This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 04 CALCUTTA 000418 
 
SIPDIS 
 
SENSITIVE 
 
DEPT FOR SA/INS 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM PINR ECON EINV EMIN ASEC SNAR IN BG
SUBJECT: ASSAM'S INSURGENT GROUPS QUIET FOR NOW BUT SOCIAL PROBLEMS 
PERSIST 
 
REF: CALCUTTA 00372 
 
¶1.  (SBU) Summary:  November 5-10, CG made an introductory visit 
to the State of Assam, the gateway to India's Northeast.  Ethnic 
insurgencies, poverty, drugs and economic stagnation have 
plagued Assam in recent history.  However, some positive trends 
have emerged in moderating ethnic tensions and bringing economic 
growth.  The economic development may offer opportunities for 
U.S. businesses that manufacture oil, pipeline and construction 
equipment.  The State's governing Congress Party is preparing 
for elections in May 2006 and will likely see a reduction in 
seats and a possible loss of power.  HIV/AIDS, illegal narcotics 
and tensions with Bangladeshi immigrants are persistent problems 
for the State.  However, with its resources and increased 
interest by the GOI, Assam and the Northeast region could see 
some economic and social improvements.  End Summary. 
 
¶2.  (U) Assam a State the size of Mississippi with a population 
of approximately 27 million people is the gateway to the other 
Northeast States of India, also referred to as the "Seven 
Sisters."  The capital Guwahati's air links and businesses make 
it a regional hub. The State, like the Northeast region as a 
whole, is poor, having a State Per Capita Income of only USD 
251, half of the national average.  The population is ethnically 
diverse with 45 different language groups.  The Brahmaputra 
River valley makes up 60 percent of the land and the State has 
international borders with Bhutan and Bangladesh. 
 
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Heart of Darkness on the Brahmaputra 
--------------------------------------------- -- 
 
¶3.  (SBU) The State's poverty and ethnic diversity has made it 
the battleground for approximately 42 ethnic insurgent groups 
including major organizations such as the United Liberation 
Front of Asom (ULFA), the National Democratic Front of Bodoland 
(NDFB), the Dima Halong Daogah (DHD) and the United Peoples 
Democratic Solidarity (UPDS).  The prevalence of these groups 
has crippled the State's development and created a climate of 
festering violence.  The most recent outbreak was the shocking 
tit-for-tat October killings between the Karbi and Dimasa tribal 
groups in the Karbi Anglong district, which resulted in 78 
deaths, many from brutal hacking and dismemberment (REFTEL). 
Separatist group ULFA, however, has been the greatest concern 
for the State and National Government.  The fighting since 1982 
for a separate socialist homeland, ULFA is believed to have 800 
to 1,000 active members with another approximately 1,200 
supporters providing safe houses, logistics and intelligence 
assistance.  Indian officials have claimed to CG that the group 
has received training and weapons from Pakistan's Inter-Services 
Intelligence (ISI); have links to Nepali Maoists; bases in 
Bangladesh, where many of key figures, including its leader 
Paresh Barua are in hiding; and until 2003, when Bhutanese and 
Indian Armies attacked, had bases in Bhutan. 
 
¶4.   (SBU) During CG's visit ethnic tensions were on a low ebb 
as State officials successfully mediated a truce between feuding 
Karbi and Dimasa tribes; the ULFA has been quiescent as it 
negotiates a potential settlement with the GOI and Bodo are 
beginning to administer their new "Bodoland" district.  In the 
wake of the October Karbi-Dimasa killings, the Government of 
Assam (GOA) moved quickly to bring the various tribal, community 
and academic leaders together to negotiate an end to the 
fighting.  The head of a Ford Foundation funded Peace Study 
Group said that the killing has stopped only temporarily.  The 
underlying problems of poverty, insufficient land and 
opportunity remain and that fighting will likely flare again as 
the 29 ethnic groups in the Karbi Anglong district compete for 
scarce land resources. 
 
