complained about the way India's law courts have extended their roles, because of the shortcomings of India's other institutions. His next one will examine how the internal processes of government have come to resemble the termites that ate away at a tree in his garden, leaving little but a piece of bark that now decorates his book-lined ministerial office. It will draw on his experience of trying to practise what he used to preach as an economist at the World Bank, since he became minister of âdisinvestmentâ in 2001.
Mr Shourie likes to cite a study of the Kuomintang's China in 1936: âadministration degenerates into mere correspondence.â In India, he says, every file probably needs the signature of 20 senior civil servants, any one of whom can stop its progress. Take his struggle to sell a government-owned hotel chain. He found that not one of the 30-odd hotels in the group had the title deed to its lands. Demerging the company to sell the properties individually needed the consent of all the employees, who held 0.5% of the equity. Securing a list of its debts took six months. One Delhi hotel was embroiled in a 15-year lawsuit with another arm of government about its ground rent. Mr Shourie recalls his exasperated plea to his civil servants: âIt must be written in some bloody document.â
But he boasts of a tenacity nurtured in his days as a crusading editor of a newspaper known for its dogged pursuit of scandals. âI am a Graduate of the Indian Express; we exhaust the other fellows.â Victims of this persistence include not just civil servants and judges, but politicians. After about 20 parliamentary debates on privatisation in the past four years, the most recent were adjourned for want of a quorum.
As this implies, Mr Shourie sees the politicians themselves as obstacles to getting things done. âThe quality of many who people our public lifeâthat is not democracy, it is disarray, it is free-fall.â Yet he refuses to use India's democratic system as an excuse for the country's painfully slow pace of economic progress over the past 20 years compared with China. âGovernanceâ, he argues, âis not golf: that we are a democracy does not entitle us to a handicap.â
The pending tray
There often seem to be more stops than starts in the Indian reform process. But much has been achieved since 1991, when the old system of industrial licensing and import controls was overturned in favour of gradual liberalisation. The industries that form his other portfolioâcommunications and information technologyâare cases in point. The government's hands-off approach to the IT business has allowed it to become a world-beater. And in telecoms, liberalisation has sparked a boomâIndia is adding nearly 2m mobile-phone connections a month.
Yet even there, Mr Shourie is smarting from a setback: his failure in January to gain cabinet approval to open the telecoms sector to majority foreign ownership. He ran into resistance from a wing of his party that is suspicious of globalisation. Mr Shourie and other unelected economic liberals rely heavily on the support of the prime minister, Atal Behari Vajpayee.
Mr Shourie hopes that the next government will continue reformingâeven if Congress, the main opposition party, wins. Congress launched the reforms in government, but now often seems opposed to them. Everybody opposes reform in opposition, argues Mr Shourie, but in office, finds it the only option. The priorities now are to tackle the deficit, by cutting government subsidies, and to devise new formulae for the distribution of funds between states and the federal government. At present, non-performance is rewarded and success penalised.
But Mr Shourie is also known for his outspoken backing of many of the âHindu nationalistâ issues identified with the BJP. This makes him the object of much anger from India's Muslim minority. Mr Shourie, however, claims there is convergence here, too, as any party in power will have to âaccommodate itself to the diversity of Indiaâ. Those who fear the BJP's communal tendencies are merely in remission will find this unconvincing. More persuasive may be Mr Shourie's argument that the only way the BJP can win a consensus for its Hindu demands is to deliver efficient government.
http://www.economist.com/people/displaySto...tory_id=2498792
Mar 11th 2004
<i>As an election looms, Arun Shourie, India's privatisation minister, beats the drum for market reform</i>
Get article background
THESE are glory days for Arun Shourie. As the public face of the Indian government's privatisation programme, he is basking in the success of the Indian stockmarket's largest-ever public share issue. Its offer of 10% of the shares in ONGC, an oil exploration and production company, was the last of a hectic spate of six privatisation issues. The offering was fully sold within minutes, and when it closes on March 13th will raise some 100 billion rupees ($2.2 billion). This is a godsend for a government struggling to meet its fiscal-deficit target ahead of a general election on April 20th. Just as important for Mr Shourie is to see another lurch forward in India's erratic economic liberalisation.
