CONGRESS SLIDES; COMMUNIST PARTY SET TO

UNCLAS SECTION 01 OF 03 CHENNAI 002480

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: PGOV PINR IN
SUBJECT: CONGRESS SLIDES; COMMUNIST PARTY SET TO
RECLAIM KERALA

Ref: (A) CHENNAI 01265 (B) 04 CHENNAI 01008


1. (SBU) SUMMARY: The ruling Congress-led coalition's
slide continues in Kerala and will likely end in its
defeat in the 2006 state assembly elections. In a
state where anti-incumbent voting is the norm, the
Opposition Left Front, led by the Communist Party of
India (Marxist),is directly benefiting from the
growing unpopularity of the state government. Shocked
by the series of recent local electoral debacles, Chief
Minister Chandy is expected to make an all-out effort
to reverse the trend. He hopes to win the November 18
Lok-Sabha by-election in Thiruvananthapuram and to
change policies in the remaining six months to project
a pro-poor image. That, however, is unlikely to undo
the damage done by four years of internal dissent in
the Congress party and the May 2005 party split. END
SUMMARY

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OPPOSITION SWEEPS KERALA VILLAGES AND TOWNS
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2. (SBU) Kerala's September 24-26 elections to village
and municipal councils confirmed the growing
unpopularity of the current Congress-led state
government. Out of 999 village "panchayats", the
Opposition Left Democratic Front (LDF) led by the
Communist Party of India (Marxist) won 659, giving away
only 221 to the Congress-led United Democratic Front.
CPI(M) alone won 598. The BJP could win only four. In
the state's 51 Municipalities, the LDF captured 32
chairman positions, while the UDF won only 18. The BJP
captured a majority in one Municipality (Palakkad). In
the cities, the LDF lead was stunning; they bagged all
five of the City Corporations in Kerala.

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PARLIAMENT TO PANCHAYAT DOWNWARD SLIDE CONTINUES
-------------- --------------


3. (SBU) The leftist landslide victory was a repeat of
the 2004 Lok Sabha elections when it won 19 of the
state's 20 seats. At that time, beleaguered Congress
leader Antony was the Chief Minister, facing relentless
feuding with octogenarian Congressman Karunakaran and
his son Muraleedharan. The upshot of that election was
two-fold: Antony resigned from his Chief Ministership
giving way to Oommen Chandy (Reftel B),and Karunakaran
split the party (Reftel A) forming the Democratic
Indira Congress - Karunakaran (DIC-K). In the recent
local government elections, the DIC-K had formed a
tactical understanding with the LDF in many districts
to defeat the Congress.

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KARUNAKARAN'S PARTY SMALL, BUT CAN BE CRUCIAL
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4. (SBU) Knowledgeable sources acknowledge
Karunakaran's contribution to the Leftist victory, but
point out that he can at best influence only 5-10
percent of the votes in most places. "In panchayat
elections, where small margins are enough to tilt the
balance, even a 5 percent vote shift becomes critical", said
Madhavan Nair, a senior journalist with The Hindu at
Kozhikode in North Kerala.

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CHANDY'S DEVELOPMENT AGENDA DOESN'T APPEAL TO VOTERS
-------------- --------------


5. (SBU) Chandy's focus on initiating a few big
infrastructure projects is not appealing to the masses,
according to M.J. John, the Bureau Chief of Kerala's
biggest daily, the Malayala Manorama. The Dubai
Internet City project for Cochin (expected to create
33,000 jobs),metro rail projects for Cochin and
Thiruvananthapuram, facilitating Cochin Port's
expansion and privatization plans, and the expansion of
the Cochin International Airport, are some of the
projects on which the Chief Minister has focused over
the past year. "The voting population in general does
not consider these huge projects as directly benefiting
them. On the contrary, they provide opportunity for
the Opposition to raise allegations of corruption",
says John.

