INDIA: Gov’t Bid to Woo Overseas Indians Bound to Fall Flat

By IPS Correspondents Reprint | | Print |

Commentary - By Praful Bidwai

NEW DELHI, Jan 18 2003 (IPS) - Devoid of imaginative strategies to boost flagging economic growth, the Indian government is looking for shortcuts, this time by wooing investment from its own ‘diaspora’, consisting of 20 million people scattered in some 130 countries.

But its moves to entice persons of Indian origin, including its proposal to offer dual citizenship to those from a ”select” group of countries, has drawn flak.

Earlier this month, the government organised a three-day extravaganza here to felicitate people of Indian origin, hundreds of whom were invited to a sumptuous spread of conferences and state banquets, with virtually the entire cabinet of the government of Indian Prime Minister Atal Bihari Vajpayee in attendance.

The festivities were launched on Jan. 9, to mark the day Mahatma Gandhi returned to India from South Africa in 1910.

The irony of the choice of date is that none of overseas Indians, especially the 4.5 million-strong minority of affluent professionals living in the rich countries, has the remotest inclination to return to India. Yet, it is this very group on which the government concentrated all its energies.

In the process, it has created new rifts and attracted the accusation that it is practising "dollar and pound apartheid" – pampering persons of Indian origin from North America and Britain and other industrialised countries, while treating the more numerous groups of Indians settled elsewhere with disdain and contempt.

The government is inspired by the example of China and the large contribution that people of Chinese origin make to foreign direct investment (FDI) flows into that country. Their share in FDI – itself in the order of 35 to 40 billion dollars a year and last year exceeded 50 billion dollars – is estimated at 60 to 80 percent.

But persons of Indian origin have proved different. They account for about nine percent of FDI flows into India and at best make speculative portfolio investment of "hot money" in the country.

They are greatly differentiated and highly heterogeneous. They comprise four distinct groups. First and oldest are those who were drafted as "indentured" or quasi-slave labour in the 19th century and dispatched to other colonies of the British and Dutch empire, such as Mauritius, Fiji, Malaysia, Surinam, Guyana, Trinidad, and South Africa. Many of them remain relatively poor.

The second group consists of the one million-plus Indians who migrated to Britain in the last century, some through East Africa – mostly shopkeepers, blue-collar workers and postal clerks. This group is upwardly mobile, but has had to struggle hard to be granted civil and political rights and a proper identity.

The third group comprises emigrants to the Persian Gulf after the oil price boom of 1973. These are largely unskilled and semi-skilled workers or artisans with a modest income but without full residency rights.

The fourth group consists of affluent professionals and businessmen who migrated to the United States, Canada and Western Europe from the mid-1960s onwards. This group is socially conservative. It is acquiring considerable economic and political clout, especially in the United States, where it is the single richest minority, richer than even the Japanese.

It is on this last group that the Vajpayee government lavished praise as "catalysts of change". And it is to them that it is offering dual citizenship.

This group can claim credit for many success stories and some genuine achievements. Nobel Prize winners Amartya Sen and V S Naipaul and rich Silicon Valley entrepreneurs are examples. But these achievements are not residence-specific, and have not catalysed change inside India.

Persons of Indian origin overseas have a schizophrenic attitude to India. On the one hand, they are culturally close to the country and emotional about their links. On the other, this affinity rarely translates into a tangible commitment.

Those from the affluent countries possess enormous wealth. They account for the bulk of the overseas Indian community’s collective annual income of 160 billion dollars, almost half of India’s GDP. But they account for a mere nine percent of total investment flows into India, and only four percent of foreign direct investment.

By contrast, humble Gulf-based workers remit four times more money. Without this, India’s economy could not have survived the oil shocks of the seventies.

Affluent overseas Indians invest in India out of the profit motive, not patriotism.

Take Lakshmi N Mittal, the world’s second largest steel producer and its richest person of Indian origin. He says: "(The) government should not look at 50 billion dollars from non-residents, it should look at 500 billion dollars from multinational companies. I don’t think any non-resident would invest because of emotional attachment. They want returns à I love my country à But I must get returns as well".

In 1990-91, overseas Indians suddenly withdrew 1.5 billion dollars from Indian banks, plunging the Indian economy into a crisis.

However, it is the dual citizenship issue that is proving most contentious. Citizenship is not about passports, residence, or even emotional bonds. It is about participating in the life of the nation. Citizenship is not a bargain over investment. It makes no democratic sense to grant it to people who do not live in the country.

Why does the Vajpayee government so pamper overseas Indians from industrialised countries? The answer is the national-chauvinist politics of the Hindu right-wing Bharatiya Janata Party (BJP), which heads the ruling coalition. This strikes a chord among conservative overseas Indians – American and British of Indian origin are the BJP’s principal source of funds too.

The link has been documented most recently by the Campaign to Stop Funding Hate. It traces donations collected by a BJP front, India Development and Relief Fund (IDRF), from U.S. companies such as the computer software giant Cisco and Apple Computer, and diverted to finance violent activities in Gujarat state, which in early 2002 witnessed a pogrom of Muslims.

Cisco has since apologised for having donated money to IDRF.

The BJP is pursuing a parochial agenda. It congratulates overseas Indians who occupy public positions, but drums up xenophobia when that suits it politically.

It has run a hysterical campaign against opposition Congress Party leader Sonia Gandhi, focused on her Italian origins – ignoring the fact that she has voluntarily chosen to adopt India as her home. Legally, she is on a par with Indians born here.

Thanks to its inconsistencies, India’s ruling BJP is bringing discredit upon itself.