News



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)
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Source: Voice of America
.