(http://www.nytimes.com/)
____________________________________ India's new lobbyists use American methods - Business - International Herald Tribune By Anand Giridharadas Published: Thursday, May 18, 2006 NEW DELHI — Gaining political influence in India was once a simple affair: You handed over a suitcase of cash, in nonsequential notes. But in India, as elsewhere in the developing world, the old business of corruption is meeting a new rival: the Washington-style business of persuasion, in which companies garner influence through golf games, planted news stories and PowerPoint presentations. As global corporations woo a billion customers, there are tax breaks and contracts to be wrested from Indian officialdom. Some companies still get them by corrupt means, covering their tracks with middlemen, as some foreign managers acknowledge in private and as high-profile Indian media investigations have alleged. But many companies, according to experts on India's corporate landscape, are turning to lobbyists who use subtler tools of influence, partly out of fear of anti-bribery laws like the U.S. Foreign Corrupt Practices Act, which threatens jail time even for chief executives if they let workers pay bribes overseas. In Washington, lobbying is a huge, established industry and, of late, a source of controversy. But in India, where there is a long tradition of outright corruption, lobbying is regarded by many as a lesser evil. Supporters say lobbyists are helping to pry open closed industries. They are praised for introducing fact-based analysis into the debate over l iberalization, and for creating a cheaper alternative to bribery. "To some extent, it will reduce corruption," said Abhijit Sen, an economist who serves on the government's Planning Commission. "You can get certain things now for free that you once had to pay for." Unlike in the West, lobbying is virtually unregulated in India, as in many other developing countries. And even as institutions like the World Bank increase efforts to curb graft in developing countries, lobbying will remain a gray area immune from equivalent scrutiny, said James Wolfensohn, a former World Bank president. "The earlier efforts of lobbying in the developing countries was really writing checks to the parliamentarians and officials," he said by telephone. "And we were focusing on that much more than on hiring a lobbyist to promote the interests of Boeing in India." But the rise of lobbying here has generated critics, who call for more scrutiny. Consumer groups contend that Washington-style lobbying can veer into manipulation, with fact-filled presentations supplemented by other practices like planting misleading news articles and disguising lobbying campaigns by multinational companies as indigenous grass-roots initiatives. Many of these practices, to which some of the lobbyists freely admit, are within the law, but critics say it can be harder to counter these tactics than more straightforward lawbreaking. Sunita Narain, a well-known Indian environmentalist, describes the new lobbying as corruption by other means. "I'm not very happy with this legalized corruption," said Narain, who for years has battled against the practices of multinational companies in India. "Give me old-fashioned Indian corruption. Yes, it stinks. But it's a stink that everyone knows." Defenders of the lobbying say it signals a new partnership between the state and business in India. In the decades after independence in 1947, India was a socialist republic notorious for its "License Raj" - the lumbering bureaucracy that parceled out permissions needed to start, operate and close businesses. Being a lobbyist meant begging for exemptions from a system that stifled entrepreneurship. Today, the lobbyists no longer have to beg. "You have in the government and in the bureaucracy people you don't have to convince," said Prakash Karat, general secretary of the Communist Party of India (Marxist). "They are themselves clear that you have to implement policies in favor of the corporations." So sympathetic are many bureaucrats that they often copy and paste language from lobbyists' presentations into government reports that grant the lobbyists their wishes. Sen, the economist, said that in a country that lacks world-class research centers, officials have little choice but to rely on the fact-filled presentations that the lobbyists provide. Foreign companies seeking access to India's market often collaborate with government officials to outline a deregulation approach that satisfies the company without marring the government's political standing. When the Italian clothier Ermenegildo Zegna wanted to open boutiques in India, it was barred from doing so by law: India prohibits foreign investment in retailing, because of fears of undermining millions of mom-and-pop shops. But India's commerce minister, Kamal Nath, wanted to help Zegna and even wears its suits, said Rahul Prasad, the designer's managing director for South Asia. So Zegna's chief executive, Paulo Zegna, began discussing with Nath creative ways to alter the rules. The two traded frequent faxes and e-mail messages with various ideas, Prasad said. Then, in a letter to the government, Zegna suggested a compromise: Why not admit foreign retailers selling only a single brand - approving firms like Zegna and Gap, but excluding hypermarkets that would compete with small retailers? In January, the government opened retailing to foreign capital for the first time - and solely for single brands. In interviews, some of Delhi's leading lobbyists described their methods. When clients are accused of breaking the law by an Indian government body, one strategy is to play that body off against other bodies in India's labyrinthine federal system. Deepak Talwar, a prominent Delhi lobbyist, represented Coca-Cola, which had been accused of harming the environment. The company, which declined to comment for this article, has denied the charges. Talwar's lobbying approach was to ensure, among other things, that every government or private study accusing the company of environmental harm was challenged by another study. In addition, Talwar said during an interview, he lobbied high-ranking government officials to support the company's cause, in the hope that their influence - in addition to the conflicting studies - might dissuade government scientists from making a clear-cut judgment against the company. Lobbyists say one secret of their craft is to invoke the public good in support of their clients' interest. When TetraPak, a European packaging company, wanted duties cut on a raw material, it hired Dilip Cherian, a Delhi lobbyist who charges clients $100,000 a year. The company came out with a statement criticizing the duties. But Cherian also attempted to create a groundswell of support for a duty cut from milk farmers too destitute to buy the cartons at present prices. TetraPak declined to comment for this article. Cherian's team traveled to villages to persuade farmers' cooperatives to lobby their members of Parliament, who in turn lobbied the finance minister. "What happens here is that actually policy- making is much more democratic than it seems," Cherian said, when asked about lobbying's influence on democracy. Next: How a corruption scandal rocked a Chinese bank.
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