The success of the sales matters. It will encourage boldness in other areasââlike drum-beaters bringing out the tiger,â as he puts it. It will also burnish Mr Shourie's reputation. Like reform itself, the minister has suffered his share of setbacks. One came last September, when the Supreme Court ruled that the privatisation of two state oil companies required a vote in parliament. This had the effect of stalling his favoured method of disposing of the government's assetsâselling control to strategic investors, rather than minority chunks to the market. At the time, Mr Shourie vented his frustration by saying the ruling showed the difference between India and China: âIn India, everybody has a veto.â
Mr Shourie was a well-known author and journalist before he was head-hunted into the unelected upper house of India's parliament by the Bharatiya Janata Party (BJP), which heads India's ruling coalition, in 1998. His last book, âCourts and their Judgmentsâ, complained about the way India's law courts have extended their roles, because of the shortcomings of India's other institutions. His next one will examine how the internal processes of government have come to resemble the termites that ate away at a tree in his garden, leaving little but a piece of bark that now decorates his book-lined ministerial office. It will draw on his experience of trying to practise what he used to preach as an economist at the World Bank, since he became minister of âdisinvestmentâ in 2001.
Mr Shourie likes to cite a study of the Kuomintang's China in 1936: âadministration degenerates into mere correspondence.â In India, he says, every file probably needs the signature of 20 senior civil servants, any one of whom can stop its progress. Take his struggle to sell a government-owned hotel chain. He found that not one of the 30-odd hotels in the group had the title deed to its lands. Demerging the company to sell the properties individually needed the consent of all the employees, who held 0.5% of the equity. Securing a list of its debts took six months. One Delhi hotel was embroiled in a 15-year lawsuit with another arm of government about its ground rent. Mr Shourie recalls his exasperated plea to his civil servants: âIt must be written in some bloody document.â
But he boasts of a tenacity nurtured in his days as a crusading editor of a newspaper known for its dogged pursuit of scandals. âI am a Graduate of the Indian Express; we exhaust the other fellows.â Victims of this persistence include not just civil servants and judges, but politicians. After about 20 parliamentary debates on privatisation in the past four years, the most recent were adjourned for want of a quorum.
As this implies, Mr Shourie sees the politicians themselves as obstacles to getting things done. âThe quality of many who people our public lifeâthat is not democracy, it is disarray, it is free-fall.â Yet he refuses to use India's democratic system as an excuse for the country's painfully slow pace of economic progress over the past 20 years compared with China. âGovernanceâ, he argues, âis not golf: that we are a democracy does not entitle us to a handicap.â
The pending tray
There often seem to be more stops than starts in the Indian reform process. But much has been achieved since 1991, when the old system of industrial licensing and import controls was overturned in favour of gradual liberalisation. The industries that form his other portfolioâcommunications and information technologyâare cases in point. The government's hands-off approach to the IT business has allowed it to become a world-beater. And in telecoms, liberalisation has sparked a boomâIndia is adding nearly 2m mobile-phone connections a month.
Yet even there, Mr Shourie is smarting from a setback: his failure in January to gain cabinet approval to open the telecoms sector to majority foreign ownership. He ran into resistance from a wing of his party that is suspicious of globalisation. Mr Shourie and other unelected economic liberals rely heavily on the support of the prime minister, Atal Behari Vajpayee.
Mr Shourie hopes that the next government will continue reformingâeven if Congress, the main opposition party, wins. Congress launched the reforms in government, but now often seems opposed to them. Everybody opposes reform in opposition, argues Mr Shourie, but in office, finds it the only option. The priorities now are to tackle the deficit, by cutting government subsidies, and to devise new formulae for the distribution of funds between states and the federal government. At present, non-performance is rewarded and success penalised.
But Mr Shourie is also known for his outspoken backing of many of the âHindu nationalistâ issues identified with the BJP. This makes him the object of much anger from India's Muslim minority. Mr Shourie, however, claims there is convergence here, too, as any party in power will have to âaccommodate itself to the diversity of Indiaâ. Those who fear the BJP's communal tendencies are merely in remission will find this unconvincing. More persuasive may be Mr Shourie's argument that the only way the BJP can win a consensus for its Hindu demands is to deliver efficient government.
http://www.economist.com/people/displaySto...tory_id=2498792