PUNJAB WORRIED ABOUT DRUGS AND JOBS, NOT TERRORISM

UNCLAS SECTION 01 OF 04 NEW DELHI 006311

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: PGOV PTER PHUM ECON EAGR SNAR ELAB EINV IN PK
SUBJECT: PUNJAB WORRIED ABOUT DRUGS AND JOBS, NOT TERRORISM



1. (SBU) Summary: In response to media reports warning of a
resurgence in Khalistani terrorism in Punjab and northern
India, Poloff traveled to Chandigarh August 4-5 to interview
government, business, police, civil society and political
leaders. They were uniformly unperturbed by reports of
militant arrests, attributing New Delhi's May 22 cinema
bombings to a few bad apples who will appear from time to
time. However, all highlighted increasing drug use,
cross-border drug smuggling, and poor job prospects for
uneducated rural Sikhs as imminent concerns for stability and
law-and-order in Punjab. The business community is
optimistic that smart policies will promote healthy economic
growth in Punjab's traditionally dominant agricultural sector
and newer high-tech sectors. While the bad apples may
continue to stir up trouble, Punjabis do not anticipate a
return to the violence of the 1980s, and are hopeful that
economic growth and reforms will usher in a return to the
pre-militancy golden days of prosperity. End summary.

Police and Government: It's Under Control
--------------


2. (SBU) While acknowledging that the recent Babbar Khalsa
International (BKI)-linked arrests indicated a serious effort
to cause mayhem, Punjab Home Secretary AK Dubey dismissed
Khalistani terrorism as a serious concern. In an open system
like India's, it is impossible to "stamp out" all "isolated
incidents" like this, he said. Assistant Director General of
Police (Crime) Anil Kaushik told us that while a few "bad
apples" like arrested terrorist Jagtar Singh Hawara could
always appear, the Khalistan movement does not have
sufficient manpower to destabilize Punjab as it once did.
However, he cautioned, if for other reasons (such as
widespread unemployment or poverty-based resentment) popular
discontent grows significantly, Khalistani activists will
find greater success in recruiting militants.


3. (SBU) Kaushik noted that the remaining Khalistan
terrorists had changed character, aiming now at targeted
assassinations instead of random terror-inducing attacks.
The few hard-core adherents are getting "more dangerous in
doctrine," he said, and possibly still maintain a few
underground cells. Nonetheless, the motivation has faded for
recruits, as the Khalistan ideal has little support in
contemporary Punjab society.

Punjab Prefers Peace, Terrorist Support Comes from Abroad
-------------- --------------


4. (SBU) HK Dua, editor of the Tribune newspaper, agreed
that the Khalistani agenda is dead, pointing out that the
public realizes Punjab's economy has become so integrated
into India's that a separate Khalistan is impossible.
Additionally, there is no irritant in Sikh-Hindu
relationships for militants to exploit. (Note: The August 8
release of an investigative report into government complicity
in the 1984 anti-Sikh riots stirred up old grievances, but
our interlocutors do not believe that it will be enough to
reignite the separatist movements. The PM's August 11
apology for government inaction has soothed anger over the
riots (septel). End Note) While BKI may try to raise its
head, the public favors nipping that movement in the bud, he
stated. Punjab has learned its lessons from eight years of
strife, and has no desire to repeat it.


5. (SBU) Herkewaljit Singh, editor of the Daily Ajit, agreed
that the Sikh population in Punjab is almost uniformly
opposed to Khalistani terrorism, and argued that BKI is now a
Europe-based organization, although Pakistan permits BKI
leaders to operate without interference as well. Akali Dal
leader Kawaljit Singh pointed out that organizing terrorism
in Punjab is very low cost. This enables a few committed
supporters both within Punjab and abroad to maintain some
level of activity despite a lack of popular support. The
fact that accused cinema bomber Hawara could reconstitute a
network of bombers within 18 months of his escape from prison
shows that the ground is conducive for recruitment of at
least a small number of discontented Punjabis. Hawara's
bombings and arrest were a "wake-up call" for the police to
remain vigilant, he said.

Pakistan Nexus?
--------------

6. (SBU) Our interlocutors disagreed on the source of
weapons and explosives reportedly seized from suspected
terrorists. Kaushik, Kawaljit Singh, and Dua argued that
smugglers along the Punjab border with Pakistan, routes
through Kashmir, and longer passages via Nepal had brought
the weapons and RDX from Pakistan. However, journalist
Herkewaljit Singh and human rights activists in Chandigarh
accused the Punjab Police of planting RDX during arrests to
frame suspected militants, and noted that the police have no
accounting system to track weapons and explosives seized for
evidence, allowing them to plant the same explosives several
times.


