Since 1998, Atal Bihari Vajpayee has guided India's fractious government with a deft hand. The affable, avuncular Prime Minister has quelled rebellions by wayward partners in his 24-member coalition, keeping his Bharatiya Janata Party in power. But on July 29, Vajpayee's abilities failed him as a vicious spat between two state governments reached an impasse in Parliament. Mamata Banerjee, a key coalition ally, demanded that a regional headquarters of Indian Railways remain in her state, Bengal. Vajpayee called for a compromise, but BJP hard-liners, led by Deputy Prime Minister Lal Krishna Advani, rejected his appeal and sided with neighboring Bihar in the stand-off. Advani, it appears, was making his mark. "Who is the real Prime Minister?" Banerjee asked bitterly. "It seems the office has been hijacked."
Banerjee isn't alone in sensing a power shift in New Delhi. Since late June, when Vajpayee elevated him to the newly created post of Deputy Prime Minister, the 74-year-old Advani has made many decisions normally reserved for the Prime Minister, from resolving the railway dispute to the appointment of a negotiator in the troubled northern state of Jammu and Kashmir. "He is the man calling the shots," says Swapan Dasgupta, editor of the news magazine India Today.
That could mean a drastic shift in policy. A bitter refugee of the partition of India and Pakistan, Advani has a reputation as India's biggest hawk and Hindu ideologue. In 1990, he led a Hindu revivalist movement whose adherents tore down the Babri Mosque in Ayodhya. In the ensuing riots, hundreds were killed, and India suffered grievous psychological and international damage. But Advani's image within his flock soared. Now, with Advani's rise, "Hindu fundamentalism is coming to the fore, and its champion, Advani, is running the government," laments Surjit Bhalla, a former World Bank economist and now New Delhi-based manager of the Oxus Fund.
That's making many foreign investors nervous. Already this year, Hindu-Muslim riots in Gujarat, India's most heavily industrialized state, have killed 1,000 people and led to business losses of at least $200 million. Advani, home minister at the time, was unable to stop the killing: Many wondered whether he really wanted to. The investment community is likely to pull back if Advani becomes Prime Minister and India abandons its secular principles. Foreign investors "don't like a hard-liner Hindu at the helm," says a Bombay analyst of a U.S. mutual fund. Advani declined requests for an interview.
There is a practical side to Advani, however, that may yet prove a check to his most radical impulses. Some Indian businessmen insist, for example, that Advani won't be so bad for the economy. He approves of India's ambitious privatization program, and in June he supported a move to allow foreign investment in print media. In 2000, as a member of the cabinet committee on investment, Advani backed liberalization of the insurance industry. And he is close to U.S. Ambassador Robert D. Blackwill, with whom he often meets privately. Still, Advani's uncompromising views give pause to many, especially in a multiethnic country where politics profoundly affects investment.
The key question is how this Hindu radical will fare in Kashmir. The aging Vajpayee has given him India's toughest job: ensuring free and fair elections this fall in the war-torn state. To succeed, Advani must persuade all factions--including separatists and militants sympathetic to Pakistan--to run in the election. He'll need to muster a turnout great enough to give the poll legitimacy. To win over the Kashmiris, he'll probably have to make huge compromises--something Advani has shown little inclination to do so far in his political career--and adopt a more inclusive vision of India. And when he's done in Kashmir, Advani must tackle similarly prickly elections in Gujarat. "He won't make it to power without being more tolerant," says Ashis Nandy, director of the Center for the Study of Developing Societies in New Delhi.
Advani knows this and has taken some steps to moderate his image. In early July, for instance, he opposed a BJP plan to divide Kashmir along religious lines. In its place, he sent his emissary to negotiate a plan for greater autonomy. That's a promising sign. Advani's a hard-liner, but he's also ambitious. Maybe, like Vajpayee, he'll yet realize that the path to real power lies through compromise. How well he learns that lesson could determine India's future and his own.
By Manjeet Kripalani in New Delhi
Get BusinessWeek directly on your desktop with our RSS feeds.
Add BusinessWeek news to your Web site with our headline feed.
Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video.
To subscribe online to BusinessWeek magazine, please click here.
Copyright 2002, by The McGraw-Hill Companies Inc. All rights reserved.
Printer-Friendly Version
