WHAT DOES NANDIGRAM MEAN FOR THE CPM?

UNCLAS SECTION 01 OF 03 KOLKATA 000104

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV PHUM PINR SOCI PREL IN
SUBJECT: WHAT DOES NANDIGRAM MEAN FOR THE CPM?

REF: KOLKATA 95, KOLKATA 92, KOLKATA 88


1. (SBU) Summary: The March 14 Nandigram violence resulted in
at least 14 deaths, badly damaged Chief Minister Buddhadeb
Bhattacharjee's administration and revealed the ruthless face of
West Bengal's ruling Communist Party of India - Marxist (CPM).
It also shifted the dynamics between the CPM and its partners.
The CPM's national leadership has expressed support for
Bhattacharjee's administration and for continued economic
reforms and industrialization (though on a smaller, less visible
scale),but Bhattacharjee will now be more susceptible to the
influence of CPM nonagenarian and former Chief Minister Jyoti
Basu and other CPM hardliners, as well as W. Bengal's Marwari
industrialists. As a result, W. Bengal's economic future will
be influenced by those with a history of inhibiting economic
progress and maintaining xenophobic policies. The CPM is part
of the four party Left Front (LF) alliance that keeps the UPA
government in power, and Nandigram developments may overflow
into New Delhi politics. Some are speculating that a distracted
CPM will be less confrontational with Congress on the economic
agenda. End Summary.


2. (SBU) The death of at least 14 people protesting the GOWB's
Special Economic Zone policies in the rural district of
Nandigram, has prompted opposition groups to challenge CPM
dominance in West Bengal (reftels). However, the fallout from
Nandigram may be felt most keenly within the CPM itself.
Contacts told post that the mood after Nandigram among the CPM
"old guard," led by former Chief Minister Jyoti Basu, is rather
"upbeat." These ideological hardliners regard Bhattacharjee as
a liability -- especially in the run-up to village-level
Panchayat elections scheduled in 2008 -- because of his
departure from traditional party dogma (and willingness to
loosen CPM control over economic interests in the state). Some
criticized the CM openly after the Nandigram incident. This
faction, which includes such figures as Land Reforms Minister
Rezzak Mollah, Minister for Housing Gautam Deb, Transport
Minister Subhash Chakrobarty, and President of the Krishak Sabha
(the CPM's Peasant's Wing) Benoy Konar, would welcome
Bhattacharjee's departure as Chief Minister. The names of Deb,
Finance Minister Asim Dasgupta, and Commerce and Industries
Minister Nirupam Sen are already making the rounds as possible
replacements. The hardliners see them as more malleable and
easier to influence.

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Complete Control
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3. (SBU) Within the Bhattacharjee administration, there are two
committees that are supposed to be involved in the government's
decision-making processes. One is the Cabinet Core Committee
(CCC),which includes ministers from each Left party such as:
Bhattacharjee (CPM),Nirupam Sen (CPM),Nandagopal Bhattacharya
Communist Party of India (CPI),Kshiti Goswami Revolutionary
Socialist Party(RSP),Naren De (Forward Bloc),and Kiranmoy
Nanda (Socialist Party),etc. The composition of the CCC is not
permanent, and changes over time.


4. (SBU) The other committee is the Left Front Committee (LFC),
chaired by state CPM General Secretary Biman Basu. Its
representatives are the heads of the Left Front partner parties.
Over the past couple of years, both the LFC and CCC have only
met 5-6 times. Bhattacharjee and Commerce and Industries
Minister Sen have tended to make major decisions on their own,
rendering the existing committees irrelevant. There is no
regular schedule of committee meetings, and the committees are
called together only for special reasons (usually after pressure
by Left Front partners.)


5. (SBU) After Nandigram, the Left partners demanded regular
committee meetings, and called for Bhattacharjee to consult the
committees before making major decisions. (Comment: The CPM's
"junior partners" in the Left Front government have for a long
time felt out of the loop on decision making in W. Bengal. Many
are unwilling now to take any blame for Nandigram, claiming they
tried to warn CPM leaders about brewing tensions there. CPM
leaders have, for their part, tried to cast aspersions on the
ultra-Leftists who participated in the Nandigram violence and
have questioned the loyalty of some Left parties they accuse of
supporting the protestors. End Comment.)


KOLKATA 00000104 002 OF 003


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Should he stay or should he go?
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6. (SBU) CPM General Secretary Prakash Karat and other national
CPM officials expressed support for the Bhattacharjee
administration in recent statements, most likely as a form of
damage control. However, there is a clear sense that with
Bhattacharjee weakened, the CPM hardliners have more say in
government affairs. Although unlikely to immediately step-down,
Bhattacharjee could be moved out of the position, ostensibly for
health reasons. Bhattacharjee suffered a mental breakdown 15
years ago, and a Post contact close to the Chief Minister said
that he is showing signs of severe stress. If Bhattacharjee
does step down, he will likely depart in a manner designed to
save face for the CPM.

