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Profile of Kamal Nath, Indian Commerce and Industry Minister

Published by The Straits Times, Singapore on 2004-06-12

NEW DELHI - Mr Kamal Nath fairly exudes energy. A trim 54-year-old man who wears his hair fashionably square-cut, his days begin before dawn with yoga and meditation. Then a succession of meetings and discussions demand his presence around this crowded capital city, from government buildings to political party offices to embassies to the boardrooms of industrialists. People drop by his own office, often without appointments but because he's known to be accessible. Most days he returns home well after midnight, but doesn't get to bed before he's devoured a mound of files from his office.

He works hard, says Mr Nath, a scion of a wealthy business family, because much is expected of him.
"Yes, of course I'm under pressure to perform," he told The Straits Times in an interview at his office in Udyog Bhavan here. "This is a very sensitive time for the country. It needs to generate more jobs, better standards of living for urban people and the rural poor alike. It needs investment in agriculture, manufacturing, and technology. Those of us who're responsible for accelerating economic development are under a great deal of scrutiny from the voters."

Mr Nath is India's new Minister of Commerce and Industry, a post that bestows him enormous power to shape the country's economic growth. Next to his friend and mentor, Prime Minister Manmohan Singh, Mr Nath is the cabinet minister most sought after by the business community because his ministry rules on industrial production and expansion. Even though the economic liberalisation of recent years has resulted in less red tape, businessmen who want to succeed cannot afford to cross Mr Nath because, with a single notation on a business application, he can affect the project's prospects.

He's also India's chief salesman overseas, the man entrusted by the ruling Congress-led United Progressive Alliance (UPA) to convince foreign investors to bring their money to this country of 1.1 billion people, which also happens to be the free world's biggest consumer market, with a middle class estimated at more than 300 million. India currently gets a puny US$3 billion annually in foreign direct investment (FDI), compared to US$53 billion for its neighbour and rival, China.

In fact, soon after the interview Mr Nath was scheduled to fly to London and then to Brazil. His message to potential investors?
"That we have a robust economy, registering annual growth of nearly seven percent, that we are a vibrant democracy that holds elections peacefully, that we have a large English-speaking labour force, that we have energetic indigenous entrepreneurs who aren't averse to risk taking, that India has already become a technological giant," Mr Nath said.
"My message is that India is going to be the most compatible, most conducive and most profitable center for international business capital," the minister continued.

But Mr Nath isn't looking for merely large injections of FDI.
"We want foreign investment to be job-creation specific, we want it to help transform our agriculture into being more productive, we want FDI to help strengthen our infrastructure, we want investment in manufacturing, we want investment in the small-scale sector," he said.

Mr Nath leaned forward intensely. In the soft light of his heavily curtained office, his remarkably unlined face looked even younger.
"Listen, you know how much our foreign-exchange reserves are? Nearly US$120 billion," he said. "So while all kinds of FDI is always welcome, our very comfortable foreign-exchange reserves means that investment for mere acquisitions do not excite us. What we really want is FDI that creates jobs and generates wealth for our people."

As he speaks, the phone rings. It's the Prime Minister's office. The phone rings again. It's the office of Mrs Sonia Gandhi, the leader of the Indian National Congress and the UPA. Now Mr Nath's mobile phone rings. It's his friend, Finance Minister Palaniappan Chidambaram, who was originally supposed to have gotten Mr Nath's job, but only one part of - the Commerce Ministry. The Industry Ministry had long been a separate entity.

But skilled politician that he is - having served in the Lok Sabha, the lower house of the 545-member Parliament from Madhya Pradesh state's Chhindwara constituency since 1980 - Mr Nath persuaded Mrs Gandhi and Prime Minister Singh to combine the ministries. He had many IOUs to cash. As General Secretary of the Congress, Mr Nath helped plan the election campaign last month in which the 22-party National Democratic Alliance, led by the right-wing Hindu nationalist Bharatiya Janata Party (BJP) was unexpectedly ousted from power by the Congress and its 12 allies in the UPA.

"You say unexpectedly?" Mr Nath harangued a reporter. "Our victory was expected by people like me. I'm a politician. I listen to the people. Then I do my arithmetic. I knew the BJP had lost touch with the realities on the ground. They talked about 'feeling good.' What feeling good? With so many people still poor and jobless? I told Mrs Gandhi during the campaign, 'We are going win this one.' I don't know if she believed me at the time. And then the results came in."

His closeness to Mrs Gandhi and her family dates back more than two decades. He worked with her brother-in-law, Mr Sanjay Gandhi, when the family's matriarch, Mrs Indira Gandhi - Sanjay's mother - was the Prime Minister. Sanjay died in a plane crash, and not long afterwards Sikh bodyguards in her garden here assassinated Indira Gandhi. Sanjay's older brother, Mr Rajiv Gandhi, became Prime Minister, and soon Mr Nath became his trusted advisor. In 1991, a Tamil terrorist from Sri Lanka murdered Rajiv, then out of power.

