Religious riot deals a blow to India's star reformer

PUBLISHED : Monday, 09 June, 2003, 12:00am
UPDATED : Monday, 09 June, 2003, 12:00am

The sudden eruption of religious violence last week in the southern city of Hyderabad, a major centre for the multi-billion dollar software industry, has dramatically underscored a question frequently asked in India today: Is the modernising campaign of reformist Chief Minister N. Chandrababu Naidu coming unstuck?

The Hindu-Muslim riot occurred as the state of Andhra Pradesh, of which Hyderabad is the capital, is reeling under an intense heat wave that has killed more than 1,300 people.

Ever since the mid-90s, when he came to power after unseating his father-in-law, the sandal-clad, scruffily bearded Mr Naidu has been a poster boy for India's determination to energise its civil service and reform its moribund economy.

He set about restructuring the state-run power sector, privatised badly managed government-owned companies, used information technology (IT) to make the administration more responsive, courted investors around the world, and introduced a slew of development schemes aimed at the rural poor.

In a country where populist politicians think nothing of wasting state funds on unproductive subsidies - cheap electricity, water, fertiliser - Mr Naidu declared that he wanted to 'change people's minds, and make them think about development'.

His role model, he said, was Singapore's Lee Kuan Yew, a startling statement in a country whose politicians have long pretended to be anti-capitalist to garner votes from the poor.

Mr Naidu's reformist zeal and vision of development brought him support and millions of dollars in aid from the World Bank. A New Delhi-based official of the funding agency has described the chief minister as 'one leader who has succeeded in generating the perception that his state means business'.

Among Mr Naidu's new-found admirers was Microsoft chairman Bill Gates, who opted to set up a software development centre in Hyderabad instead of the rival southern city of Bangalore, where India's software revolution began.

The ambitious Mr Naidu can hardly be faulted for not trying. But besides an over-emphasis in the early years on IT as a development tool, he has also had a run of bad luck.

Despite his efforts, Andhra Pradesh has been unable to attract large-scale international investment due to reasons beyond his control - the downturn in the world economy, the failure of the Indian government to speed up liberalisation, and the continuing instability in the region, thanks to India-Pakistan hostility. As a result, Mr Naidu's ambitious plans have driven his state deeper into debt.

Nature has not been kind either. The state is facing a severe drought for the third successive year, driving already impoverished peasants to desperation.

But it is not as if the high-profile chief minister is being forsaken as a failure. For instance, Andhra Pradesh is still a major beneficiary of World Bank aid.