WEST BENGAL COMMUNIST PARTY LEADER EXPRESSES PRO-CAPITALIST

UNCLAS SECTION 01 OF 03 CALCUTTA 000330

SIPDIS

SENSITIVE

DEPT FOR SA/INS

E.O. 12958: N/A
TAGS: PGOV PREL PINR ECON EINV IN BG NP
SUBJECT: WEST BENGAL COMMUNIST PARTY LEADER EXPRESSES PRO-CAPITALIST
POLICY


1. (SBU) Summary: On September 6, CG met State Secretary of the
Communist Party of India - Marxist (CPM) and Politburo and
Central Committee member Anil Biswas. While focusing on the
need for industrialization in West Bengal, Biswas said that
foreign direct investment (FDI) is welcome from any country.
Land primarily from urban areas and belonging to closed
industries would be allotted for new industry, keeping in mind
the interests of peasants. Biswas characterized the labor
situation as much improved with disputes being solved quickly.
He also noted Maoists and Bangladeshis are a cause for concern
in the state. Although the Left supports the Congress at the
Center, it will seriously contest the 2006 state Assembly
elections and is confident of retaining power. The CPM supports
the emerging India-US relationship, but has reservations on the
strategic alliance. End Summary.


2. (SBU) On September 6, CG had his first meeting with West
Bengal's CPM State Secretary Anil Biswas and State Committee
member and Assistant Editor of party daily "Ganashakti," Avik
Dutta. Biswas, a CPM Politburo and Central Committee member, is
known to be West Bengal Chief Minister (CM) Buddhadeb
Bhattacharya's closest confidante and a driving force behind the
State's economic reform program. Young and dynamic, Dutta is
being groomed as a future CPM leader and is a close aide of
Biswas. Both Biswas and Dutta were very open and frank in
discussing a full range of issues.

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Bid for FDI
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3. (SBU) In a fascinating break from its traditional Marxist
ideology, Biswas categorically stated that the CPM welcomes
capitalism and investment, "be it from Indonesia or the US," as
long as it is consistent with State laws. He emphasized that
the Central Committee has accepted the "spirit" of CM
Bhattacharya's market driven economic planning, saying that it
is no departure from the party's resolution and policy
statements. Biswas explained that according to these party
policies, CPM has no objection to foreign direct investment
(FDI),provided investors abide by regulations and generate
employment. He said that the CPM is a democratic party in which
self-criticism is present, but a consensus has been reached in
favor of industrialization since the goal for West Bengal is to
regain its "pre-independence position" as an economically
advanced State. Biswas clarified that knowledge-based
industries such as IT, biotechnology as well as chemical
industries are especially welcome. He maintained that new
industries are to be established without destroying traditional
ones.

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The Land Question
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4. (SBU) On the contentious issue of allotment of land for
industrial purposes, Biswas said that only land around cities
would be utilized for industrialization and not in remote rural
areas. The peasants' interests are to be protected through the
maximum utilization of wasteland. 40,000 acres of land belonging
to closed industrial units are to be distributed for industry,
commercial complexes and real estate business. The focus is
currently on land surrounding Calcutta in South 24-Parganas,
Howrah, Burdwan and West Midnapore. Some areas have already
been allotted to Indian business groups. (Comment: Use of
agricultural land for industrialization is a highly sensitive
issue in West Bengal and for the CPM. The CPM's political base
is in the rural areas where the party had great success in
establishing its dominance through distribution of land to poor
farmers as part of a program of land reform in the late 1970's.
The CPM is especially sensitive to charges from allies like the
Forward Bloc and the opposition that the CPM is now abandoning
the farmers for industry. End Comment.)


5. (SBU) However in South 24-Parganas, some agricultural land
would be taken from local farmers for industrial purposes and
the dispossessed would be compensated. Biswas admitted that
details on the much-publicized Indonesian Salem Group's
investment in West Bengal may be exaggerated - instead of the
projected Rs. 40,000 crores (approximately $ 9 billion),the
actual investment over a period of 15 years may not exceed half
the amount. The project would include the establishment of a
township and a factory for scooters/motorcycles.


