India’s next moves

India's elections were as much a revelation to Indians as they were to rest of the world. Prime Minister-elect Sonia Gandhi will be inaugurated tomorrow, after the victory last week of her Congress Party far outpaced the results of all major pre-election polls. Political strategists convinced former Prime Minister Atal Behari Vajpayee to hold early elections to benefit from a run up in economic growth. Needless to say, they were badly mistaken.

The main question now remains: Will the new government effectively continue the previous government's peace process with Pakistan and economic reforms? Yes and no, seem the likely answers. The Congress Party is expected to be as or more committed to improving relations with Pakistan. India's new economic agenda, though, looks more dubious.

While Sonia Gandhi, the widow and daughter-in-law of assassinated Indian prime ministers, won the most votes in the elections, she failed to gain majority support and therefore will be forced to join with other parties in a coalition government. Such coalitions are often difficult to steward. More positively, Manmohan Singh, a former finance minister, is expected to be a senior policy-maker and voice of economic reason within the Congress Party. Yesterday, the Bombay Stock Exchange (BSE)'s benchmark Sensex index fell 11 percent, its biggest one-day slide since an April 1992 financial scandal.

The India Shining campaign of the Mr. Vajpayee's Bharatiya Janata Party (BJP) did accurately reflect economic indicators: India grew an estimated 8 percent in the year to March 2004, aided by a monsoon that political strategists believed would wash away the drought-related bitterness of the past few years. Still, about 20 percent of India remains poor, down from 36 percent as recently as 1994. To this segment of the population, the positive figures rang hollow. The Muslim population also may have voted tactically in these elections. If it becomes clear that Muslims did form a voting block, that could potentially polarize Muslim and Hindu Indians further.

What remains surprising, though, is the degree to which the election reflects changing attitudes toward neighboring Pakistan. The BJP campaigned in part on its ability to bolster trust with Pakistan. The BJP's decision to play up the peace process is interesting, given the party's roots in Hindu nationalism. Political strategists appear to have gotten the Pakistan issue right. The victorious Gandhi dynasty is closely linked with the peace effort. Still, Indians' overriding concern was economic.

That is also a chief concern for the United States and much of the international community. A prosperous India would be a welcomed geo-political counterweight to Chinese power. China is becoming more effective in translating its economic rise to diplomatic gains in Asia, as Asian countries become increasingly dependent on trade with China. A richer India would help temper that dependence.

The United States, which has formed a much warmer relationship with India in recent years, has an interest in seeing a thriving India, at peace with its nuclear-armed neighbor, Pakistan. India is one of the rare examples of a successful multi-religious and ethnic country -- the troubles in the disputed region of Kashmir not withstanding. India has as many Muslims as Pakistan. The triumph of Mrs. Gandhi, an Italian-born Christian and (of course) a woman, reflects India's tolerance. Her prospects of success remain uncertain, but the world would clearly benefit from a Shining India.