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Economy Jul 13, 2013

Why Chidambaram is the right man in the wrong party

By R Jagannathan

It was often said of Atal Behari Vajpayee that he was the right man in the wrong party - a liberal caught up in the right-wing Bharatiya Janata Party. We don't know that for sure, but the observation is probably truer of Palaniappan Chidambaram for the opposite reason - a right-wing reformer caught up in a hopelessly populist Congress party.

At Firstpost, this writer has often criticised Chidambaram for his half-hearted efforts at reform, but I must also acknowledge this is not the true Chidambaram. This is the only kind of reform we will get when a Chidambaram has the deadweight of the Congress party tied to his waist.

The truth is the Congress does not love doers and no-nonsense reformers like Chidambaram. It prefers incompetents, whether it is for the prime minister's job, or the home minister's or the finance minister's - as Manmohan Singh, Shivraj Patil and Sushilkumar Shinde, and Pranab Mukherjee proved to be. (To be fair, Mukherjee was a good administrator, but he had his image of a tinkerer working against him all the time).

 there's little doubt Chidambaram is competent. He is the best foreign minister India never had. The only question is: is he in the wrong party?

there's little doubt Chidambaram is competent. He is the best foreign minister India never had. The only question is: is he in the wrong party?

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Chidambaram is given the job only when the Congress party has no further incompetents to spare - or when the situation is desperate. He got the finance minister's job in 2004 in order to provide a counterweight to the Left whose support the Congress depended on - not because the party believed in his reforms platform. The party chief could also not have been unaware that Manmohan Singh and Chidambaram did not share a great equation - and so making him FM was a good counter-weight to Singh's reformist credentials too. The party then forced Chidambaram to do things he would not otherwise have done - like the farm loan waivers of 2008.

He got the Home Minister's job in 2008 after Shivraj Patil made a hash of it; he got the finance minister's job again last year after Mukherjee failed to deliver the goods (though, one must add, the party didn't give Pranab the support he needed for it). He has gotten the job of rescuing the economy only because the Congress party's situation is desperate. Once again, the party's calculations are purely political and not about the country. The party needs reformer Chidambaram in order to push through its economically dangerous Food Security and other bills. Chidambaram is the mukhauta behind whose mask the Congress can push bad ideas.

Chidambaram's recent airdash to Washington shows why he could have a made a success of the external affairs ministry as well.

In an increasingly interdependent world, foreign affairs is as much about economics as geopolitics. Chidambaram's Washington trip, reportedly to calm investor jitters over India's economic slowdown and the rupee's free fall, may have been a waste otherwise, but we have now seen yet another demonstration of his capabilities. In the current trip, he has done what Manmohan Singh and Salman Khurshid couldn't - effectively put India's case across to influential sections of the Washington elite.

According to a report in The Times of India today, Chidambaram showed up the US hypocrisy on economic issues for what it is worth. US businessmen have been raising a hue and cry over many issues - market access, protectionist barriers to US business, and violation of drug patents.

First, he pointed out that this was exactly what the US was doing. The US was making laws to restrict the movement of IT professionals, which was essentially a non-tariff barrier to trade in services.

Next, he pointed out that the fuss over compulsory licensing of Bayer's anti-cancer drug Nexavar was much ado about nothing. The US had commandeered ciprofloxacin drugs when it had its anthrax scare after 9/11. Moreover, against one case of compulsory licensing in India, Italy and Canada had done four, Malaysia three and Indonesia six.

Chidambaram and his team clearly put the Indian arguments across at a meeting of the US-India Joint Business council, and he is reported to have said that "business rivalries should not be brought to the political table."

According to the Times report, Chidambaram's officials drove the knife home when they pointed out that the US was ignoring the "elephant in the room" - patent infringements by the Chinese, who had also effectively taken all manufacturing jobs away from the US and the developed world.

The short point is this: there's little doubt Chidambaram is competent. He is the best foreign minister India never had. The only question is: is he in the wrong party?

by R Jagannathan

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