Ready for Prime Time? Manmohan Singh's Reform Credentials Are Impeccable. but Does He Have What It Takes to Lead Vast India?
Moreau, Ron, Mazumdar, Sudip, Newsweek International
Byline: Ron Moreau and Sudip Mazumdar
The week began with a meltdown. As Congress Party leader Sonia Gandhi--fresh from a surprise election victory that ousted Prime Minister Atal Bihari Vajpayee and his ruling Bharatiya Janata Party from power--worked to form a new coalition government, India's stock markets went into free fall. Congress's prospective communist allies, who garnered a record 62 seats in the recent polls, had begun spouting leftist-party dogma that sent panic through the private sector. The Mumbai Stock Exchange shed 11 percent of its value--its largest one-day plunge.
Although regulators stepped in to halt trading, the market started to gain confidence only when a new rumor began to make the rounds: rather than take the post for herself, Gandhi was going to nominate Manmohan Singh as India's next prime minister. By midweek, when it was clear that the 72-year-old former Finance minister would indeed lead the new government, the markets had bounced back nearly to their pre-panic highs. "We know he'll take the economic-reform process forward," says top Indian industrialist Adi Godrej.
Will he? No one doubts Singh's credentials as a reformer. He's served on the board of governors of the International Monetary Fund and held the top two economic posts in India--head of the Reserve Bank of India and Finance minister, during which time he engineered the country's initial liberalization. "He is not only one of the most decent persons," says Somnath Chatterjee, a senior communist leader. "He is one of our most knowledgeable economists." But the Oxbridge-educated Sikh professor has shown no taste for the rough-and-tumble of Indian politics; he's eligible for the prime ministership only by virtue of holding a seat in the Legislature's upper house, an indirectly elected position. (The one time that he did run for a seat in the lower house of Parliament in 1999, he lost.) The question is whether he will be able to strong-arm the leftist parties who are likely to oppose his more ambitious reforms. Asks one sympathetic, top government official, "Can the mild-mannered Singh play political brinksmanship when necessary?"
That brings up another, perhaps more important question: does he need to? In all the press conferences and photo ops announcing his ascension last week, Singh stood side by side with Gandhi, who will remain the Congress party leader. The back and forth over whether she would accept the prime ministership herself last week both acknowledged the level of opposition to the Italian-born widow--and underscored the depth of support for her as the accepted heir of the Nehru-Gandhi dynasty. Congress M.P.s greeted her decision to step aside with quite sincere cries of protest. "By turning down the top job, Sonia instantly elevated her stature and wiped away any criticism [of being called power hungry]," says a Congress party member.
Certainly her move has defanged the opposition BJP, which had hoped to revitalize its Hindu nationalist base by railing against her foreign roots. Singh is considered to be a man of such integrity that even BJP leaders--moderates and militants alike--were obliged to welcome his promotion. The party cannot simply revert back to its fire-breathing, anti-Muslim rhetoric: it lost badly in the state of Gujarat, where a BJP-led government was accused of complicity in the massacre of Muslims in 2002, and it was BJP leader Vajpayee who initiated the current, and quite popular, rapprochement with Pakistan. …