SENATOR SPECTER'S VISIT TO ORISSA

UNCLAS SECTION 01 OF 02 CALCUTTA 000006 SIPDIS SENSITIVE SIPDIS E.O. 12958: N/A TAGS: PREL PARM ETRD ENRG KNNP TRGY IN BEXP SUBJECT: SENATOR SPECTER'S VISIT TO ORISSA CALCUTTA 00000006 001.2 OF 002 ¶1. (SBU) Summary: December 22-23 Pennsylvania Senator Arlen Specter, accompanied by his spouse Mrs. Joan Specter, Colonel Gregg Olsen, staff aide Scott Bowen Boos and medical escort Dr. Needleman, visited Bhubaneshwar, the capital of Orissa. While in Bhubaneshwar, Senator Specter met a range of key people including senior businessmen, government officials and elected representatives. He also visited the campus of leading Indian IT company Infosys and interacted the with company executives. During his meetings, Senator Specter spoke about the growing U.S.-India relationship, the civil-nuclear agreement and India's position as a counterweight to China in Asian geopolitics, as well as the situation in Iraq and the Middle East. While the Senator's comments on the nuclear agreement were given a polite hearing, Odissi politicians and business people prodded the Senator to help increase U.S. investment in Orissa, particularly in mining and manufacturing. End Summary. -- - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - Nuclear Deal and Energy Dominate Lunch Discussion - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ¶2. (SBU) Senator Specter and party, accompanied by Calcutta PAO and Economic Specialist FSN, began their visit to Bhubaneshwar with lunch at the residence of Mr. Vishambhar Saran, Chairman of Visa Steel Ltd., the largest steel company in Orissa. The approximately 40 guests included Secretary of the Orissa State Department of Energy Mr. Asit Kumar Tripathy, Chairman of the Grid Corporation of India (GRIDCO) U.P. Singh, Managing Director of the Industrial Development Corporation of Orissa (IDCO) Ashok Meena and Minister for Urban Development for the State of Orissa K.V. Singdeo. During his conversation with these individuals, Senator Specter spoke about the importance of the recent Indo-U.S. civil nuclear agreement, cooperation between the U.S. and India on nuclear issues, sanctions against Iran, and the development of Orissa's coal and steel industries. ¶3. (U) Energy Secretary Tripathy noted that both Orissa and Pennsylvania are prominent coal-producing areas, but that the quality of Pennsylvania's coal was superior to that of Orissa's. While Pennsylvania's 30 billion tons of coal reserves consists of quality bituminous and even higher-quality anthracite, Orissa's 60 billion tons of reserves were mostly high-ash lignite. According to Tripathy, it makes more economic sense to convert Orissa's coal to power at the pit opening rather than transport it to non-coal-producing areas, because power transmission is more efficient than moving large quantities of poor-quality coal by rail or truck. He used this opening, as did Mr. Saran, to ask Senator Specter if investment in Orissa's mining and manufacturing sectors was being considered by U.S. companies. Specter responded by saying that he was unsure if American businesses were considering such investment but that he would research the topic upon his return to the United States. ¶4. (SBU) Senator Specter asked Mr. Saran about India's international trade in steel. Saran responded that India has achieved a relative balance in imports and exports of steel. Asked about imports from the U.S., Saran responded that India only imports "specialized, high-quality" steel from the United States. He stated that a concern among Indian steel producers is the recent increase in the import of Chinese steel. -------------- -------------- Meeting with Chief Minister Naveen Patnaik -------------- -------------- ¶5. (SBU) In the early evening, after visiting the Bhubaneshwar campus of InfoSys, the information technology company based in Bangalore, Specter met with Orissa Chief Minister Naveen Patnaik at the State Secretariat. Senator Specter began the 30-minute courtesy call by saying that he saw the emergence of an economically vibrant India as an important, democratic "counterweight to China in terms of geopolitics" in Asia. He again noted the recent civil nuclear agreement between the U.S. and India, and remarked on how Congressional passage of the agreement marks the beginning of an era of increased cooperation betweens the two countries on several fronts. He expressed concern about the situation in the Middle East. "We are concerned about Iraq. There is a civil war there, although the administration does not want to admit it. The Middle East is a CALCUTTA 00000006 002.2 OF 002 tinderbox but our government does not want to admit this," Senator Specter remarked. Iran was another "enormous" problem and is actively involved in "sending rockets to Hamas to use against Israel," and he appreciated the recent support of the U.S. position on Iran by India in the United Nations. ¶6. (SBU) Chief Minister Naveen Patnaik responded politely to Senator Specter's statements, preferring instead to talk about the economic opportunities in Orissa for potential investors. He pointed out that information technology, steel, aluminum and power generation are sectors that are attracting large investment in Orissa. He said opportunities have opened up in the education and tourism sectors and that the "mood is optimistic." He pointed out that Orissa will soon be a power surplus state, and mentioned the recent signing of a memorandum of understanding with Mittal Steel for construction of a USD 10 billion integrated steel factory in Orissa. This is in addition to the USD 12 billion integrated steel factory that POSCO, a Korean steel company, is building in Orissa. Senator Specter and Chief Minister Patnaik finished the meeting with a lively discussion about the similarities and differences of political life in India and the U.S. The two leaders both agreed with Winston Churchill's opinion that "democracy is the best among many bad systems," in the words of the Chief Minister. -------------- --- Dinner hosted by Member of Parliament -------------- --- ¶7. (SBU) Member of Parliament Mr. Baijayant (Jay) Panda hosted a dinner at his residence in honor of Senator Specter. Panda is a member of the Rajya Sabha (Upper House of Parliament), representing the Biju Janata Dal (BJD),the dominant political party in Orissa. The BJD controls the Orissa State Legislative Assembly, in alliance with the BJP. Chief Minister Patnaik is the leader of the BJD and Panda is close to the Chief Minister. Present at the dinner were Orissa's leading industrialists, senior bureaucrats and business executives. After being introduced by Mr. Panda, Senator Specter spoke briefly and reiterated his theme that the recent civil nuclear agreement is good for India, and that close relations between India and the U.S. advances the worthy goal of providing a counterweight in Asia to the growing power of a "non-democratic China." Asked by Calcutta PAO if he considered himself and his party, the BJD, to be right-of-center politically (Note: BJD is an ally of the NDA. End note),Panda immediately responded in the negative, stating categorically that he and his party are "centrist." When asked about the BJD's relationship with the BJP, he said that it was strictly a "marriage of convenience." - - - - - - - Comment - - - - - - - ¶8. (SBU) Senator Specter's consistent message during his visit was that the civil nuclear agreement is a win-win proposition for both India and the United States, and he hammered away at his theme at every venue and every opportunity. A corollary to this theme, that India is a useful counterweight to a "non-democratic China," got a polite but unenthusiastic reception, while his message that a strong stance against terrorism should include sanctions against Iran generally left his audiences cold. While no politician or business person publicly disagreed with the Senator on any of these themes, it was clear that business concerns were more on their minds than politics. From the luncheon with business leaders, through the meeting with the Chief Minister, and through to the dinner with the Parliamentarian, the Indian side saw an opening to plug for more investment from the United States, especially in manufacturing and mining. The mood of the visit was summed up by the response of the Chairman of Visa Steel Ltd., Mr. Saran, to Senator Specter's statement that Iran was aiding terrorism by supplying arms to Hamas: "Yes, so I've heard. Tell me Senator, are Pennsylvania industries interested in investing in Orissa?" ¶9. (U) This message has not been cleared by Senator Specter's office. JARDINE