Bombings Undermine Bombay's Economy, Verve, and Prosperity

THE talk on the street in this bustling business center is no longer about share prices or how to make a fast buck. Instead, people talk about instability, bombings - and how to make a fast exit.

"The January rioting leached Bombay," says businessman N. P. Singh, referring to the anti-Muslim disturbances that killed more than 500 people and forced tens of thousands to flee the city. "Everybody started suspecting everybody." Then came last week's terrorist attacks, in which nearly 300 were killed in a series of 10 bombings. "The faith of the people," says Mr. Singh, "has been badly shaken."

Indian police have so far arrested 13 people in connection with the bombings, which are considered the largest act of urban terrorism in history. Last week, two more bombs exploded in Calcutta, India's most populous city, but authorities have not linked them to the Bombay attacks. On Wednesday a bomb demolished two apartment buildings and killed more than 80 people, and on Friday another blast rocked Calcutta's main train station, killing two and injuring 13.

Until recently, Bombay was a place apart - and above - the rest of India. It was an economic magnet that attracted Indians of all kinds, where matters of caste, religion, and language were subsumed in the general fervor of getting ahead. When residents read of religious or caste conflicts elsewhere in India, they thought such things could never occur in their towering metropolis on the Arabian Sea.

When riots broke out across India after the destruction of a mosque in northern India in December, however, they encompassed Bombay. In January, the chaos was Bombay's alone. Hindu mobs, organized by gangsters and a local militant Hindu-nationalist group, the Shiv Sena, descended on Muslim neighborhoods, and killed or evicted long-time residents. Then came last week's bombs. Altogether, more than 1,100 people have died in 13 weeks of unprecedented violence.

As a result, the magnet is starting to reverse its charge: a broad range of Bombay residents, from the well-entrenched to the recent arrivals, are thinking of heading out. Nowadays troubles don't bypass Bombay: They seem to start here.

"I'm single," says a United States-educated stockbroker here. "I can make my own mistakes. But anyone with children has to think of getting away. They have to think of their children's future. And there doesn't seem to be much of a future here."

To be sure, not everyone has the will or the means to leave Bombay. Says Rajdeep Sardesai, deputy editor of the Times of India, "This remains India's premier city of opportunity, especially for young professionals." The government's moves to liberalize the backward, inefficient Indian economy is just now getting into high gear. The first city to benefit from those liberalizations will be Bombay.

But tension is high in certain communities, especially among the city's Muslims. They started to leave when trouble broke out in January. Railway terminals were jammed with thousands of refugees in scenes reminiscent of 1947, when Pakistan was carved out of British-ruled India as a Muslim state. More than 100,000 Muslims fled in January, along with members of other minority groups, many from the south of India.

Some have returned to their apartments and jobs, but others have stayed away.

In February, the Muslim manager of a chemical company moved his family to Goa, a state south of Bombay. He then adopted his wife's name, which is Christian. In effect, he took on a new, safer identity in troubled times, which he could not have done in Bombay, where friends and neighbors knew him as a Muslim.

In January, Mohammed Asif shaved his beard, an identifying feature of many Indian Muslims, to protect himself from Hindu mobs. The beard has grown back but not Mr. Asif's former confidence in his future. "I want to go to Dubai and never come back to this city," says Asif, who owns a modest hotel here. "I've seen death with my own eyes and handled dead bodies with my own hands. No matter how much work you get or how much money you make, the end is going to be the same."

Many Muslims, like taxi driver Mohammed Hanif, cannot consider leaving. "If I leave Bombay," he says, "I won't be able to earn more money elsewhere." But Mr. Hanif is still planning a move - to an all-Muslim neighborhood or apartment building where he and his family can find safety in numbers.

The second most nervous class are those with an alternate place to live: for example, those with green cards or relatives abroad. "I went to one of the top schools in Bombay and half of my class is in America today," says Mr. Sardesai of the Times of India. In the past few years, India's economy has been steadily liberalized and a number of those migrants have returned to Bombay to take advantage of the growing financial and service sectors. Salaries do not match those in the US or Europe but they are ge tting close.

Many Hindu families left Bombay in January for their ancestral villages in the countryside, says K. M. S. Ahluwalia, India's top pollster. Most hope to return, he says, "but a lot will depend on the next six months. They all had contingency plans in case they couldn't come back."

A wide range of residents are thinking of leaving: clerks, professionals, and older couples nearing retirement. "There's no clarity in politics here," says a management consultant. "You can't tell what's going to happen; you can't see any leadership on the horizon."

Some predict Bombay's property market, which boasts land prices as high as in New York or Hong Kong, could crash in the future, particularly when foreign exchange regulations are loosened to allow Indians to invest in real estate overseas. The current value of a cramped Bombay apartment could buy a comfortable house - and a safer future - in a US suburb.