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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (2706)	3/19/1998 3:57:00 PM
From: Worswick	Read Replies (3) \| Respond to of 9980

What can we call this? A feast of fishhooks? A u-turn? For Private Use Only (C) Cabinet choices a double blow to investors By CHRISTOPHER KREMMER, Herald Correspondent in New Delhi India's new coalition Cabinet includes the country's most high-profile opponent of deregulation, and a leading market reformer has been left out. The inclusion in the 22-member Cabinet of the Samata Party leader, Mr George Fernandes, will be unwelcome in the West. He is a veteran socialist and labour leader, who led the campaign to expel Coca-Cola and IBM from India during his period as Industry Minister in the 1977-1979 Desai Government. Coke and other large foreign corporations have been encouraged to return to India since the drive for economic liberalisation began in 1991. The exclusion from the Cabinet of Mr Jaswant Singh is another blow to foreign investors. He is the leading proponent of economic rationalism in the Hindu nationalist Bharatiya Janata Party (BJP), which heads the 13-party coalition Government, and his omission ended an internal power struggle. Mr Singh is a close confidant of the new Prime Minister, Mr Atal Behari Vajpayee, 73, who fought to have him included. However, the mass organisation which backs the BJP, the Rashtriya Swayamsevak Sangh, favours economic protectionism and opposed Mr Singh's appointment, ostensibly because he failed to win a Lower House seat in the national elections. BJP sources said Mr Vajpayee may hold on to the Finance Ministry for himself until Mr Singh found a seat in parliament. Alternatively, the post might go to Mr Yashwant Sinha, the finance minister in the short-lived Chandrashekhar Government of 1990-91, when India first called in the International Monetary Fund at the start of its economic restructuring. He later switched to the BJP. The policy program unveiled by the BJP-led "saffron alliance" this week drastically watered down the more hardline swadeshi or nationalist clauses in the BJP's election manifesto. It said economic reforms would continue but with a "strong swadeshi thrust" - a contradiction which will have to be battled out in government. The BJP party president, Mr Lal Krishna Advani, confirmed he would be Home Minister, the number two post in Cabinet, responsible for internal security. Forty-three ministers were sworn in by the President, Mr K.R. Narayanan. Mr Vajpayee's initial team was larger than expected, due mainly to the need to accommodate his numerous coalition partners. Mr Vajpayee will face a confidence vote in the Lower House within 10 days, and is expected to win if a key partner in the previous United Front coalition, the Telugu Desam party, stays neutral.