KERALA COMMUNISTS LEAVE U.S. COMPANY'S DONATED BOATS HIGH

UNCLAS CHENNAI 000032 SIPDIS SENSITIVE SIPDIS E.O. 12958: N/A TAGS: PGOV ECON EAID PREL IN SUBJECT: KERALA COMMUNISTS LEAVE U.S. COMPANY'S DONATED BOATS HIGH AND DRY ¶1. (SBU) SUMMARY: Twenty fishing boats lie unused sixteen months after they were donated by an American company to help rehabilitate a tsunami-affected coastal fishing community in the South Indian state of Kerala. Even though a tsunami-affected fishing community is standing by in need of boats, bureaucratic incompetence mixed with distrust of all things American -- even a purely philanthropic gesture -- has left the 240 families high and dry. The episode illustrates Kerala's governance problems, which have only increased since the Communist-led Left Democratic Front took power in 2006. END SUMMARY. GOVERNMENT BUREAUCRACY BEACHES DONATED BOATS -------------- ¶2. (SBU) In January 2005, Brunswick Corporation, an Illinois-based manufacturer of marine boats, offered to donate 20 motorized, 11-meter FRP (Fiber Reinforced Plastic) boats to assist in tsunami rehabilitation in India. USAID initially expressed reservations about the donation as the boats were of a different type than those lost by the fishermen in the tsunami and because Brunswick had not identified potential beneficiaries. There were also concerns on the part of the fisheries sector that use of the boats could have a negative impact on fish stocks. After some time the private charity C.J. Development Corporation was identified to help facilitate the donation. The boats, which arrived in Kerala in November 2006, are valued at approximately one million dollars. ¶3. (SBU) Brunswick donated the boats through Esmario Export Enterprises, its India dealer. Esmario, in turn, gave the boats to C.J. Development Corporation, which was to distribute them to needy fishing families. The charity group then asked the government for assistance in identifying a fishing community in need. The state decided to set up a committee in the Fisheries and Revenue Departments with the sole purpose of identifying beneficiaries, a process that took several months. When frustrated Esmario representatives inquired about the delay in identifying beneficiaries, they were told that the delay was due to the change in government and the required "procedural formalities." (NOTE: The Communist Party of India (Marxist)-led Left Democratic Front took power in May 2006, more than three months before Brunswick donated the boats. END NOTE.) ¶4. (SBU) A contact at the C.J. Development Corporation told us that the government committee, which was set up in early 2007, has not yet been able to finalize the beneficiaries. He said that the committee met on January 16 to consider a draft list, but doubts about the proposed list arose because it included proposed beneficiaries from outside the tsunami-hit districts. The C.J. Development contact told us he believes the root cause is an ongoing cold war between the Revenues and Fisheries departments. The Revenue Minister is from the Communist Party of India (CPI) (a junior partner in the LDF); the Fisheries Minister is from the LDF's dominant Communist Party of India (Marxist) (CPI(M)). The contact added that the CPI(M) Fisheries Minister has taken control of the process. Our Kerala media and business contacts have repeatedly mentioned that infighting between the CPI and CPI(M) has resulted in additional inefficiency in a historically sclerotic bureaucracy. CPI: THANKS FOR THE BOATS BUT NO THANKS TO USG ATTENDANCE -------------- ¶5. (SBU) The government committee, which still had not decided on beneficiaries, was nonetheless planning a formal event -- to be hosted by the government of Kerala -- to commemorate the boat donation. In light of the fact that Brunswick is an American company, C.J. Foundation had previously proposed inviting a senior official from the U.S. Embassy to participate. Seeking more details about the proposed event to help us identify the appropriate Mission officer to attend the event, we contacted Kerala government officials. Thereafter, government contacts informed us that at the January 16 committee meeting the CPI Revenue Minister decided against extending an invitation to an American official, saying that "due to political reasons it should be avoided." ¶6. (SBU) COMMENT: Sadly, this episode is all too illustrative of the challenges to getting anything done in Kerala, especially under the current CPI(M)-led government. Faced with a generous donation from private industry and with fishermen in need of boats, bureaucratic indecision has left the donated boats sitting idle for more than a year. The Kerala left's reflexive anti-Americanism also seems to be at work: the boat donation event was going full-steam ahead until we inquired about the invitation for a USG official. In this regard, Kerala stands in contrast to neighboring Tamil Nadu, where participation in tsunami relief events by Mission staff has been warmly received. With a government unable to even accomplish the simple task of giving free boats away, it is no surprise that Kerala lags behind its neighbors in South India in attracting business and investment. END COMMENT. ¶7. (U) This message was coordinated with USAID New Delhi. HOPPER