Terror could derail India's economy

When an American businessman recently asked me at an event in New York whether the Indian Government could contain the scourge of terrorism that is afflicting India, particularly after the recent epidemic-like bomb blasts, I knew that this was no ordinary law-and-order question.

The question was aimed to ascertain the safety and viability of long-term investments in a country which, despite being an attractive investment site supported by a huge market and highly skilled human resources, is perilously drifting towards the sharp rocks of instability with politicians and security experts failing to stop terrorist acts that are causing nationwide grief. And alarming many foreign investors and businesses who are, otherwise, bullish about India.

My American interlocutor was amazed that many Indian politicians were merely trading barbs with each other instead of coming together in a show of national unity, and effectively cracking down on the terrorists who were killing innocent people. The perpetrators seem to be emboldened by the attitude of Indian politicians who do little except recite their usual platitudes of condemnation.

Americans privately express shock that Indian politicians display a lackadaisical attitude by not pro-actively cracking down on the perpetrators of carnage because this would cost them minority votes, the so-called "vote banks". But what good is a vote bank when the entire nation stares in the depths of an abyss?

Indians are outraged by their politicians' deviousness; indeed, there are also many in the minority community who are alarmed that the senseless killings of innocent lives in the name of religion could easily trigger off communal riots reminiscent of the Gujarat in 2002.

Indian industrialists, though refraining from making any public comments on the proliferating acts of terrorism, privately voice their fears that India's ability to attract long-term foreign investments with sustainable impressive economic growth rates could be undermined if terrorism is not quickly and effectively contained.

Golden opportunity

India, they say, would miss out on a golden opportunity, particularly because the traditional Western investors, frustrated by their experiences in China, do not want to put all their eggs in the China basket. Vietnam, Cambodia, Malaysia, Thailand and Indonesia are vying against each other to cream off some or all of that investment if India failed to stop terrorism.

This would be a big comedown for India which, once, touted itself as an "oasis of stability" in a region notorious for political instability and mayhem caused by an unending cycle of violence.

The recent meeting in New York between Prime Minister Manmohan Singh and Pakistan's newly elected President Asif Ali Zardari, may have gone off well but it remains to be seen if Zardari will be able to control Pakistan's army, which generally loathes civilian politicians, and dismantle the terrorist outfits inside Pakistan that operate against India.

Should the fragile situation in Pakistan, however, get out of control in a year or two from now, as many strategists predict, the Taliban, which seems to be spreading its influence in Pakistan, could carry out its nefarious acts in India through the Indian cells. The old turf of Afghanistan is no longer the confines of the Taliban which now wants to spread its wings beyond Pakistan to India.

The unrest in Kashmir and the perpetrators of the growing incidents of terrorism in India could serve as a catchment ground for recruitment by the Taliban. Experts say that the Taliban's goal is no longer to merely set up a Pashtun Islamic state, encompassing eastern Afghanistan and western Pakistan. Indeed, it wants to extend its influence to the neighbouring region, including India, where it can exploit the Kashmir unrest and the disgruntled members of India's otherwise peaceful Muslim community, the second largest in the world, for recruitment.

Containing terrorism is as vital for India's economic development as other factors such as sourcing raw materials, building infrastructure, etc. Terrorism is the multi-headed hydra which Indian politicians must urgently slay if India is to continue with its economic development and the fantastic growth rates it has been achieving in the past.

Indian politicians of all colours must join hands to take a tough and resolute stand to put an end to the scourge; this alone will send the right message to foreign investors and businesses, besides telling the outside world that India is not a banana republic run by inept and greedy politicians pursuing their vested interests.

Manik Mehta is a commentator on Asian affairs.

India has always tried to cope with the growing demand of infrastructure for businesses but unfortunately it is the politicians (ruling or opposing) that stand in the way of achieving its short term goals...having been born and brought up in India. there are a lot of things that the Indian government needs to take a stand on but unfortunately this would mean upsetting its opponents and then losing its ministers...Currently the attacks on Christians all over India have not been taken to task. when a country has internal issues how can it concentrate on competing in a global economy?
Lester
Dubai,UAE
Posted: October 05, 2008, 11:41