What is the fix for India?
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One of the good things about the recently concluded elections to five state assemblies is not the decisive victory of the Bharatiya Janata Party (BJP) in Uttar Pradesh. In general, leaders do not take risks to do the right things from a position of strength and the BJP is strong now. They do so from a position of weakness, when their backs are to the wall.
But what is decisively good, as several have noted already, is that the people of Punjab looked into the abyss and turned back. They did not choose to empower a political party that sought to play the game of radicalism and schisms in a sensitive border state. The challenge for the national parties that have won in the five states—the Congress came close to forming the government in Goa and Manipur—is to use the mandate to advance the national agenda. Are they up to it?
Well, it happened in Mexico between 2012 and 2014 after its current president got elected. This and a few other interesting stories are featured in “The Fix”, a collection of leadership achievements from around the world, chosen and narrated by Jonathan Tepperman, editor of Foreign Affairs.
It so happens that the selection by Tepperman features only male leaders. The chosen leadership interventions—“pushing those in charge to set aside ordinary politics and conventional policymaking and to think big”—had come in crises. That has always been the case and it is universal.
India had a similar opportunity in 2014 but leaders in the BJP did not think that they had inherited an economic crisis. Inexplicable economic growth numbers, including upward revisions for UPA (United Progressive Alliance) years, have diluted the sense of crisis and the urgency of addressing it. Other countries were luckier. Their leaders grabbed the opportunity.
One of the remarkable stories is that of the “pact” that the Mexican political leadership achieved, paving the way for unprecedented legislative reforms in a wide range of areas. The NITI Aayog that organized a couple of lectures as part of its Transforming India series for government leaders should invite the current president of Mexico for the third lecture.
Charismatic Enrique Peña Nieto belonged to the Institutional Revolutionary Party (PRI) which had ruled Mexico for a very long time before ceding power to the opposition and had made a comeback in 2012 with a narrow margin of victory. All the political parties realized that they had to do something to change the script of mindless confrontation. Interestingly, PRI had to prove that it had learnt its lessons from the wilderness it had endured for 12 years from 2000 to 2012 and the opposition parties felt that they had to recapture the confidence of the people so that they could be trusted to govern again, if the need arose. What followed was extraordinary.
They met on a daily basis for about six months or so from July 2012 and negotiated a “pact” of legislative and other policy reforms that they could agree on. It was not smooth sailing all the way through. Many in the opposition accused the negotiators of selling out. Some suspected the good faith of the ruling party that had a bad history of governance in its 71 years in office up to the year 2000. But, even as the circle of participating individuals in the negotiations expanded, the talks remained confidential. That lent credibility to the process. Then, the president announced the negotiations and the conclusion of the “pact” in December 2012.
In the next year and a half, the country proceeded to announce some “eighty-five far-reaching changes (generally with 80% legislative support) in several areas such as education, banking, anti-trust and elections as well as to the criminal code and transparency standards; they even increased tariffs on junk food to fight Mexico’s fast-growing diabetes epidemic”. There was no sequencing of needed changes. They were pursued in parallel.
It was not as though the process was not in danger of being derailed. The president proved equal to the task at least on two occasions. They bear the stamp of a leader who could transcend his own party pressures and, more importantly, his and others’ egos. First, he announced policy changes in areas that were the priorities of the opposition before that of his own party. Second, when the opposition alleged foul play by the ruling party in a local election somewhere, the president cancelled a scheduled press conference, fired those responsible and then did something more. He “attached a provision drafted by the opposition PAN (National Action Party) to the pact that reinforced political reforms by extending term limits; created a new, more powerful election monitor and imposed stricter rules on campaigns”.
In the last two years, Mexico has been buffeted by a crash in the global price of crude oil and other scandals have marred the presidency. But the legislative changes remain and will help Mexico shine when favourable conditions return. In the meantime, India’s political leaders—not just in the ruling party—should reflect on what Mexico’s equally fractious political system managed to achieve and on whether they have it in them to emulate them. They do not have to look too far for an opportunity to demonstrate their maturity. The issue of how to extricate the Indian banking system from the crisis of non-performing loans is the best place to start. Nation over the next election. The choice is clear.
V. Anantha Nageswaran is the co-author of Economics Of Derivatives And Can India Grow?
Comments are welcome at firstname.lastname@example.org. Read Anantha’s previous Mint columns at www.livemint.com/baretalk