¶5.  (SBU) ULFA has also been quiet as negotiations between its 
representative Peace and Consultative Group (PCG) and the GOI 
began on October 26.  Assamese author Indira Goswami leads this 
group of key Assamese intellectuals and community leaders.  No 
ceasefire has been declared and security forces are still 
conducting operations against members of the group in various 
parts of the State, including Dhubri and Mangaldoi districts. 
CG found no consensus on whether the negotiations would lead to 
substantive results.  GOA officials were concerned that ULFA has 
initiated the discussions to provide breathing space to 
reconstitute and arm as it struggles with recent setbacks, such 
as the loss of bases in Bhutan in 2003 and the Indian Army's 
success in killing and capturing many ULFA cadre in its 
August-September attacks at Dibru-Saikhowa. 
 
¶6.   (SBU) The once militant Bodos have begun to administer 
their new Bodoland Territorial Council (BTC), in what Chief 
Minister (CM) Tarun Gogoi told CG he hopes will serve as a 
potential model for other ethnic communities.  The BTC, 
constituted in June 2005, governs an area in the Northwest of 
Assam made up of four districts, having the highest 
concentrations of Bodos.  Bodo leaders have been given 
administrative authority to manage budgets, projects and civil 
servants in the area of development and social services.  GOI 
and GOA officials are still responsible for security and law 
enforcement.  Locally elected Bodo leaders are now in charge of 
social and infrastructure development priorities.  CM Gogoi and 
Home Commissioner Dr. Biren Gohain were very positive with the 
results and the potential to apply this approach of giving 
limited local control to ethnic groups as a way of meeting the 
various groups' demands for autonomy.  However, a GOA civil 
servant told CG that the Bodo leaders are falling into the ways 
of Indian politicians by squandering a USD 100 million-aid 
package on contracts to family and cronies and building nice 
homes for themselves.  He noted that if roads are built, the one 
in front of the home of the newly installed Bodo bureaucrat is 
constructed first.  Local academics also questioned whether 
local autonomy initiatives would work for more scattered 
communities and felt that ultimately the desire of so many 
groups to have a degree of local control would conflict. 
 
¶7.  (SBU) HIV/AIDS and illegal narcotics are two problems that 
will likely worsen given the social dynamics and lack of 
awareness.  According to Assamese official figures, of 50,779 
blood samples screened up to July 2005, 920 cases were HIV 
positive, with 315 AIDS cases.  Since May 2002, the Voluntary 
Confidential Counseling and Treatment Center in Dibrugarh (upper 
 
SIPDIS 
Assam) has tested approximately 500 people with 38 HIV positive 
results.  However, the State's leading HIV/AIDS specialist Dr. 
¶S. I. Ahmed questioned the efficacy of the State's sentinel 
surveillance mechanism and felt HIV/AIDS infection rates were 
underreported.  Especially, considering neighboring states 
Manipur has the highest concentration of HIV/AIDS infection in 
India and Nagaland has an epidemic rate of infections as well. 
He also noted a growing anecdotal trend in illegal narcotics 
abuse, with drugs coming from neighboring Burma.  He showed CG 
photographs of few hundred recently seized methamphetamine pills 
with "WY" imprints.  (Note: The United Wa State Army (UWSA), one 
of the largest drug cartels in the world, operates out of 
Northeast Burma and produces huge quantities of methamphetamine 
with similar imprints.) 
 
----------------------------------- 
Money Offers a Silver Lining 
------------------------------------ 
 
¶8.  (SBU) Assam's difficulties have drawn GOI's attention and 
the State, like the rest of the Northeast, enjoys "special 
category" status for additional funding.  The GOI Central Plan 
allocated Assam USD 695 million for 2005-2006.  Assam receives 
among the highest per capita GOI funding in the country.  The 
Asian Development Bank has also been very generous, giving USD 
100 million in loans in the last two years for power and 
development programs.  CM Gogoi was very upbeat about Assam's 
financial position in his conversation with CG, noting that 
government salaries were now being paid on time - a departure 
from the past. 
 