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CHANDY WILL CHANGE COURSE; PROJECT A PRO-POOR IMAGE
-------------- --------------


6. (SBU) Advisors to the Chief Minister and member of
the Kerala Planning Board, G. Vijayaraghavan (former
CEO of Kerala Technopark) (protect) told Post that in
an informal survey conducted at the Thiruvananthapuram
Technopark where over 5000 young people work, he found
that only 3-4 percent of them voted. "These are the people
who should naturally support pro-investment
initiatives, but they don't care", said Vijayaraghavan.
He told Post that over the next six months leading up
to the May 2006 elections, Chief Minister Chandy would
make necessary policy changes to project a "pro-poor
image."

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ALL EYES ON A LOK SABHA BY-ELECTION
--------------


7. (SBU) With the Panchayat elections behind them, all
eyes are now on an upcoming Lok Sabha by-election in
Thiruvananthapuram, slated for November 18. A three-
cornered contest is in the cards, between the UDF, LDF
and BJP. The UDF candidate, a local Congress youth
leader, is an upper-caste (Nair) Hindu while the LDF
candidate belongs to the backward (Ezhava) caste. "It
will be a tough fight", said Gouridasan Nair,
Thiruvananthapuram Correspondent of the Hindu,
"although the LDF has a head-start due to the wide
margins of victory in the 2004 elections." The BJP is
also strong in this constituency, and was a close third
in 2004. Although the BJP has grown in pockets of
Kerala, overall the party commands only about 6 percent
of the vote and has little hope of coming to power in
the foreseeable future. "Chief Minister Chandy will
make an all-out effort to capture the constituency",
said Vijayaraghavan, "because that will create a huge
impact in the 2006 elections."

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COMMUNAL PREJUDICES TOO STRONG TO BEAT
--------------


8. (SBU) None of our sources believe that Chandy can
turn the Congress around before the 2006 elections.
"One can only hope for an honorable defeat in 2006",
said John, "even if the UDF retakes the
Thiruvananthapuram seat in November." He attributes
many of Chandy's problems to issues of perception.
Chandy is a Christian, belonging to one of the many
branches of the Orthodox Church that exist in Kerala.
It is hard for him to beat the strong communal
prejudices that come to the fore in elections. Some
detractors effectively insult the government as a
coalition of Muslims and Christians, particularly after
Karunakaran, an upper caste Hindu, left the Congress.
Chandy's initiative to appoint Ramesh Chennithala, an
upper-caste Hindu, as state party leader has not fully helped to reco
lost ground.

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COMMUNIST INFIGHTING DOESN'T SPILL OVER TO POLLS
-------------- ---


9. (SBU) It is widely known that the Communist Party of
India (Marxist) also has internal problems in Kerala,
particularly between the camps of two Chief Ministerial
aspirants, Pinarayi Vijayan and V.S. Achuthanandan.
Although Kerala media has exposed the internecine feud,
the leftist rank and file has shown remarkable
restraint in recent elections and has not let the feud
affect the electoral prospects of party candidates.

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AGGRESSIVE MEDIA PROMOTES ANTI-INCUMBENT VOTING
-------------- --


10. (SBU) COMMENT: Kerala politics continue to be
marked by the traditional rivalry between the UDF and
the LDF, who, since the 1980s, have regularly
alternated in power. An inexorable tide of anti-
incumbency sentiment always begins to flow immediately
after an election. A highly aggressive media, both
print and TV, in the highly literate state, plays a
major role in exposing the parties in power. The media
had feasted on the internal dissentions in Congress,
ending in the formal split in 2005; now it is too late
to undo the damage.


11. (SBU) A fallback to populism, particularly in the
run up to the elections, is the natural option for
state governments, particularly as they view the
electoral defeats of former Chief Ministers of Andhra
Pradesh and Karnataka, Chandrababu Naidu, and S.M.
Krishna, as resulting from their "excessive reformist
zeal." However, Kerala Chief Minister Oommen Chandy's
problem is that, even if he decides to play pro-poor,
he can never hope to match his Opposition, the
Leftists, in that game. At this point, he can only
hope for the cracks within the CPI(M) leadership to
widen. His chances are slim. END COMMENT.


12. (U) This message was coordinated with Embassy New
Delhi.

HOPPER