Indian Elelctions 2009 - Part 2

India has learnt to reward performance in civil administration.

A great great job by the Indian government in organising safely and efficiently this massive democratic exercise. A 1 billion strong country voted, and the results announced yesterday give a clear direction of a stable government for the next 5 years.

1. We will be investing in the Indian stock market tomorrow.
2. The results surprise us a little, but give us so much more optimism.

At preliminary analysis, the three national level parties (The BJP/ COngress and the Left) have put together returned with the same number of votes as the last election. The left, although touted as a "national party" is strong in the states of W. Bengal an Kerala..with a few pockets of visibility across the country.

So the Indian middle class, which votes basically across these three parties kept to expected lines. There was s shift from the BJP and the Left towards the Congress which saw the Congress emerge as the single largest party with 201 seats, its best performance in 25 years.

The BJP's right wing agenda was rejected and the Left's left wing agenda was taken down. The Centrist Congress collected handsome riches.

The total victories of the regional parties remained the same as last year, but we see some interesting trends:

- In states such as Bihar (tradionally very backward, but making economic gains in the last 5 years), the voters have voted for the incumbent's track record of good governance and development. In Bihar, the incumbent has gained votes across caste and community lines. We believe this is also because (and we will try to get some more data) parties have fielded candidates that represent various caste/ community and religious sentiments.

In the past, political parties could also be defined by a community as the majority of its members belonged to a certain community. This gave advantages in terms of winning votes of a particular community, but being closed to others. Hence the rise of fractured politics in a number of areas in India. The recent elections have shown political parties including within their folds, greater representation of the diversity of the communities they govern.

This means that:
1. if governance has been good, it makes it easier for the population to vote for the party through a candidate it is comfortable with.

2. That if the governance has not been good, the local population can indeed find alternative political parties tat are fielding candidates that represent at the basic minimum, the community of the voter.

This allows us to rationalise what has happened in another "under-developed" state- Uttar Pradesh, which is a close neighbour of Bihar.

Here, it has been widely felt that the state government was corrupt and inefficient, but has been voted in the previous elections on the basis of the caste and commnity equations it had correctly identified.

Lack of development meant that people wanted to find an alternate political party.

Each of the alternatives that gained (including the Congress) clearly had learnt lessons from the past and fielded candidates that closely represented the communities from where they stood.

This voting on community lines is what we are afraid of. But in this election, this issue was SECONDARY. The fact is that, largely the Indian voter voted for good governance. Where the local party had been governing well and developing the state, the party was voted for.

This bodes very well for the future. re-election will depend on good governance. At city, state and country level.

India has learnt to reward performance in civil administration.

We are hopeful and optimistic for the future.

Our broker will be a happy man tomorrow morning.

Ritu and Venkat

Indian elections 2009

Its the day the results will be declared. The 1 Bn strong jury will of course come out with a split decision. Today we will know exactly what.

There should be no surprises. India will once again be governed by a coalition. In a note we wrote after the Nov 11 attacks in Mumbai we argued that politics in India is multifaceted with "national level" issues having a limited impact on elections and hence creation of governments.

The outrage after the Nov attacks took maybe 80% of Air Time on all news channels, but move away 150Km from the big cities, and people were already too far from Mumbai.

We believe, India votes on three philosophies.

A. The rich, well educated "elite" is largely a cynic. These folks have perhaps the lowest turnout. They don't care (anymore). They believe that any government formed will be just as inefficient. They want business to thrive and their well paying jobs to be secure. "Government, get out of the way" is the motto.

India will not go the socialist way anymore. The performance of the finance and commerce ministries are extremely critical for any government to have a semblance of functioning. Hence, no matter who wins, governments ensure that the F and C ministers will be the best available candidates. That's all the "upwardly mobile" Indian expects from the govenrment. "Get out of my way, make F and C work". The real work will be done by the bureaucrats of the Indian Administrative Service, so most ministers do not matter.

B. Then there is the middle class, which was made of mostly employees of the government sector. These folks, we believe always voted for the Indian National Congress, but found a choice with the emerging right wing Bharatiya Janata Party (BJP). The middle class voter (the ones we have known all our lives) rarely ever change their voting habits. It took the BJP many many years to enter the national debate. We do not see a third "national party" anytime soon. So the choice is one or the other.


C. And then , the rural voter. Largely farmers, but more and more people involved in the manufacturing and rural service economy.

These folks, mostly, vote by familiarity. Familiarity of community. There are about 3000 communities in India. Each community is seeking its own voice and this is causing extreme fragmentation of the vote bank at the rural level.