¶9.  (SBU) In the State capital, Guwahati, the large inflow of 
money is fueling a building boom.  Three large, modern shopping 
malls were already completed, with three more under 
construction.  A surprising number of new car dealerships, 
restaurants, and multi-story offices, hospitals and apartment 
building were also evident.  The Taj Hotel chain reportedly will 
construct a 5 star hotel in the city and Jet Airways announced 
that its Calcutta - Guwahati route, a route it is required to 
fly by the GOI, is finally making money for the airlines.  All 
contacts told CG that the building boom was the result of 
misappropriation of public funds or "money laundering," as 
described by one businessperson.  Even the CM admitted to CG 
that Guwahati's growth was partly attributable to "leakages" of 
money meant for infrastructure development.  This graft has 
meant that public funds are not being used to finance critical 
infrastructure in the poor rural areas of the State to 
facilitate broadening of economic development but are begin used 
in Guwahati, where the benefits are enjoyed by the urban elites. 
 
-------------- 
Tea and Oil 
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¶10.  (U) Assam's two major industries are tea and oil.  Assam 
produces 55 percent of India's 865 million kg output of Tea. 
However, the Tea industry has been in a recession since 1998 
from excess production and loss of markets in Russia and 
Pakistan and the increase of cheap low quality tea from small 
producers.  The State's 845 large gardens constitute 226,000 
hectares and employ 556,000 permanent workers. 
 
¶11.  (U) Assam also has India's largest proven onshore oil 
reserves of 2.9billio barres - 45percent of the country's 
proven reserves and 15 percent of its crude output.   Private 
sector Assam Company Ltd. (ACL) recently struck oil in two new 
sites in Amguri and Assam Arakan with reserves of approximately 
15 million barrels and 50 million barrels respectively.  In 
addition, the Amguri field is estimated to have 45 billion cubic 
feet of natural gas.  ACL plans to invest USD 645 million to 
construct 16 wells to exploit these reserves.  CG met with 
officials of public sector Oil India Limited (OIL), which 
operates India's longest oil pipeline of 1,157 km through the 
State.  The oil sector constitutes a significant sales 
opportunity for U.S. manufacturers.  OIL officials noted that 
they plan to expand the pipeline and to upgrade existing 
equipment, expressing a strong interest in U.S. manufactured 
equipment.  OIL also wants U.S. technology to improve oil 
extraction techniques. 
 
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State Elections in May 2006 
---------------------------------- 
 
¶12.  (SBU) The ruling Congress Party is hoping to use the recent 
economic improvements and the ULFA peace negotiations to win 
again in the May 2006 elections.  However, all contacts believed 
the election would be very close, possibly with no clear 
majority.  Even State Congress Party Spokesman Abdul Khaleque 
admitted Congress would likely lose seats in the next election. 
A GOA election official was more pessimistic, saying he believed 
the Congress Party would lose the election.  However, the 
opposition Asom Gana Parishad (AGP) is also experiencing 
infighting and is competing with the breakaway AGP (Progressive) 
party for the opposition votes.   The Muslim community, which 
constitutes 30 percent of the State population, is also an 
important vote block.  Congress ally Jamiat Ulema-e-Hind party, 
upset with perceived lack of Congress support for the Illegal 
Migrants Determination by Tribunals Act, repealed by the Supreme 
Court in July, have floated forming a United Democratic Front 
with support of 20 minority groups. 
 
¶13.  (SBU) According to Commissioner & Secretary to the Chief 
Minister Dr. Biren Gohain (Protect), illegal immigration of 
Bangladeshis will not be addressed prior to the elections. 
Because of the importance of the Muslim vote for the Congress 
party, no action will be taken to push restrictions on illegal 
immigration for fear of offending the Muslim community.  Six 
million illegal Bangladeshis are estimated to be living in Assam 
and dominate the State's southern five districts along the 272 
km border with Bangladesh. 
 
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Comment 
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¶14.  (U) Assam is the economic and transport hub for India's 
Northeast States.  Like the rest of the region, it experiences 
serious problems of poverty, insurgency, drugs and HIV/AIDS. 
Despite the extensive corruption, some positive changes are 
happening on the economic front.  However, the limited positive 
economic news will likely not be sufficient to give the Congress 
Party a definitive win in the State. 
JARDINE