Bengal Marxist is attracting investors

Just when I was at the edge of despair and ready to throw in the towel for my country’s future, I read about the Marxist Chief Minister of the Indian state of West Bengal, who is leading a determined drive to win tiger economy status for his impoverished state. I have actually noticed (and wondered) for a couple of weeks now, a television spot on BBC enticing direct foreign investors to West Bengal. They got some nerve, I thought, until I read the Financial Times last Thursday.

Ate Glue should get a copy of last Thursday’s issue of the Financial Times and read about Buddhadeb Bhattacharjee. The FT describes him as "the Deng Xiaoping- quoting communist who became West Bengal’s chief minister in 2001 and has turned the eastern Indian state into a laboratory for a high stakes marriage of Marxist theory with market reality." And he emphasizes, unlike China, he is doing it under democratic rules of the game.

Known in his state as "Buddha", this highly pragmatic politician from the Communist Party of India (Marxist) aspires to make investors see Calcutta "as a little piece of China in India, a place where money has no ideology and foreign investment is welcome." This is very significant in India because the pace of national economic reforms is largely determined not in New Delhi but in Calcutta, home of the so-called Left Bloc of the Communist Party (must be pretty extremist).

What Mr. Buddha wants to build is a new Calcutta with its information technology parks and special economic zones. In the process of realizing his dream, he has to be firm with his comrades, the ideological hardliners within the Left Bloc, who claim he sold out to global capital. FT quotes him saying that he wants investment and "money has no color or nationality."

The rebirth of West Bengal started with Mr. Buddha’s predecessor, Jyoti Basu, who declared that the priority is no longer a socialist utopia but to steer the party and the state government towards reform and growth. According to the FT, Mr. Basu restored stability to a state wracked by a Maoist insurgency and made land reform a reality for millions.

That didn’t happen easy. "Belligerent unions, which specialized in lock-outs and in encircling terrified managers, pushed the state into deep and prolonged industrial decline. West Bengal’s share of Indian industrial output fell from around 10 percent in 1989 to less than five percent by the mid-1990s." Mr. Basu made his break from conventional communist strategy as business and capital fled the state. He welcomed foreign investment.

Mr. Buddha accelerated the shift. He declared information technology an essential public service in 2002, to protect it from strikes and to guarantee the continuity of service demanded by call center operators. But last month, a national strike called by the unions and the Communist party disrupted Calcutta’s IT industry. Mr. Buddha was furious when his party comrades obstructed workers going to call centers and hailed the chaos. He told the IT companies to give him the names of those who obstructed their workers so he can arrest them.

Mr. Buddha wanted to deliver the message that the government would do what it takes to assure the flow of investments to Bengal’s IT industry. The FT observed that Mr. Buddha’s "determination to accelerate economic reform has, of course, exposed a substantial difference between what communists say for effect in New Delhi and what they are prepared to do when they come to power."

The FT reports "Calcutta’s IT sector is growing at 70 percent a year – twice the national rate – albeit from a low base." It is capitalizing on its high quality graduates and bottlenecks in Bangalore, India’s best known high tech success story. He wants Bengal to rank among India’s top three IT states by 2010 and of contributing 15-20 percent of the country’s total IT revenues, compared with five percent last year.

That is going to take some doing! The IT secretary of the West Bengal government explained that they "started late in IT and, to our horror, discovered huge misperceptions about Bengal linked to the Naxalite (Maoist) movement, traffic jams, Mother Teresa, the slums and so on." He could have been describing the Philippines!

Anyway, the same IT official claims "almost all big companies are now here and those that are not are thinking about it." A World Bank official told FT "Our overall perception is that Calcutta has recognized the importance of creating an environment suitable for private sector investment." The British High Commissioner (Ambassador) in India comments "a much more powerful message is that major international players are committing to West Bengal because it means business, provides infrastructure and has integrity at the top."

Ah! So that’s the secret… integrity at the top. How could we miss that! India isn’t exactly known as a paragon of virtue and like the Philippines, habitually lands at the bottom of corruption surveys. But Mr. Buddha is different. He lives with his wife and daughter in a one-bedroom apartment, and is conspicuously incorruptible. A property developer told the FT "very rarely do you find corruption in the party. Even his worse enemy would admit that the chief minister has the best interest of the state at heart."

That’s likely to be the one other reason why Indonesia’s Salim Group, the same guys who own PLDT through Hong Kong-based First Pacific that is managed by Manny Pangilinan, is investing big in West Bengal. They are about to sign a deal to convert some 5,100 acres of land near Calcutta into a special economic zone. How come we didn’t get that investment instead? Somehow, everything considered, I don’t think we are as desperate nor are we worse off than Mother Teresa’s home turf. But they are moving; we are not.

What lessons do we see from Mr. Buddha’s transformation of West Bengal? First of all, leadership is key. In fact, West Bengal is worse off than the Philippines in terms of poverty and vociferous politicians. Who can beat the paralyzing effect of ideological communists who happen to be loquacious Indians as well? Anyone who has attended an international conference knows those Indian ideologues are worse than Nene Pimentel and Crispin Beltran combined. Mr. Buddha is managing them, through sheer leadership.

I suspect it is leadership by example too. A lifestyle as simple and as near to that exemplified by Mahatma Gandhi must have done it for Mr. Buddha. Ate Glue, husband Mike and son Mikey live in absolute luxury in comparison. And they flaunt it. That’s one big difference, I guess.

If what FT says is accurate, that people think Mr. Buddha is incorruptible, it is another major difference from the leadership we have today. Is there any Filipino in his right mind, willing to stand up, put his soul’s eternal destiny on the line and swear he honestly believes Ate Glue is incorruptible? That’s our problem!

Transforming West Bengal, Mother Teresa’s miserable Calcutta, into a humming IT hub should be more difficult and a more seemingly impossible task than doing the same thing for the Philippines. It is still work in progress but it seems, from FT’s account, they are well on their way. And we are stuck in traffic. Their experience shows it starts with the leader. Even if he is a Communist, he is more acceptable to investors than Ate Glue, a free market economist who is a known American lackey. Isn’t that strange?

"I am a proud communist," Mr. Buddha told the FT. "I believe in Marx’s world outlook, in the fundamental contradiction between labor and capital and in the class struggle. I know Americans will not write the last chapter of human civilization but I am also a realist. The world is changing. The lesson from the collapse of the Soviet Union and from China is that we reform, perform or perish."

I guess we will perish, unless Ate Glue starts being the leader she is pretending to be… or step aside for someone who can be it.

In uniform

Jack Gesner sent this one in.

A Navy Admiral was being court-martialed for an incident where he was found to be chasing a young lady through the hallways of the hotel in which they were both staying. Neither of them were wearing anything. One of the charges was that of "being out of uniform."

The Admiral’s lawyer argued that the officer was not out of uniform, as the regulations read: "A Naval officer must be at all times appropriately attired for the activity in which he is engaged."

The Admiral was acquitted.

Boo Chanco’s e-mail address is [email protected]