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Clampdown
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7. (SBU) The re-emergence of the old guard's influence in W.
Bengal would make it more difficult for the current UPA
government to go forward on economic reforms. The CPM
leadership will adopt a more conservative approach on national
policy issues, and be more resistant to change. In addition,
the party will be determined to demonstrate that it has not been
weakened by Nandigram, and will lash out to show its strength.
This was evidenced by Prakash Karat's editorial entitled "Let
the Truth Be Known" in "People's Democracy," a CPM-run news
outlet which he edits (text is available at
http://pd.cpim.org/2007/0325/03252007_prakash .htm). The party
will also attempt to shift the blame for Nandigram to others.
CPM leader Sitaram Yechury has already claimed that it was the
UPA's SEZ policy which fostered the violence.


8. (SBU) A Bhattacharjee departure would also be something of a
victory for Kolkata's traditional business elite, the
influential Marwari families, some of whom (the Goenkas,
Budhias, and Neotias),manage large scale economic operations in

W. Bengal. Many Marwaris enjoyed a cozy relationship with
former CM Jyoti Basu. Harsh Neotia, for example, was granted
free land concessions to assist its real estate development
projects by the pre-Bhattacharjee administration, resulting in
encroachment on environmentally-sensitive areas, shoddy
construction, and reportedly high levels of graft. The Marwaris'
track record in the last 30 years points to a pattern of crony
capitalism and industrial mismanagement at the expense of
economic development. In addition, Marwari business leaders,
while outwardly claiming openness to economic liberalization,
often behind-the-scenes undermine proposals for greater economic
reforms. For example, Marwaris opposed foreign direct
investment in retail, which they viewed as inimical to their
business interests.


9. (SBU) During his rise to the Chief Minister post in 2000,
Bhattacharjee distanced his administration from some of these
influential Marwari businessmen. Instead, he sought to
cultivate more Bengali business interests such as bringing in
Indonesian-based Bengali businessman Prasun Mukherjee to
facilitate the investment of Indonesian company Salim Group in
the Nandigram SEZ.

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The Word From Delhi
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10. (SBU) Harish Khare is the influential editor of "The
Hindu," and is closely linked to the CPM leadership in Delhi.
He told Poloff that there is no break between Kolkata and Delhi
on economic policy, deriding the post- Nandigram speculation as
"political theater" staged by the CPM. Khare pointed out that
as a cadre-based party, all major decisions are approved by the
Delhi leaders. Khare insisted that Bhattacharjee won prior
approval for his investment policy using the argument that the
GOWB needed capital to attract investment that would otherwise
go to other states. Khare assured Poloff that the CPM had no
intention of making Bhattacharjee the "fall guy" for failed
economic policies, but would rather "go back to the drawing
board," and try to "learn from its mistakes." In Khare's
assessment, the Nandigram will result in a "course correction,"

KOLKATA 00000104 003 OF 003


but was viewed as a "tactical mistake," rather than strategic
and will not cause the CPM to backtrack.


11. (SBU) "Hard News" Editor Sanjay Kapoor emphasized that
Nandigram was a huge public relations blow to the CPM. He and
Khare agreed that many female protestors had been raped by
police, and that the CPM had hired professional criminals to
drive protesters from the site. This, emphasized Kapoor, had
caused a "crisis" for the CPM, by exposing its authoritarian
face. The weakened party will now become increasingly
introspective, he predicted, and would be less capable of
opposing the UPA on the nuclear deal and other foreign policy
issues.

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Comment
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12. (SBU) While the Left has been diverted by Nandigram
developments, which have resulted in some internecine conflict
between nascent CPM factions and the CPM and other Left parties,
it is unlikely to have much effect on the CPM's contentious
relations with Congress in New Delhi. The Delhi-based CPM
leaders have already indicated that they remain as ready as ever
to oppose "globalization" as propounded by Chidambaram, Manmohan
Singh and the "neoliberal" camp within Congress. This is
partially the result of fortuitous circumstances. The CPM is
well-aware that Congress has been wounded by recent electoral
defeats and is facing tough electoral contests against a
resurgent BJP in Uttar Pradesh and other upcoming state
elections and is itself too distracted to do battle on economic
and foreign policy issues.


13. (SBU) The survival or fall of W. Bengal's embattled Chief
Minister will not be determined by external factors, but rather
by internal Left dynamics. In the confrontation over economic
reform, those wanting a return to earlier certainties and cozy
business relationships would be happy to see him go. However,
Bhattacharjee's situation is linked to the state's economic
performance. After Nandigram, business projects have been put
on hold, land costs are escalating and businesses hesitating to
make additional investments in the state. To reduce his profile
and discourage further violence, Bhattacharjee may keep business
projects out of the public eye. Bhattacharjee's post-Nandigram
weakness is allowing the CPM old guard and its business supports
to regain their voice. Although CPM hardliners hope the Left
tail will wag the UPA dog at the center on crucial issues of
economic policy, the party may be less assertive until it
recovers from the shock of Nandigram and resolves internal
issues.
JARDINE