ASSAM'S INSURGENT GROUPS QUIET FOR NOW BUT SOCIAL PROBLEMS

UNCLAS SECTION 01 OF 04 CALCUTTA 000418

SIPDIS

SENSITIVE

DEPT FOR SA/INS

E.O. 12958: N/A
TAGS: PGOV PHUM PINR ECON EINV EMIN ASEC SNAR IN BG
SUBJECT: ASSAM'S INSURGENT GROUPS QUIET FOR NOW BUT SOCIAL PROBLEMS
PERSIST

REF: CALCUTTA 00372


1. (SBU) Summary: November 5-10, CG made an introductory visit
to the State of Assam, the gateway to India's Northeast. Ethnic
insurgencies, poverty, drugs and economic stagnation have
plagued Assam in recent history. However, some positive trends
have emerged in moderating ethnic tensions and bringing economic
growth. The economic development may offer opportunities for
U.S. businesses that manufacture oil, pipeline and construction
equipment. The State's governing Congress Party is preparing
for elections in May 2006 and will likely see a reduction in
seats and a possible loss of power. HIV/AIDS, illegal narcotics
and tensions with Bangladeshi immigrants are persistent problems
for the State. However, with its resources and increased
interest by the GOI, Assam and the Northeast region could see
some economic and social improvements. End Summary.


2. (U) Assam a State the size of Mississippi with a population
of approximately 27 million people is the gateway to the other
Northeast States of India, also referred to as the "Seven
Sisters." The capital Guwahati's air links and businesses make
it a regional hub. The State, like the Northeast region as a
whole, is poor, having a State Per Capita Income of only USD
251, half of the national average. The population is ethnically
diverse with 45 different language groups. The Brahmaputra
River valley makes up 60 percent of the land and the State has
international borders with Bhutan and Bangladesh.

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Heart of Darkness on the Brahmaputra
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3. (SBU) The State's poverty and ethnic diversity has made it
the battleground for approximately 42 ethnic insurgent groups
including major organizations such as the United Liberation
Front of Asom (ULFA),the National Democratic Front of Bodoland
(NDFB),the Dima Halong Daogah (DHD) and the United Peoples
Democratic Solidarity (UPDS). The prevalence of these groups
has crippled the State's development and created a climate of
festering violence. The most recent outbreak was the shocking
tit-for-tat October killings between the Karbi and Dimasa tribal
groups in the Karbi Anglong district, which resulted in 78
deaths, many from brutal hacking and dismemberment (REFTEL).
Separatist group ULFA, however, has been the greatest concern
for the State and National Government. The fighting since 1982
for a separate socialist homeland, ULFA is believed to have 800
to 1,000 active members with another approximately 1,200
supporters providing safe houses, logistics and intelligence
assistance. Indian officials have claimed to CG that the group
has received training and weapons from Pakistan's Inter-Services
Intelligence (ISI); have links to Nepali Maoists; bases in
Bangladesh, where many of key figures, including its leader
Paresh Barua are in hiding; and until 2003, when Bhutanese and
Indian Armies attacked, had bases in Bhutan.


4. (SBU) During CG's visit ethnic tensions were on a low ebb
as State officials successfully mediated a truce between feuding
Karbi and Dimasa tribes; the ULFA has been quiescent as it
negotiates a potential settlement with the GOI and Bodo are
beginning to administer their new "Bodoland" district. In the
wake of the October Karbi-Dimasa killings, the Government of
Assam (GOA) moved quickly to bring the various tribal, community
and academic leaders together to negotiate an end to the
fighting. The head of a Ford Foundation funded Peace Study
Group said that the killing has stopped only temporarily. The
underlying problems of poverty, insufficient land and
opportunity remain and that fighting will likely flare again as
the 29 ethnic groups in the Karbi Anglong district compete for
scarce land resources.


5. (SBU) ULFA has also been quiet as negotiations between its
representative Peace and Consultative Group (PCG) and the GOI
began on October 26. Assamese author Indira Goswami leads this
group of key Assamese intellectuals and community leaders. No
ceasefire has been declared and security forces are still
conducting operations against members of the group in various
parts of the State, including Dhubri and Mangaldoi districts.
CG found no consensus on whether the negotiations would lead to
substantive results. GOA officials were concerned that ULFA has
initiated the discussions to provide breathing space to
reconstitute and arm as it struggles with recent setbacks, such
as the loss of bases in Bhutan in 2003 and the Indian Army's
success in killing and capturing many ULFA cadre in its
August-September attacks at Dibru-Saikhowa.


6. (SBU) The once militant Bodos have begun to administer
their new Bodoland Territorial Council (BTC),in what Chief
Minister (CM) Tarun Gogoi told CG he hopes will serve as a
potential model for other ethnic communities. The BTC,
constituted in June 2005, governs an area in the Northwest of
Assam made up of four districts, having the highest
concentrations of Bodos. Bodo leaders have been given
administrative authority to manage budgets, projects and civil
servants in the area of development and social services. GOI
and GOA officials are still responsible for security and law
enforcement. Locally elected Bodo leaders are now in charge of
social and infrastructure development priorities. CM Gogoi and
Home Commissioner Dr. Biren Gohain were very positive with the
results and the potential to apply this approach of giving
limited local control to ethnic groups as a way of meeting the
various groups' demands for autonomy. However, a GOA civil
servant told CG that the Bodo leaders are falling into the ways
of Indian politicians by squandering a USD 100 million-aid
package on contracts to family and cronies and building nice
homes for themselves. He noted that if roads are built, the one
in front of the home of the newly installed Bodo bureaucrat is
constructed first. Local academics also questioned whether
local autonomy initiatives would work for more scattered
communities and felt that ultimately the desire of so many
groups to have a degree of local control would conflict.


