Saturday, 7 June, 2008

Karnataka and After

The Karnataka Assembly election results have been declared. As widely expected, the BJP has been able to extend its lead and reached the simple majority mark. During the election campaign, former Prime Minister HD Deve Gowda had said he would wait for the Congress and the BJP to approach him to help form the next Government. Since his help will not be needed by either party, it will be a long wait for him. Meanwhile, the exit polls, barring that of NDTV, have been proved wrong.
Away from India, the world is watching the fascinating political duel between Mr Barack Obama and Ms Hillary Clinton. It is a contest which both deserve to win. Mr Obama has an edge over Ms Clinton and if he wins the Democratic nomination, he may well win the presidential race as well. After all, the shadow of the debacle in Iraq looms large over the American electorate. This spoils the chances of Mr John McCain, the Republican nominee.
The war in Iraq was waged on false intelligence reports and had no connection with 9/11. The 'credibility' factor and the 'motives' of the Bush Administration in waging this wasteful war have bolstered the prospects of the Democratic Party in the American presidential election. Every leader who has supported the American war efforts in Iraq has been humbled -- whether it is in Spain, Italy or Australia. Even in the UK, Mr Tony Blair has been replaced by Mr Gordon Brown; worse, Britain's Conservative Party now has a huge lead over the Labour Party in the opinion polls. Several important by-elections over the next few days will be indicators of the future trend in Britain.
The economy after the sub-prime shock continues to give confusing signals. The middle class and the weaker sections in American society feel the ripple effect of high inflation. Unless a 'miracle' takes place over the next few months, Mr Obama and the Democrats are all set to prevail over Mr McCain and the Republicans. Similarly, in Britain, Mr Brown and the Labour Party may well make way for Mr David Cameron and his Conservative Party.
The elections in the US and the UK will be closely analysed across the world. Besides the presence of a sizeable Indian American voting population and the renewed interest in India about anything American, there are several Indian MNCs and individual investors who are keenly looking at acquiring businesses and personal assets in these two countries. Also, there exist traditional business partnerships. So, new policy initiatives of a new Administration are of great interest to the business community.
I believe the India-US nuclear deal will be clinched sooner than later. The Left parties will withdraw their support and demand a debate in Parliament. These parties will, however, not vote the UPA Government out of power. The RJD will support the Congress; so will the Samajwadi Party. As things stand today, the Congress and the UPA will go ahead with the IAEA and this in my opinion is good for the country.
We have excellent relations with the US. This will propel our business relations to a new level. I cannot understand why archaic Cold War arguments -- China and Russia have long abandoned this logic -- should affect our thinking on crucial issues. India is relevant today as it has emerged as an economic power with an eight per cent growth rate and a 300 to 400 million middle class base. Also, India has assets, between $80 and $100 billion, in developed countries. All these happened because we have successfully and confidently integrated the Indian economy with the international market.
There are issues that should not be subject to contradictions of internal politics. I think the India-US nuclear deal and development of resources in this direction are crucial for the country's growth in a global economy.
The Karnataka Assembly election results have clearly narrowed the psychological gap between the UPA and the NDA. We can expect a reasonable amount of political churning in the months ahead. Along with Karnataka, we have to observe the results in the four Lok Sabha and 18 Assembly segments in Andhra Pradesh. It will be important to see the performance of the Congress and the TDP in this State.
The southern States of Tamil Nadu, Kerala, Andhra Pradesh and Karnataka may well hold the key to success or failure for the UPA and the NDA, as they did in 2004. The Karnataka Assembly election results will not influence the electoral outcome in other States, but will start the crucial realignment process in southern States. Alliance structures in Tamil Nadu and Andhra Pradesh are far from final and many fringe players -- with small but important vote-banks -- will play a key role in the final result.
We may witness 'temporary' alliances on the nuclear issue and once this is behind us the focal issue will be the next round of Assembly elections in Madhya Pradesh, Rajasthan, Chhattisgarh and Delhi. Security and illegal immigrants from Bangladesh will be a major issue during the elections. Sadly, the security-related issues may well be lost as neither the NDA nor the UPA, or for that matter the Government of Assam, has done enough to stem the flow of immigrants from Bangladesh into this country.
The UPA and the NDA cannot take things for granted. In fact, both may be relegated to the background if regional forces increase their seats and sphere of influence. Political arithmetic is a complicated business, but if the Congress and the BJP fail to repeat or improve on their performance in the 2004 Lok Sabha election, or drop from their current level of 280 seats together to 225 or so, and if three or four regional parties form a group of 100 plus MPs, we could well be looking at a new arrangement at the Centre.

The Pioneer

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