REGIONAL PARTIES, NOT CONGRESS, EMERGE AS WINNERS IN EASTERN

UNCLAS SECTION 01 OF 02 KOLKATA 000132

SENSITIVE
SIPDIS

DEPT FOR SCA/INSB

E.O. 12958: N/A
TAGS: PGOV PREL ECON IN
SUBJECT: REGIONAL PARTIES, NOT CONGRESS, EMERGE AS WINNERS IN EASTERN
INDIA

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1. (SBU) Voters in Eastern India primarily supported regional
parties that were outside the Congress-led United Progressive
Alliance (UPA) that has returned to power. This trend has
resulted in a divergence between the party and coalition in
power at the national and state levels. Amongst the East's Big
Five (Bihar, Jharkhand, Orissa, West Bengal and Assam),the UPA
controls only one of the state assemblies (Assam) and
temporarily administers Jharkhand under President's Rule. While
the UPA's parliamentary presence in Bihar has significantly
decreased, due to the poor performance of previous allies Lalu
Prasad (Rashtriya Janata Dal - RJD) and Ram Viswas Paswan (Lok
Janata Party - LJP); in West Bengal it has made inroads of
unexpected proportions through a spectacular performance by ally
Mamata Banerjee's All India Trinamool Congress vis-`-vis a
severely weakened Left Front.

Local Issues Not National Ones Dictated Voter Behavior


2. (SBU) Local issues resonated more than national issues with
the voting public in this parliamentary election (state
elections were held simultaneously in Orissa). In Bihar and
Orissa they voted for "stability and secularism" and rewarded
"good governance and development" by returning Nitish Kumar's
Janata Dal - United (JD-U) and Naveen Patnaik's Biju Janata Dal
(BJD). They expressed their desire for "change" at the state
level by voting against the Communist Party of India - Marxist
(CPI-M) led Left Front in West Bengal and the UPA imposed
President's Rule in Jharkhand. In Assam, concerns about
"migration and identity politics" propelled the first Assam
United Democratic Front (AUDF) parliamentarian to power with
Muslim votes that were traditionally with the Congress.

Winners: JD-U in Bihar, BJD in Orissa and Trinamool in West
Bengal


3. (SBU) Nitish Kumar deftly played the affirmative action, good
governance and development cards to re-define traditional caste
politics in Bihar and assert his dominance over a broken Lalu
Prasad and his half-baked "Fourth Front" in the state. Naveen
Patnaik's calculated break with its 11-year ally the Bharatiya
Janata Party (BJP) reputedly over "secularism and the Kandhamal
violence" paid off handsomely when his party improved in the
parliamentary polls and swept the state assembly. Mamata
Banerjee sealed a pre-poll alliance with Congress and campaigned
on her populist message of "no fertile land for
industrialization" and "change in West Bengal" to hand the Left
Front its most humiliating defeat in the state since coming to
power in 1977. Her Trinamool is the second largest constituent
party within the UPA and she, herself, is one step closer to
becoming Chief Minister of West Bengal in the 2011 state
assembly elections.

Ministries and Money - Political Stability and Economic Activity


4. (SBU) Post expects to see greater central financial largesse
flow to West Bengal, due to Trinamool's electoral success and
expected receipt of ministerial births. Correspondingly, Bihar
will lose several important ministries, and accompanying funds,
as ministers from former UPA constituents RJD and LJP either
lost their parliamentary races or find that their parties have
been left out of the new UPA government. Strong mandates and
political stability in Bihar and Orissa, despite their belonging
to the political opposition in parliament, will contribute to
improved economic and investment climates in those states.
These states will also be able to continue on their development
drives, welcoming international assistance and project funding.
On the other hand political uncertainty and instability in West
Bengal and Jharkhand bode poorly for investors in those states
until new state assembly polls are held and stable governments
with strong mandates emerge. The West Bengal Left Front led
state government has already indicated a "go-slow" approach on
further development, land acquisition and industrialization in
the aftermath of the polls. Congress' control of both the
Center and the state in Assam should strengthen its
counterinsurgency drive in this northeastern state, where the
United Liberation Front of Asom (ULFA) and other separatist
groups have conducted a string of domestic terrorist attacks in
the past year.

An Opportunity to Engage with West Bengal


5. (SBU) Trinamool's win, and correspondingly the Left's defeat,
in West Bengal should bring the historically leftward leaning
West Bengal polity closer to a more US-friendly New Delhi and
UPA foreign policy alignment. Splits within the national CPI-M
party over reasons for the disastrous parliamentary poll reveal

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a Southern (Kerala),Eastern (Bengal) and ideological (New Delhi
Politburo) divide. CPI-M members from West Bengal have since
publicly and privately questioned the wisdom of their break from
the previous UPA government over the US-India civil-nuclear
deal. The anti-US imperialism plank did not resonate with
voters in West Bengal and internal "communist" soul searching
may be the first step in the party's transition to that of a
democratic socialist party. Now may be the time and opportunity
for US engagement to explain the sort of "expanded strategic
partnership" that we desire with India and encourage such a
transition. Finally, the BJD's electoral success, and the BJP's
routing in Orissa - a clear vote for secularism over the
Hindutva agenda - will enable the state government to ensure
even greater protection for religious minorities in the state
and reduce the possibility of future violence along the lines of
Kandhamal.
TAYLOR