Going to America

It requires neither genius nor a calculator to figure out that these trips hardly attract the investment they were meant to. And why would they? While some trips are well-intentioned (West Bengal’s Jyoti Basu), others are jinxed because even existing projects have yet to get off the ground (Maharashtra’s Manohar Joshi came when Enron was still hanging fire). Some are plain jokes (Bihar’s Laloo Prasad Yadav made a meal of it despite good advice and presentation from the Tatas) and some others are a cover for medical treatment (Karnataka’s Patel). Some don’t even wait to finish the trip. Gujarat’s Keshubhai Patel scampered back midway because his government was falling.

“The whole thing is a damn joke,” fumed a representative of a business organisation which usually bears the brunt of setting up meetings for the touring chief ministers. And Indian Embassy officials are no less miffed — even if a shade more taciturn. Typically, the embassy is put through the wringer for each visit. Faxes flow to and fro: mainly with requests about hotel rooms, limos, tickets. As one observer put it, come summer and the Indian Embassy turns into a travel bureau.

Few argue against visits to the West by Indian leaders and bureaucrats. If anything, say those who defend such junkets, such trips are needed to galvanise investment and explain and expose India to Western audiences. Fair enough. For instance, Basu’s trip here in 1995 was a landmark because American businessmen heard for the first time a Communist leader acknowledge that Marxism, as it was practised, was a failure, and his Communist State needed capitalist sustenance. Joshi’s visit that followed soon after served to demonstrate that the spirit of economic reforms have seized political parties at the opposite end of the spectrum.

But these visits largely served a symbolic purpose. They did not carry forward the idea of attracting investment to a closure. US businessmen say in the first place Indian delegations come with a poor idea of what exactly they want to do. They are poorly equipped in terms of presentation material, communication skills and focus. Follow-up is usually poor. In fact, the more recent chief ministerial visits do not attract any new investors. At most meetings, it is the usual suspects, those who have already put in some money and who want action initiated on signed projects.

The Indian delegations come here for a lark and are poorly prepared was starkly demonstrated during Karnataka Chief Minister J.H. Patel’s visit. After undergoing medical treatment in Pittsburgh, a visibly ill Patel suffered through several hurried meetings crammed during a 30-hour Washington stay. The team hardly met any new investors, signed no new deals and made no friends either as they painted the town with platitudes or waspish answers. Asked about the purpose of the trip, the chief minister’s principle secretary, B.S. Patil, said: “We have come here to consolidate our effort and assure existing investors.” The delegation also wanted to put out word about the forthcoming `Destination Karnataka’ investment conference in Bangalore. But surprise, surprise, even the dates for this global investment meet have not been firmed up.

Critics of such junketeering point out that leaders and politicians from other countries don’t embark on similar yatras. The Chinese, for example, “When was the last time you heard a Chinese provincial leader come to US? And they attract 25 times more foreign investment than us,” sneered an Indian entrepreneur who has been watching the parade of netas. “If we are really interested in attracting investment, we should stay at home and clear the projects already signed. There can’t be a better signal.”

Those words rang particularly true during Karnataka Chief Minister Patel’s visit. Even as Patel was mouthing platitudes at one meeting about India’s democracy and rule of law, Kartar Singh, a vice-president in the Cogentrix power company, stood chafing in one corner. The company’s power project in the State supposedly a fast-track project has been hanging fire for four years now. “They keep saying the project will be cleared soon. But the fact is even a Prime Minister from the same State could not give final clearance to the project. We are frustrated,” said Singh. Indian officials say Cogentrix now wants a revised Power Purchase Agreement because they want to hike tariffs because of cost overruns. With a four-year delay in kicking off, isn’t that natural, says the company.

Such delays are beginning to annoy American investors. On the same day Patel arrived in Washington, the Michigan-based CMS energy corporation, which has an ongoing project in Andhra Pradesh and is awaiting a word on several other investments, sounded an ominous warning. “We have decided to adopt a `show me’ attitude in India. We are going to cut back on our dollars till they show us some results,” declared CMS CEO Victor Fryling.

Indian officialdom — and indeed some politicians too — are aware of the problem. One Indian official who has been at the nerve centre of action laid the problem mainly on the politicians’ door. For one, he said, there is too much political instability. Governments and ministers are changing all the time and the same projects are having to be cleared twice and thrice. “Each time a new government or minister comes, they want to review the project… and bureaucrats get the bum rap,” he complained.

This official had an even more worrying point. Increasingly, he said, bureaucrats are beginning to adopt a cautious attitude because of the prevailing atmosphere of witch-hunt. In one instance provided by this official, a bureaucrat was apparently pulled up because he wrote three letters trying to hurry along clearance for a project. “The politicians accused him of showing undue interest in the project. How can anyone show enterprise under these circumstances?” the official asked. On their part, politicians accuse the babudom of being obstructive and mulish.

The truth, obviously is somewhere in between perhaps closer to the bureaucratic version. From all accounts, Indian politicians are too busy power (as in political power) mongering to pay any attention to the precipitous slide in interest in India as a business destination or galvanise the babudom. The loss of interest is becoming starkly evident during the visit of each successive business delegation. Fewer and fewer potential US investors turn up, and those who do are familiar faces with familiar problems. At an annual luncheon of the CMS Energy, an Indian journalist asked the same question he asked at last year’s luncheon: What was the status of the CMS project in India? The company’s top executive replied: “Same answer as last year. We are still awaiting final clearance.” Final clearance. That is turning out to be the Indian bugaboo.

Tips for a more productive trip