VZCZCXRO5710
PP RUEHAST RUEHBI RUEHLH RUEHPW
DE RUEHCI #0021/01 0180738
ZNR UUUUU ZZH
P R 180738Z JAN 08
FM AMCONSUL KOLKATA
TO RUEHC/SECSTATE WASHDC PRIORITY 1831
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEAIIA/CIA WASHINGTON DC
RHEFDIA/DIA WASHINGTON DC
RHMFIUU/CDR USPACOM HONOLULU HI
RUEHRC/DEPT OF AGRICULTURE USD FAS WASHINGTON DC
RHEHAAA/NSC WASHINGTON DC
RUEHBJ/AMEMBASSY BEIJING 0139
RUEHMO/AMEMBASSY MOSCOW 0010
RUEHCI/AMCONSUL KOLKATA 2242

UNCLAS SECTION 01 OF 03 KOLKATA 000021 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON EINV EIND EAGR IN
SUBJECT: CPM SAYS THERE IS NO ALTERNATIVE TO CAPITALISM 
 
REF: 2007 KOLKATA 68, 2007 KOLKATA 372 
 
KOLKATA 00000021  001.2 OF 003 
 
 
¶1.  (SBU) Summary:  In a series of recent statements, senior 
Communist Party of India-Marxist (CPM) leaders appeared to 
endorse, or grudgingly accept, capitalism as a means for 
economic development and industrialization.  Although they 
qualified their views as "the only way forward" given the 
"neo-liberal policies" of the GOI, their seeming acceptance of 
the capitalist model is a shift that puts the CPM somewhat at 
odds with its far-Left allies.  Also notable was the general 
absence of concurrent anti-US rhetoric, which usually 
accompanies or follows statements that stray from the typical 
Marxist line.  With almost every political party in India 
calling for greater economic development in some form or 
another, the CPM now has the task of convincing its loyalists 
and friends that the party still stands for something unique. 
This was easy to do at the state-level.  Its recent aspirations 
to a more prominent role in national (and international) 
politics may tilt it a bit more toward the mainstream.  The fact 
that party leaders are debating their decades-long dogma with 
one another and with their allies is encouraging.  The CPM can 
focus now, particularly in West Bengal, on development and 
getting back on track after the disaster of Nandigram. 
Simultaneously, they will be looking to forge alliances with 
other regional parties and players to form a bloc capable of 
challenging Congress and the BJP as a third alternative at the 
Center.  End Summary. 
 
------------- 
Capital Gains 
------------- 
 
¶2.  (U) On January 3 during a CPM program celebrating the 41st 
anniversary of the CPM's newspaper, West Bengal Chief Minister 
Buddhadeb Bhattacharjee told the audience that capitalism was 
the only way to industrialize West Bengal, although socialism 
could have been a better alternative.  He explained that, 
"reality has forced us to accept capitalism as the only way to 
get funds for industries." Bhattacharjee bluntly noted that it 
was "simply impossible" for the state to mobilize funds for 
industries and it had to depend on capitalism if the economy was 
to make progress. 
 
¶3.  (U) Admitting that his government had no model before it to 
emulate and that it had to pave its own way forward, 
Bhattacharjee asked his supporters to understand the CPM's 
position in the state in relation to the "bourgeois setup" at 
the Center.  He also reiterated his theme of greater industrial 
development while consolidating the successes achieved in the 
agricultural sector and focusing on the improvement of 
economically weaker sectors of society.  The Chief Minister 
acknowledged the need for determining alternative rehabilitation 
packages for people whose lands are being acquired for new 
industry and infrastructure. 
 
¶4.  (U) A day later, CPM veteran Jyoti Basu endorsed 
Bhattacharjee's stance, saying that socialism was not achievable 
while working within the capitalist system and that private 
capital had to be used while social welfare programs by the 
state government would continue.  Basu elaborated that socialism 
was the CPM's political agenda -- it is mentioned in the party 
document -- but that capitalism would continue to be the 
"compulsion for the future." 
 