Indeed the two main parties- Congress and the BJP have been facing this vote bank fragmentation not in the cities, but in the rural areas- where community based voting has found a very strong foothold. Promises of more subsidies and fair "representation" of community leaders takes predominance over national level issues.

Caste and community, being seen as easier ways to get elected, means that the current lot of rural politicians does not have to focus on development. Subsidies will do. Perhaps, the trickle down effect- and increasing awareness will change this equation. But it will take time. The "minorities" have only recently found voice (maybe in the past 4 elections), so they will want to cherish if for a while longer, before giving up their interests before broader national issues.

The last Indian government was a coalition of more than 20 parties. We would be surprised if today's results threw up a small coalition.

But if the past 5 years have been any indication, we (of the cynical "government should get out of the way" class) should look forward to some robust growth in the next 5 years.

Ritu and Venkat

Plus ça change, plus c’est la même chose!

The more things change, the more they stay the same. It’s a French saying and I am forced to apply it to India post the Mumbai terrorist attack of last week.

Sure, some people have lost their jobs, noticeably the Home Minister. Of course, the fact that the portfolio goes to P Chidambaram (the current finance minister) speaks volumes of the paucity of efficient and competent ministerial candidates in the country. The finance ministry comes under the PM as “additional charge”. Wow!

But the fundamental problem remains the same. The great Indian divide. Between the cities and the rural masses.

Every news channel is highlighting the anger on the streets of Mumbai. But Mumbai is 18 million people. (Or 1.4% of India’s population).

Can these angry people change anything?

Well, let’s add to this another 100 million people living in India’s top 30 cities.

Does this change anything? A bit more, but not much more.

The real India is still in the villages and small towns. What is the sentiment of the “common man” living 100 kilometres from Mumbai? Has the tragedy been communicated to that common man? He may have seen the live coverage, but does he really understand his country was under siege? In his green farms, does he see the threat of terror? Or only the threat of being marginalised by another caste?

What is the sentiment of the man living 500 km and 1500 km from Mumbai? I don’t know that. The media hasn’t focused on it. And we seem to think that a few million angry Mumbai residents will change the course of politics in the country. Impossible.

The anger on the situation must spread. Unless the common man, far removed from day to day Mumbai life, is affected, nothing will change.
Because India’s common man, surely is voting for his own interests. Based on language/ caste/ sub caste… he wants his representative to find him his daily bread. A terrorist who is not striking in the villages of Uttar Pradesh is not enemy number one.

Unless media uses radio and road shows to take the problem to the common man across the length and breadth of the country, majority public opinion will still be far removed from Mumbai.

Is the media trying to do that? No way.

The heart of India is in the rural areas. Where the urban do not venture anymore.
This is a tale of two Indias. And I am willing to bet that 5 months from now when we head to the polls, the tragedy in Mumbai will be a very distant memory for 90% of the population.

Venkat.

Nicholas D. Kristof: Obama and the war on brains

http://www.iht.com/articles/2008/11/09/opinion/edkristof.php

The one above from Nicholas is an amazing yet obvious insight. In India, politicians are corrupt. Mostly. But the Prime Miniter has always been intellectually strong. Mostly.

With the emergence of Bush and his defeating Gore, most of us really gave up on the need for intellectual leadership as one of the criteria for American presidency. The Amercian "common man" it seemed cared nothing of intellect, as long as he got his beef, corn and well oiled rifle.

But the participation of the youth has changed this. Youth that have access to information and have a medium for making themselves heard. 24 X 7. From the comfort of their rooms. Just out of college. Who would like to believe that they have the right to asking intelligent questions and be given intelligent answers. They want to believe that change for the better comes from them. (this may be naive, but it gives change a chance)

Never before have young people been so engaged in an election. People, it seems, saw through Palin very quickly. The internet and the right to a good education will change the way leaders will get chosen. There is no doubt about it.

What we will see next is the use of the internet in other western economies which have a high penetration of the internet. Western European elections of the near future will be influenced. (I wonder why Gordon Brown has still not activated the web?)

The US election and the rise of Obama must be taken as a catalyst by all those people that are tired of being condenmed for their intellect. Strong intellect should not mean "lack of touch" with the common man. It should mean the ability of the leader to understand better the problems of theb common man and to build better solutions.

We hope Obama succeeds. (whatever that may mean). Because the rise of intellectual political leaders in the future will gain a lot of momentum from his successful presidency.

Ritu and Venkat