7. (SBU) Herkewaljit Singh and several human rights
activists also accused the police of engaging in a race for
arrests in order to boost their chances for promotions. Many
of those arrested have been casual contacts of other accused,
with no known involvement in terrorism. Kawaljit Singh
complained that Punjab Police like to arrest "105 people to
catch 5," giving them a chance to extort money from the
innocent before releasing them.

Discontent Stems from Rural Economic Frustration
-------------- ---


7. (SBU) Kawaljit Singh argued that the ease of recruiting
followers to play small roles in cinema bomber Hawara's
network highlights the problems posed by unemployment and
poor job prospects for rural young Punjabis. Fixing the
economy would take a decade, he said, but nonetheless, "I
don't see a terrorist movement erupting overnight," and any
disgruntled youth that "fall toward militancy" could be
stopped by vigilant policing. Human rights activist Inderjit
Jaiji of the Movement Against State Oppression warned that
economic discontent among young Punjabis indicated that any
future violence in Punjab would not be Khalistan-oriented,
but "a naxalite (peasant) uprising aligned with Khalistani
militants."


8. (SBU) Home Secretary Dubey admitted that apprehension
over future tension was well-placed, as job generation is a
primary concern for the Punjab government. Since agriculture
remains Punjab's most important economic sector, Dubey hoped
to see more crop diversification, growth in the food
processing industry, and more efficient marketing mechanisms
as a way to increase employment and revenues for farmers in
the state. The service sector, including information
technology and biotech, is also "looking up very fast," he
said, particularly in areas surrounding Chandigarh, which is
hoping to emerge as a northern Bangalore. However, rural
areas have not benefited from this service sector growth.


9. (SBU) Surinder Singla, the Punjab Finance Minister, told
us of the need for economic reforms to generate jobs.
Claiming that Punjab actually has high job generation, he
stated that many young Punjabis will not take
low-productivity positions, leaving them for migrant workers
from Bihar and Uttar Pradesh, while they hope instead for a
stable government job. He argued that the Punjab government
is bloated, and jobs would be created faster by trimming
government sector spending and employment and adopting
policies (such as infrastructure improvements) to encourage
growth in high-productivity service sector employment. He
also endorsed plans for crop diversification, including
investment and credit from large businesses in contractual
agreements with small farmers, and creation of a value-added
food processing industry in Punjab as a solution to
agricultural sector malaise.

Drugs Bigger Problem than Terrorism
--------------


10. (SBU) Home Secretary Dubey, ADGP Kaushik and other
leaders all identified increasing drug use as their number
one concern for law and order in Punjab. While Kaushik
stated that the illegal drug situation was only "gradually
deteriorating," Dubey characterized the increase in drug use
as an exponential explosion akin to HIV infection rates.


11. (SBU) According to HS Hanspal, ex-President of the
Punjab State Congress Committee, drug use has grown as part
of what he termed a Pakistan-supported destabilization
effort, and the abuse problem is worst along the Pakistan
border. However, while Dubey agreed that cross border drug
smuggling is largely responsible for the growth in drug use,
Kaushik pointed out that the abuse problem includes diversion
of opiates for legitimate pharmaceutical use, and abuse of
prescription medications. As of yet, Kaushik said, drug
smuggling has not been associated with increases in other
crime.

Comment: Terrorism Concerns Overblown
--------------


12. (SBU) Some of our interlocutors have suggested that
Pakistan may be trying to stoke a new phase of insurgency in
the Punjab, seeking higher returns for its actions than in
jaded Jammu & Kashmir. However, as in J&K, the population
has seen enough of the impact of terrorism and the resultant
state reaction, and appears to have no taste for renewed
militancy. Although the Punjab police still have a
reputation for overreaction and harsh tactics, fears of human
rights abuses and repressive policing no longer stir the
public to anger against the state. The efforts of outside
agitators, whether based in Pakistan or Europe, to stir up
rebellion in Punjab are likely to fall flat.


13. (SBU) Local leaders in Punjab present a generally
optimistic outlook for their state, in spite of their
concerns for employment and economic growth. As a result of
the turmoil of the 1980s and 1990s, Punjabis have seen their
state's per capita income, once the highest in India, fall
relative to the new hot spots of Indian economic growth, and
are now redoubling their efforts to regain their top place.
The efforts of Punjab leaders to position Chandigarh and
surrounding areas as a center for hi-tech companies have been
somewhat successful in attracting high-profile corporations,
and the agreement of leaders of both main Punjab parties on
the need for economic and agricultural reforms suggests that
their optimism may bear fruit.
BLAKE