Financial Daily from THE HINDU group of publications
Thursday, Mar 28, 2002
Industry & Economy
Foreign Direct Investment
The year of international salesman
KOCHI, March 27
TRULY, 2001-02 was the year of the international salesman. The year when the humble door-to-door salesman was vanquished and politicians and Chief Ministers of several States hit the road, touting their wares.
As increasing number of doors have been banging shut on his face, it has been a bitter year for the humble salesman. But the political chieftains of South India have elicited a far better response from the international market.
While the pitch of the sundry salesman had peaked by the end of the last century, it stuttered to a whine and has virtually faded out at the dawn of the new millennium.
The sundry drone of the list of wares has proved to be a little too much and too repetitive for the bustling housewife to stomach. As doors began to bang shut, the innovative salesmen and the mid-cap companies rose up to the challenge. And the `free campaign' was born and pursued with relish - `take a frock and get a hook free'.
It was into this new avatar of retail sales that the political leaders and Chief Ministers stepped in. Their ware was different. They were selling their own States in the global market.
Feverishly selling something that the domestic industry had tried to capture over the decades. But delays, red-tapism and corruption triumphed over the domestic industry's feeble efforts. So they banded together to form the Bombay Club and demanded a level playing field.
Undaunted, the politicians and Chief Ministers continued to pursue their international agenda. Taking a leaf from the sundry salesman's book, they sold their wares in the international markets. Cheap land, electricity, and water for the asking became the rallying cry from New York to New South Wales.
Not to be outdone, the irrepressible neighbour came out with the clarion call - single window clearance with a time-frame to boot. The Indian politician had come of age. The lucre was replacing Goddess Lakshmi even in the politicians' minds.
But that was not the end of the story. For every investment worth $10 million, sales tax will be waived for the first five years, retorted his neighbouring political chief. The `free campaign' was in and the lesson of the humble salesman stood the political tribe in good stead.
The domestic industry was aghast. The insurmountable fortress that they had tried to surmount over the decades was crumbling on its own. And foreign companies were being solicited with sops and freebies.
And successfully at that. While one Chief Minister played host to the President of capitalism, the United States, the Chinese Premier graced the table of his neighbour.
Amidst all these sharp exchanges, raucous cries and quid pro quo in the international market, one South Indian State stood out, impassive and serene - Kerala. Undeterred by the ebbs and flows of international capital into neighbouring States, the politicians of the State continued to do what they were best at: internecine warfare among rival groups.
International concerns are of no consequence for the State's politicians. Succession wars and dynastic rule are the major mantras of the most literate State in the country. The State where the whiff of foreign direct investment is most pronounced by its absence.
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