Monday, June 22, 2015

Arun Jaitley at the American Enterprise Institute

Link to the AEI page (no transcript yet).


My commentary:

The questions posed to Arun Jaitley reflect the right-wing ideological bent of the AEI.   They wanted to know whether it is appropriate to compare Modi to Reagan or Thatcher.   They wanted to know whether Jaitley would recommend the Indian-model or Chinese-model to an African finance minister.  And so on.  Basically, I perceive an American right-wing need to use any Indian economic  success as a way of promoting their ideological compulsions with the American electorate, and worldwide, too.

In his responses, Jaitley was very non-ideological.  He said that the problem in India that the government has to address is the 25-30% of people who are in poverty and often in distress, and thus cannot be Reaganesque or Thatcherite.  He must do the 300 small doable things rather than the one big ideological statement that will run into controversy and block everything else.  That every country must assess its own problems and figure out how to address them based on its circumstances. 

A good example is when Jaitley pointed out that he can count on the support of public sector banks for the financing of infrastructure projects and for creating bank accounts for the hundreds of millions of people not covered in the banking sector; the private sector banks are not able to deliver.  So he is in no rush to privatize the public sector banks; he is committed to reducing government equity in those banks. (See this news-item as to why the 125 million new bank accounts are such a big deal.  Among other things, leakage in subsidies to poor people for things like cooking gas or kerosene can be eliminated by government direct-deposit into their bank account.) 

The contrast with the questions Jaitley met with in the Council on Foreign Relations session are marked.  The audience in the CFR wanted to know how Jaitley would address specific problems.  The AEI audience seemed to want to know how Jaitley would advance a free market ideology.  At least in this session, it seemed to me that Jaitley is more interested in solving the problems faced by India's people than adhering to ideological purity.