DATE=5/13/98
TYPE=CORRESPONDENT REPORT
NUMBER=2-232146
TITLE=INDIA SANCTIONS (L-OVERNIGHT)
BYLINE=DOUGLAS BAKSHIAN
DATELINE=NEW DELHI
CONTENT=
VOICED AT:
INTRO: ECONOMIC ANALYSTS ARE INITIALLY GIVING A MIXED VIEW OF
THE IMPACT OF INTERNATIONAL SANCTIONS ON THE INDIAN ECONOMY IN
RESPONSE TO THIS WEEK'S NUCLEAR TESTS. NEW DELHI CORRESPONDENT
DOUGLAS BAKSHIAN HAS MORE ON THE STORY.
TEXT: FOR MORE THAN 40-YEARS INDIA HAD A CLOSED ECONOMY AND HAS
BUILT UP LARGE, GOVERNMENT-SUPPORTED INDUSTRIES TO SUPPLY THE
COUNTRY'S NEEDS. ECONOMISTS SAY FOREIGN TRADE AND INVESTMENT
ONLY BEGAN TO TRICKLE IN SINCE ECONOMIC LIBERALIZATION BEGAN IN
1991.
AT THE SAME TIME, ANALYSTS SAY SMALL SECTIONS OF THE ECONOMY HAVE
BENEFITED FROM FOREIGN INVESTMENT AND THESE WILL BE HARD HIT BY
SANCTIONS.
VISITING PROFESSOR AT THE DELHI SCHOOL OF ECONOMICS, JEAN (JOHN)
DREZE, SAYS IN A POOR COUNTRY LIKE INDIA, EVERY BIT OF ECONOMIC
PRESSURE HAS AN IMPACT.
/// DREZE ACT ///
WELL I DO NOT EXPECT THE EFFECTS WILL BE DRAMATIC IN THE
SENSE THAT INDIA IS A RELATIVELY SELF-RELIANT COUNTRY
AND FOREIGN INVESTMENT DOES NOT HAVE THAT MUCH
IMPORTANCE, AT LEAST, AS THINGS STAND. AND U-S
INVESTMENT IS EVEN SMALLER. U-S AID OF COURSE IS
VIRTUALLY ZERO, SO IN THAT SENSE I DO NOT EXPECT THE
EFFECTS TO BE VERY SIGNIFICANT. BUT AT THE SAME TIME I
DO NOT SHARE THE COMPLACENCY OF THE GOVERNMENT. IN THAT
RESPECT, I THINK THE GOVERNMENT IS TRYING TO DISMISS THE
PROBLEM AND SAY THAT THERE WILL NOT BE ANY EFFECT AT
ALL. I THINK THERE WILL BE SOME EFFECT AND THAT THESE
HAVE TO BE TAKEN SERIOUSLY. AND THIS IS A COUNTRY WHERE
EVERY OPPORTUNITY TO REDUCE POVERTY HAS TO BE SEIZED AND
ONE CAN NOT REALLY IGNORE THE POSSIBLE NEGATIVE IMPACT
OF THESE SANCTIONS EVEN IF IT IS RELATIVELY SMALL.
/// END ACT ///
A TOP INDIAN BUSINESS LEADER IS PLAYING DOWN THE IMPACT OF
SANCTIONS. AMIT MITRA, WHO HEADS A NATIONAL BUSINESS FEDERATION,
SAYS WHILE U-S GOVERNMENT FINANCED PROJECTS WILL BE STOPPED --
PRIVATE U-S INVESTMENT COULD CONTINUE. HE SAYS THE ONLY OBSTACLE
TO PRIVATE INVESTMENT WOULD BE PSYCHOLOGICAL -- BUT HE SAYS HIS
INITIAL SURVEY INDICATES PRIVATE COMPANIES REMAIN WILLING TO DO
BUSINESS.
/// MITRA ACT ///
AS FAR AS WE KNOW, WE HAVE TALKED TO ABOUT 10 AMERICAN
COMPANIES BASED IN INDIA ALREADY, AND THEY ALL SAY THAT,
NO, THEY WOULD NOT BE DETERRED THAT INDIA IS A VAST
MARKET, AN OPEN SOCIETY, A DEMOCRACY, ALL CARDS ARE ON
THE TABLE. AND THEY WOULD NOT LIKE TO MISS OUT ON THE
OPPORTUNITY OF INVESTING IN THE FOURTH LARGEST ECONOMY
IN THE WORLD BY THE YEAR 2015. SO, AS FAR AS WE STAND
TODAY, IT APPEARS THAT THE IMPACT WOULD BE MORE
PSYCHOLOGICAL AND SOMEWHAT DISCOMFORTING THEN
FINANCIALLY SO POWERFUL OR RELEVANT.
/// END ACT ///
MR. MITRA IS SECRETARY GENERAL OF THE FEDERATION OF INDIAN
CHAMBERS OF COMMERCE AND INDUSTRY.
MEANWHILE, A POLITICAL ADVISER TO PRIME MINISTER ATAL BIHARI
VAJPAYEE SAYS INDIA HAS THE STRENGTH TO STAND UP TO INTERNATIONAL
SANCTIONS. PRAMOD MAHAJAN SAYS INDIA RESTS ON THE STRENGTH OF
INDIANS, NOT ON THE STRENGTH OF THE OUTSIDE WORLD. (SIGNED)
NEB/DB/LTD/RAE
13-May-98 10:54 AM EDT (1454 UTC)
NNNN
Source: Voice of America
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