T HE SCANDAL over payoffs to
Indian officials by the Swedish arms firm Bofors has accelerated the decline of the government of Rajiv Gandhi, who won a landslide victory in the December 24, 1984, general elections. The rapid fading of his star has been reflected, among other things, in recent defeats for his Congress Party in state assembly elections in Kerala and West Bengal, which were won by coalitions dominated by the Communist Party of India-Marxist (CPM).
In fact, the Bofors affair has been the crest of a rising wave of scandals. It is on the question of corruption, for example, that Rajiv has been hardest pressed in the government by his rival V P Singh. As finance minister, Singh carried out the essentially tokenist and populist policy of "cleaning business a little too enthusiastically.
When Rajiv Gandhi finally shifted him this February to head the Ministry of Defence, VP Singh went out of his way to further embarrass the government by ordering a probe of a defence deal whereby India contracted to purchase a number of submarines from the West German
The ostensible purpose was to uncover an alleged pay-off of close to 7 per cent of the final purchase price to various intermediaries who obviously acted on behalf of important people in the government and ruling party. The finger of suspicion was implicitly pointed to Rajiv Gandhi and his closest associates.
V P Singh made news of the probe public without the prime minister's permission, and this led Rajiv Gandhi to obtain his resignation amidst a public outcry that he and his government intended to cover up the whole issue.
In April this year, Swedish National Radio broke the scandal about Bofors, the Swedish manufacturer of field artillery, whose parent company is Nobel Industries, headed by Anders Carlberg.
Swedish radio stated that around 33 million kroner [about $5,500,000] had been transferred to the Swiss bank accounts of Indian "contacts." It said it had dates, account numbers and details of the amounts transferred, but was afraid to disclose them for fear of harming its sources. In response to the domestic uproar, the Indian government claimed that it wanted all the details to come out.
What is the Bofors deal? The total transaction involves 1,500 field guns, costing over $3,500,000. The initial deal for 155mm howitzers or Bofors FM-77 B artillery systems was worth 8,400,000 kroner [$1,416,666], which still made it the single largest export order ever for Swedish industry, and the biggest ever contract signed by Bofors.
The Swedish company had had to compete with the British/German/ Italian FM-70 system, the Austrian GHN-45 and the French GIAT-155 TR system. By 1985, after tests, the Indian choice lay between Bofors and the French. In March 1986, the contract was given to Bofors, two months after a visit to India by the then Swedish premier Olof Palme, who met Rajiv Gandhi and personally plugged Bofors.
Web of conspiracies still unravelling
Without this deal, Bofors would have been in desperate trouble, and would have had to close down a major part of operation, putting thousands of workers out of a job. Thus, there was obviously considerable pressure on Palme to secure the deal.
In Sweden the Indian deal is really peripheral to the main controversies. The web of conspiracies and manoeuvrings is still unravelling.
What is the identity of the Indian
INDIA "contacts" and the interests in government that they were serving? Can any of them be linked to the circle close to Rajiv Gandhi or it is at other levels that the corruption flourished? If so, at what levels?
How much was given in kickbacks? If it is only the sum of 60.6 million rupees (less than half a per cent of the total value of the deal revealed by Swedish radio, then the uproar will be much less than if the payoffs were in the range of 5 per cent or more. One per cent payoffs are after all "normal" in all major defence deals anywhere in the capitalist world.
Nonetheless, this scandal brought the credibility of the Rajiv government and his leadership of the Congress Party to its lowest point since he came to power. This unique opportunity could have been used by the mainstream left (The Communist Party and the Communist Party-Marxist) to widen the breach in the bourgeois government's crisis. They could, and still can, try to push popular anger and disillusionment in a radical direction.
A convenient scapegoat
The problem is that the reformist left do not want to do this. They will not mobilize nationally on the issue of corruption, because they are giving first priority to the defence of the bourgeois government against the "forces of destabilization" This flows logically enough from their agreement with the Soviet government's support for the India's "anti-imperialist" foreign policy.
The US no doubt does utilize opportunities to extend its influence when these present themselves. nothing new. Time and again, the ruling Congress has used the idea of "destabilization" by a "foreign hand" as a convenient scapegoat (Mrs Gandhi used it to justify Emergency in June 1975), and as a means of appealing to the mainstream left for its political support. Today, the CPI and CPM are once again out of tune with the majority of the masses who have not bought the "foreign hand" argument.
Then again, the CPM, which is itself inviting multinationals to invest in West Bengal, is hardly in a position to wage a principled and sustained campaign against the corruption of big business. This means that the far left 1 can at best carry out effective, though limited, propaganda on the issue. However, it is clear that in the future, corruption will be continue to be an issue 5 undermining the efforts of the Indian bourgeoisie to establish stable ideological hegemony over the country.* June 1, 1987 • International Viewpoint