7. (SBU) HIV/AIDS and illegal narcotics are two problems that
will likely worsen given the social dynamics and lack of
awareness. According to Assamese official figures, of 50,779
blood samples screened up to July 2005, 920 cases were HIV
positive, with 315 AIDS cases. Since May 2002, the Voluntary
Confidential Counseling and Treatment Center in Dibrugarh (upper

SIPDIS
Assam) has tested approximately 500 people with 38 HIV positive
results. However, the State's leading HIV/AIDS specialist Dr.

S. I. Ahmed questioned the efficacy of the State's sentinel
surveillance mechanism and felt HIV/AIDS infection rates were
underreported. Especially, considering neighboring states
Manipur has the highest concentration of HIV/AIDS infection in
India and Nagaland has an epidemic rate of infections as well.
He also noted a growing anecdotal trend in illegal narcotics
abuse, with drugs coming from neighboring Burma. He showed CG
photographs of few hundred recently seized methamphetamine pills
with "WY" imprints. (Note: The United Wa State Army (UWSA),one
of the largest drug cartels in the world, operates out of
Northeast Burma and produces huge quantities of methamphetamine
with similar imprints.)

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Money Offers a Silver Lining
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8. (SBU) Assam's difficulties have drawn GOI's attention and
the State, like the rest of the Northeast, enjoys "special
category" status for additional funding. The GOI Central Plan
allocated Assam USD 695 million for 2005-2006. Assam receives
among the highest per capita GOI funding in the country. The
Asian Development Bank has also been very generous, giving USD
100 million in loans in the last two years for power and
development programs. CM Gogoi was very upbeat about Assam's
financial position in his conversation with CG, noting that
government salaries were now being paid on time - a departure
from the past.


9. (SBU) In the State capital, Guwahati, the large inflow of
money is fueling a building boom. Three large, modern shopping
malls were already completed, with three more under
construction. A surprising number of new car dealerships,
restaurants, and multi-story offices, hospitals and apartment
building were also evident. The Taj Hotel chain reportedly will
construct a 5 star hotel in the city and Jet Airways announced
that its Calcutta - Guwahati route, a route it is required to
fly by the GOI, is finally making money for the airlines. All
contacts told CG that the building boom was the result of
misappropriation of public funds or "money laundering," as
described by one businessperson. Even the CM admitted to CG
that Guwahati's growth was partly attributable to "leakages" of
money meant for infrastructure development. This graft has
meant that public funds are not being used to finance critical
infrastructure in the poor rural areas of the State to
facilitate broadening of economic development but are begin used
in Guwahati, where the benefits are enjoyed by the urban elites.

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Tea and Oil
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10. (U) Assam's two major industries are tea and oil. Assam
produces 55 percent of India's 865 million kg output of Tea.
However, the Tea industry has been in a recession since 1998
from excess production and loss of markets in Russia and
Pakistan and the increase of cheap low quality tea from small
producers. The State's 845 large gardens constitute 226,000
hectares and employ 556,000 permanent workers.


11. (U) Assam also has India's largest proven onshore oil
reserves of 2.9billio barres - 45percent of the country's
proven reserves and 15 percent of its crude output. Private
sector Assam Company Ltd. (ACL) recently struck oil in two new
sites in Amguri and Assam Arakan with reserves of approximately
15 million barrels and 50 million barrels respectively. In
addition, the Amguri field is estimated to have 45 billion cubic
feet of natural gas. ACL plans to invest USD 645 million to
construct 16 wells to exploit these reserves. CG met with
officials of public sector Oil India Limited (OIL),which
operates India's longest oil pipeline of 1,157 km through the
State. The oil sector constitutes a significant sales
opportunity for U.S. manufacturers. OIL officials noted that
they plan to expand the pipeline and to upgrade existing
equipment, expressing a strong interest in U.S. manufactured
equipment. OIL also wants U.S. technology to improve oil
extraction techniques.

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State Elections in May 2006
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12. (SBU) The ruling Congress Party is hoping to use the recent
economic improvements and the ULFA peace negotiations to win
again in the May 2006 elections. However, all contacts believed
the election would be very close, possibly with no clear
majority. Even State Congress Party Spokesman Abdul Khaleque
admitted Congress would likely lose seats in the next election.
A GOA election official was more pessimistic, saying he believed
the Congress Party would lose the election. However, the
opposition Asom Gana Parishad (AGP) is also experiencing
infighting and is competing with the breakaway AGP (Progressive)
party for the opposition votes. The Muslim community, which
constitutes 30 percent of the State population, is also an
important vote block. Congress ally Jamiat Ulema-e-Hind party,
upset with perceived lack of Congress support for the Illegal
Migrants Determination by Tribunals Act, repealed by the Supreme
Court in July, have floated forming a United Democratic Front
with support of 20 minority groups.


13. (SBU) According to Commissioner & Secretary to the Chief
Minister Dr. Biren Gohain (Protect),illegal immigration of
Bangladeshis will not be addressed prior to the elections.
Because of the importance of the Muslim vote for the Congress
party, no action will be taken to push restrictions on illegal
immigration for fear of offending the Muslim community. Six
million illegal Bangladeshis are estimated to be living in Assam
and dominate the State's southern five districts along the 272
km border with Bangladesh.

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Comment
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14. (U) Assam is the economic and transport hub for India's
Northeast States. Like the rest of the region, it experiences
serious problems of poverty, insurgency, drugs and HIV/AIDS.
Despite the extensive corruption, some positive changes are
happening on the economic front. However, the limited positive
economic news will likely not be sufficient to give the Congress
Party a definitive win in the State.
JARDINE