It was a month later, in June 1991 that Mr Nath was inducted into the cabinet for the first time by then Prime Minister P. V. Narasimha Rao. He became the Minister of Environment, and that's when his political career really took off. Mr Nath soon became the leading voice in the Third World for sustainable development that was coupled with social justice. Along with Mr Rao, he led India's delegation to the United Nations Conference on Environment and Development - popularly known as the Earth Summit - in Rio de Janeiro, Brazil, in June 1992.

His job took him to many countries around the world, and the gregarious Mr Nath made lots of friends in high places. One of them was Mr George Yeo, now Singapore's Minister of Trade and Industry, who calls Mr Nath a "close friend."
"As India opens its economy to the world, the old links between India and Singapore are being renewed. They are not only economic and political links; they are also personal and cultural links," Mr Yeo said recently at an Indian gathering in Singapore.

Their friendship will soon be put to the test. That's because the India-Singapore Comprehensive Economic Cooperation Agreement is still being finalized; under it, each nation will make several concessions and accommodations to the other in the expectation of increasing bilateral trade, which has increased since 1999 from US$3.23 billion to US$4.64 billion last year. But the trade balance is in Singapore's favour: in 2003, Singapore exported computer parts and other goods totalling US$3.16 billion to India, while importing rice, sugar, crude petroleum and silk fabrics worth US$1.48 billion.

"Yes, of course we want Singapore to participate more in our economic development," Mr Nath said, adding that Singapore, which has invested US$1.2 billion in India's private and public sector entities, is also India's largest trading partner among the countries of the Association of South East Asian Nations (Asean). (India, however is Singapore's 15th biggest trading partner.)
India, Mr Nath said, was looking to Singapore for more investments in infrastructure development, critical technology and special economic zones. He added that India wants to see more of its professional workers such as engineers and accountants employed in Singapore. Other senior officials in his Ministry said they were concerned that Singapore is notoriously circumspect about allowing foreigners to remain there long-term.

Mr. Nath's friend, Mr Yeo, has said that Singapore wants large Indian companies to establish offices on the island and trade shares on the Singapore exchange. It also wants Indian researchers to patent their products and inventions there and sees opportunities for tourism to India; fewer than 50,000 Singaporeans visit India annually, while some 500,000 Indians go each year to Singapore, where about eight percent of the country's population of 4.5 million is ethnic Indian, primarily from South India.

Noting that Mr Yeo wants Singapore to be "the London of Asia" - Mr Yeo's phrase - and a "center for talent, ideas and intellectual property management," Mr Nath suggested that Singapore and India should help develop a "Safta" - South Asian Free Trade Association, along the lines of Nafta, the North American Free Trade Association.

"Why not?" Mr Nath said, "the Singaporeans want to transform their island into a hub for biotechnology and electronics. Indian can become a hub for services and manufacturing, its two big strengths."

The bilateral question that concerned him about the India-Singapore economic cooperation pact was that of "issue of origin."
"We don't want goods coming to us as stamped from Singapore when, in reality, they are made somewhere else - China, for instance," Mr Nath said. "These are the kinds of things that are going to have to be clarified through negotiations."

Negotiating is what Mr Nath is very good at, say those who've followed his career over the years. As India's environment minister, and later textiles minister, he participated in many sensitive bargaining sessions on issues such as emissions and garment quotas. He's been in negotiations at the World Trade Organisation, of which India is a member.

Starting today (Sunday), Mr Nath will lead India's contingent at 11th session of the United Nations Conference on Trade and Development (UNCTAD) in Sao Paolo, Brazil, where India is expected to be the driving force on issues such as agriculture, trade liberalisation and the opening of Western markets to products from developing countries.

Even his political foes acknowledge that Mr Nath is a keen listener with an ability to find common ground between differing forces.
"I see myself as an enabler, I see my Ministry as an enabling ministry, not a disabling ministry that puts stumbling blocks in the way of progress," Mr Nath said. "I'm a political person, not an economist or statistician. I see things with a different eye. I see what's good for people, who must be the ultimate beneficiaries of all government policies. We have intellectual, commercial and management capital in India that's not been fully unleashed. The role of my Ministry will be to serve as a catalyst for sustained economic growth. India is sitting in the departure lounge, still waiting to take off."

When such a takeoff occurs - which is to say, if India maintains an annual growth of around seven percent for at least a decade - then Mr Nath and his bosses, Prime Minister Singh and Mrs Gandhi, believe that the country will genuinely become an economic superpower. quite possibly the world's third largest economy after the United States and China.
"I believe in the TINA factor," Mr Nath said. "That's 'There is no alternative' to our becoming an economic superpower. It's going to happen."

Mr Nath is still young enough to see that happen - a quadrupling, at least, of India's current gross domestic product of US$600 billion within a decade. In a cabinet filled with ministers of relatively slight political weight, he's clearly a heavyweight with a long track record of accomplishment. There's general agreement that Prime Minister Singh and Mrs Gandhi chose well in giving Mr Nath the commerce and industry ministry. In order to propel India toward that economic takeoff about which he speaks with such passion, Mr Nath and his Ministry are going to be critical players.

In New Delhi, at least, the betting's in their favour.

Pranay Gupte,
Senior Writer and Global-Affairs Columnist


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