Q&A with India's Champion for Developing Countries

Commerce Minister Murasoli Maran on why the WTO needs to be a transparent and democratic system

To the developed world, Murasoli Maran, India's Commerce Minister, was the villian of the World Trade Organization's December, 2001, meeting at Doha. He refused to allow the Doha (Qatar) meeting to conclude unless developed countries agreed to make good on their longstanding promises to phase out farm subsidies and limit antidumping laws and give the less- developed nations more time to adhere to new rules.

To India and much of the developing world, Maran is a hero. On his return to India on Dec. 15, India's Prime Minister, Atal Bihari Vajpayee, held a grand banquet in Maran's honor in New Delhi. Not only did Maran stand up for issues that have long bothered the developing nations but, says an admiring international trade negotiator in Geneva, he made the big boys of the WTO -- the U.S. and Europe -- take notice of India as a champion for the rights of other developing nations.

Playing hardball isn't new to the 67-year-old Maran. The former movie scriptwriter, lawyer, and businessman from south India has been in politics for nearly four decades. He has held three posts in the Indian Cabinet in the last dozen years, and he is an unapologetic nationalist.

As Industry Minister, in 1987 he squabbled with Suzuki Motors over its management control of Maruti, the automobile joint venture between Suzuki and the Indian government. Eventually, Suzuki agreed to let the government take turns appointing a company chief. More recently, he withheld permission for consumer-products maker Amway to test-market its products in India, claiming that his country should be a manufacturing base, "not a trading outpost for multinationals."

Maran is also one of India's most ardent reformers. He has been a strong supporter of foreign media investment in India and for Singapore Airline's entry into India's airline market. BusinessWeek's India Bureau Chief Manjeet Kripalani recently spoke to the feisty Maran at his home in New Delhi. Here are edited excerpts of their conversation:

Q: Why do you feel the WTO processes are unfair?

A: Developing countries including India have no role in the agenda-setting process. In international documents, differences of opinion are set off in square brackets. This time -- for the first time -- documents were sent from Geneva to Doha as if there were consensus. It was a bad start.

We were asked to go through the motions of consultations.... We are all for a strong, multilateral trading forum...but we should be rule-oriented, not power-oriented. WTO decisions affect the day-to-day life of billions. Unless we are consulted, we won't know our obligations, responsibilities, and rights. So we want a transparent and democratic system. It's a terribly unlevel playing field.

The text produced at the end [of the Doho meeting] contained everything that rich nations want. There was a meeting with 23 countries that went on for 38 hours. [Some time into] the 37th hour, they produced a draft for me, like a rabbit from a hat. [That gave us no time for consultation.] What is agreed to should be negotiated.

Q: Are you a reformer or a protectionist?

A: There is a difference between protection and protectionist. The inefficiency of [the U.S. steel industry] is being financed by the rest of the world. I say, give the same leverage to all countries.

Q: How will you make India more competitive, especially against China?

A: India has to improve its competitiveness in areas like cement, paper, leather [manufacturing], etc. China's WTO membership will expose China's cost and subsidy structure. That's a very welcome step.

We are slowly removing [barriers for smaller businesses and industries] and we are also giving them time. For example, we are developing clusters for auto [parts, because] auto majors outsource from India. In Tirupur, knitwear is famous. We have permitted 13 special economic zones -- SEZs -- which are virtual foreign territories [under the control of the state governments]. This is based on the Chinese model.

The SEZs are labs for testing our new labor laws. [Hopefully, this will mean] more jobs and [better] management practices and technology.

Q: What next?

A: This is my big passion just now -- one of our best hopes and dreams for India.

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