Wednesday, August 27, 2014
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Ajay Raju on new India leaders: Pressure for progress

Philly law firm chief Ajay Raju expects Modi the businessman to win over Modi the ideologue

Ajay Raju on new India leaders: Pressure for progress

Corporate lawyer Ajay Raju, co-chairman and CEO of Philadelphia´s Dilworth Paxson LLP law firm, at the Union League of Philadelphia. (Alejandro A. Alvarez / Staff Photographer)
Corporate lawyer Ajay Raju, co-chairman and CEO of Philadelphia's Dilworth Paxson LLP law firm, at the Union League of Philadelphia. (Alejandro A. Alvarez / Staff Photographer)

For other views on India's pro-capitalist, Hindu-nationalist new leader, see comments from Holtec CEO Kris Singh, who says Narendra Modi's victory will boost Indian business, employment and opportunities for closer cooperation with the U.S., and from Penn professors Ania Loomba, Suvir Kaul and Toorjo Ghose, who are discouraged by Modi's record on development and minorities.

"This election will have ripple effects in Philadelphia and the world," says Ajay Raju, co-chairman and CEO of Philadelphia's Dilworth Paxson LLP law firm, of last week's convincing victory by pro-capitalist state minister Narendra Modi and his Hindu-nationalist Bhatirya Janata (Indian People's Party, BJP), over India's long-ruling, secular, big-government Congress Party.

"Multiple transition points are identified with this election," Raju, a prominent booster of both Philadelphia, where he's been meeting lately with Comcast and investment executives to back local start-ups, and of his native India, told me as India's stock market soared on news of Modi's victory last week. "This was an absolute mandate," with Modi's BJP winning more than a voting majority in India's normally factional parliament: "The BJP has a mandate to carry forward Modi's agenda." More from Raju below:

What is Narendra Modi's agenda as India's likely next prime minister? We know that Mr. Modi is a believer in small government. We can expect that he will do something about the corruption which killed the Congress party over the last 10 years, along with (Congress') lack of leadership: they were a legacy party built on dynasties, the Nehru family, the Gandhi family, (whose current leader Rahul Gandhi) came across as a reluctant leader. 

More coverage
 
Holtec's Kris Singh praises Modi election as aid to U.S.-India development
 
Indian profs at Penn ask of new gov't: 'What capitalism, what religion?'

Isn't Modi also a polarizing figure? He was denied a U.S. visa by the State Department, which cited Modi's failure to stop or punish Hindu-led riots that killed Muslims in the state Modi governs, Gujarat -- though Obama has now invited him to the White House as the Indian people's choice. Raju: He either knew about the 2002 riots, or did nothing to stop it, like (NJ Gov. Chris Christie and the infamous political-retribution traffic jams at the George Washington) Bridge. But this was a vicious riot. A thousand people died. Since then he has not done anything to bring the people together.

What impact has Modi's party had on the state he runs? He has helped Gujarat become one of the most prominent regions. Many Gujaratis are overseas, and they helped bring some of those investments back.

Nationally, they did a very good job of getting voter registrations. They included 100 million new voters, and that gave them a leg up. They were much better at social media, compared to the Congress party. They focused social media on the corruption of the Congress party.

And young people came out to vote. They are not tied to post-colonial loyalties. They know about Congress Party (founders Nehru and Gandhi) mostly through the history books. Like young people today might know about JFK and RFK, it's a faint memory. The dynasty doesn't have the power it used to. Young people are more democratic, less feudal. You see the power shift of the status quo.

The new breed of loyalists are more corporate-focused and more economy-focused. That's similar to the way Modi ran Gujarat.

Why the hunger for new leaders? India had been chugging along with 7 percent annual growth for several years. But suddenly it dropped to 4 percent last year. In the U.S., 4 percent would be bullish. But in India or China that's similar to being in a recession.

And India ranks just 60th on the World Economic Forum list for 'Competitiveness'. China ranked 29th. World Bank ranks India 134th in the world for 'Doing Business'. For 'Starting a Business,' 179th. They might as well not be in business. So those are the main ingredients of what (supporters hope) should change.

What does business expect from Modi, and who has reason to be afraid? Secular liberal India, some people, should be worried about whether this will stifle the civil liberties of the Muslim population, the Christian population, anyone other than the Hindu nationalist agenda.