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Improved Labor Scenario
--------------


6. (SBU) When asked about the labor scenario in the State,
Biswas offered a striking change from the past as he explained
that although the party does not restrict the democratic rights
of workers, the CPM now accepts that industry cannot survive
without improvements in productivity. The government and party
are active in settling labor disputes through negotiation and
the last few years have seen an improvement in the situation.
He cited recent examples of disputes involving the tea and coal
sectors that were peacefully and speedily resolved with input
from industry.

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Tackling Maoists & Bangladeshis
--------------


7. (SBU) Biswas and Dutta candidly admitted their party's
concern on two problematic issues: Maoist activity and
Bangladeshi migration into the state. Biswas said that Maoists
are active in Purulia, Bankura and Midnapore where landless
peasants and tribals are common. The party is fighting the
extremists ideologically and politically with the assistance of
its cadres. (Note: A website of the ultra-left extremist
Communist Party of India - Maoist has charged CM Bhattacharya's
government of attacking "comrades" and claimed to have given a
fitting reply by killing three CPM leaders in July. End Note.)
While acknowledging that Bangladeshis are entering the state in
numbers, Biswas maintained that the CPM, unlike the BJP, does
not believe in labeling Hindu Bangladeshi migrants as refugees
and the Muslims as illegal entrants. He said that the problem
is humanitarian in nature and should be settled amicably between
India and Bangladesh. (Comment: For decades Bangladeshis
constituted a part of the CPM's vote bank. Recently, CM
Bhattacharya has voiced his concerns on possible security
threats if the influx continues unabated. End Comment.)

--------------
Friend in Delhi, Foe in State
--------------


8. (SBU) The leaders clarified that the Left supports the
Congress-United Progressive Alliance (UPA) in Delhi on the basis
of the Common Minimum Program (CMP). However, relations between
the Congress and the CPM are "sweet and sour," and in the state
Assembly elections scheduled for 2006, the Left will seriously
contest the Congress. At the Center, the CPM supports the
Congress not because they share common principles but only to
keep out the BJP. A Congress-Trinamul Congress alliance in the
State is possible, but the CPM is not worried since its enhanced
support base was evident when it won the May-June municipal
elections. Biswas asserted that the Left would continue to
support the Congress at the Center despite the approaching state
elections and sounded confident that the Left would return to
power in West Bengal since the Congress can provide no
alternative. He predicted that the CPM would win at least 170
of the 294 Assembly constituencies.

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No Support for Strategic Alliance With U.S.
--------------


9. (SBU) When asked by CG what he thought of the Indian Prime
Minister Manmohan Singh's recent visit to Washington, D.C., the
Left leaders responded that his visit was a positive development
and all emerging ties between India and the U.S. are welcome,
barring those on military and strategic issues. Biswas
explained that close defense cooperation could lead to further
complications by exacerbating the growing plague of secessionist
forces in the Indian subcontinent. Strategic affairs being very
sensitive and the U.S. already being a strategic ally of
Pakistan, the CPM would not want India to be in a similar
relationship with the U.S.


10. (SBU) Comment: The meeting with the CPM State Secretary and
Assistant Editor of its mouthpiece newspaper "Ganashakti" was
striking in its friendly and frank tone, especially given the
CPM's past virulent anti-capitalist and anti-American views. CG
was struck by the dissonance of Biswas saying the CPM desired
private investment and a market economy while a red hammer and
sickle flag was prominently displayed behind him. The CPM in
West Bengal has clearly changed its views on capitalism and the
party fully supports CM Bhattacharya's efforts to attract FDI.
Though their presence is limited, Maoist insurgents are a major
concern for the CPM as they have been executing CPM
functionaries in what both groups recognize as the CPM's
historic political base. The Maoist threat in West Bengal has
resonance for the CPM as it constitutes not only a security
challenge but also an ideological one, just as the CPM is
attempting to move its economic policy to the center.



JARDINE