But Modi is also someone who knows how to attract business. He's not going to allow a 'Taliban for Hindus'. He'll want a less corrupt government, with a lot of gravitas, to bring the economy to the next level.

He's a darling of the stock market. Stocks are up 20 percent since the election results. They want new levels of growth. They want him to be similar to what Deng Xiaoping was in China, who started national reforms.

Modi also could be authoritarian, like Deng was.

The best scenario is that Modi will continue to be a darling of the financial markets and have the best interests of Muslims and Christians forward also. He could be a visionary like Singapore's Lee Kwan Yew. Not as harsh (as Deng Xiaoping).

He has the mandate to do this. He could do it. Whether he will do that, or push the Hindu-nationalist ideology, we will see.

This has happened before, sort of: BJP also came to power in 1999 (until 2004). Prime minister (Atal Bihari) Vajpayee was the leader of BJP, a party which came to national prominence as a result of the riots in Ayodha – communal conflict which is similar to what you see in Israel, fighting over things that might have happened centuries ago.

Ayodha is the birthplace of Lord Rama. (Muslims later built a mosque there, displacing a Hindu temple; Hindu activists tore down the mosque; the riots followed.) And people have been killing each other over that, and politicians have taken advantage of that for political purposes. It was symbolic that Modi, from Gujarat, also (ran for office) from Varanasi (another holy site for Hindus). Hindutva (Hindu nationalism) has become an ideological battleground over national elections in India, and it could derail Modi and his government if ideology trumps sound economic policies.

Which is more likely to predominate, Modi the capitalist, or Modi the Hindu-nationalist? I'm a pragmatist and an optimist. I would like to see the BJP as it was in 1999, focused not on ideology, but on how to open markets. 

I think today, because China is advancing faster than us, due to the lack of ease of doing business in India, I think they will focus on that first. Get the economy chugging again. You can't get a global audience to invest in India if you have a civil war, an ideology battle. It would be like having a President here in the United States, who was an isolationist, closing off this country as China invests all over the world.

As isolationist U.S. candidate Pat Buchanan and some others were arguing for in Reagan's day -- Exactly right. Or the way China slept through the original Industrial Revolution, because of its policies. There were no steam engines in China for many, many years, because the country was isolationist.

I expect Modi is aware of history. He'll keep his ideology in check. Government is different from talk at the dinner table. (End of Ajay Raju interview.)

Since posting this item about the Modi election last week -- and linking it to my story last year about Wharton inviting Modi to speak online, then un-inviting him after Indian scholars protested, and losing the support of Indian corporate donors sympathetic to Modi -- I've begun to hear from Indian professionals reacting to the election. For example, Sreekanth Nair, a New York-based software engineer who has also worked in London, San Francisco and Bangalore, writes:

"It is good to see some news finally on the mainstream US media, whose coverage on India election has been conspicuously absent.

"The Indian electorate has given Modi an overwhelmingly massive mandate to rule for the next 5 years, which means the decisionmaking for huge infrastructure projects will be very smooth and fast. Less red tape. (As when BJP ruled in the late 1990s-early 2000s, Nair added).

"He may give importance to domestic manufacturing. Since BJP has (a majority in the Indian parliament), the influence of the regional parties will be less when it comes to governance, which is good. They normally causes a damping effect and a drag in executing projects.

"People in India now think the advance in India-US relations created by (President George W.) Bush is being offset by the Obama administration," which is perceived as tilting more toward Pakistan.

"(Modi) is probably going to move closer to China and Russia, unless the U.S. does something positive very fast. Democrats has developed a myopic vision on BJP and Modi," which Nair suspects is due to lobbying by Muslim-majority Pakistan and its allies. "As a nation India never invaded any foreign country in its 5000-year-old existence which implies a peaceful population by design," Nair added. 

"I am neither a Modi fan nor a BJP supporter. I voted for a different party last time. But I am impressed with his vision. Totally impressed when he announced building the world's largest statue in his state, twice the size of Statue of Liberty, because India hasn't witnessed such a massive project (since) the Taj Mahal was built, in the 1600s."

 

 

 

Joseph N. DiStefano
About this blog

PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

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