--------------------- 
Pro-People Capitalism 
--------------------- 
 
¶5.  (U) On the eve of the West Bengal CPM's January 13-17 state 
conference in Kolkata, Left Front Chairman and CPM State 
Secretary Biman Bose told Poloff that the media has consistently 
 
SIPDIS 
campaigned against the CPM stance on industrialization in West 
Bengal.  Bose also blamed the media for fueling a "capitalism 
vs. socialism" debate unnecessarily.  He said the CPM does not 
head a sovereign government and cannot formulate policies 
opposing those of the GOI, implying that the CPM had no choice 
but to operate with a capitalist model in India.  Bose 
recognized the "fact" of economic liberalization that began in 
1991 and claimed the CPM had been successful in creating a 
"neo-rich" population in parts of rural W. Bengal because of the 
party's agricultural policies.  This group's purchasing power 
had now increased, he noted, and like Bhattacharjee, he saw 
development of agro-based industry as the logical next step 
forward. 
 
 
KOLKATA 00000021  002.2 OF 003 
 
 
------------------------------------- 
Karat and Stick in National Politics 
------------------------------------- 
 
¶6.  (U) On January 7, CPM General Secretary Prakash Karat 
reaffirmed working within the "capitalist system" to undertake 
industrialization, supporting Bhattacharjee and Basu's comments 
but not going as far.  Karat indicated that in situations where 
the Central Government imposes "neo-liberal policies," Left 
State governments have to pursue industrialization and economic 
development in a manner that protects the interests of the 
workers and the poorer sections. 
 
¶7.  (U) When challenged by his Left Front partners, Karat 
responded by asking them why they chose to work within the 
capitalist system all these years.  Karat said that in a 
situation where the Center imposes neo-liberal policies, the 
Left governments have to undertake industrialization and 
economic development in a manner that protects the interests of 
the workers and the poorer sections.  Karat dismissed talk of a 
retreat from socialism, saying that only those ignorant of the 
CPM's program could talk of the party saying "goodbye" to 
socialism and "welcome" to capitalism. 
 
¶8.  (U) Importantly, Karat called for unity among the Left 
parties and for a "third alternative" at the Center sans the 
Congress and the BJP.  Such a stance continues the CPM's push to 
distance itself from the Congress Party ahead of the elections 
and yet maintain its national relevance.  The theoretical 
justification the CPM offers for this opportunism is that it 
wants to set up a "people's democracy" as a step towards the 
eventual goal of a socialist India.  Since that this can't be 
done by the three Left state governments alone, a third 
alternative that is a national political force would be the 
means for achieving this "people's democracy." 
 
---------------- 
Rally for Unity 
---------------- 
 
¶9.  (U) At the January 13 CPM rally in Kolkata, U.S. bashing was 
conspicuous by its absence, although at the end of the 
conference, the CPM adopted a statement that criticized the UPA 
government for becoming a "junior partner" of the U.S. by 
entering into a strategic alliance and cooperating in Indo-US 
joint military exercises.  Senior CPM leaders addressed a large 
gathering of grass-roots CPM workers in downtown Kolkata, many 
of whom arrived in (and on top of) buses from rural West Bengal. 
 Karat made his "third alternative" pitch and emphasized that 
the CPM would continue to oppose foreign investment in the 
banking, insurance, agriculture and retail sectors.  Chief 
Minister Bhattacharjee said that West Bengal could not develop 
on agriculture alone and that farmers would be recompensated and 
rehabilitated if their land was acquired for industry.  Jyoti 
Basu admitted that it was not possible to achieve socialism 
being in power in only three states, and that the party's 
ultimate goal was to sit in New Delhi. All harped on Left Front 
unity instead of attacking "imperialist forces" - a usual 
practice at such gatherings. 
 
¶10.  (U) Reflecting the striking shift toward acceptance of 
capitalist approaches to economic growth, the CPM invited 
Deloitte Touche Toumatsu India's Managing Director Roopen Roy to 
speak at a January 14 discussion on industrialization.  The 
following day, Roy told ConGen that he lectured the senior state 
CPM leadership and thousands of supporters about the need for 
greater economic reforms and that he encouraged policies for 
fostering private sector investment.  Roy also highlighted the 
benefits of civil nuclear power for West Bengal and India. 
 
-------------------- 
David versus Goliath 
-------------------- 
 
¶11.  (U) The CPM's partners in the Left Front, however, have not 
been swayed by the rhetoric.  During recent Left Front meetings, 
they maintained that they would not toe the line of unabashed 
capitalism advocated by Bhattacharjee.  Bhattacharjee's 
industrial roadmap for West Bengal has come under fire from the 
CPM's allies in the ruling Left Front - particularly the Forward 
Bloc and the Revolutionary Socialist Party (RSP).  RSP Central 
Committee member Manoj Bhattacharjee said that the CPM was 
mimicking the language of PM Singh and adopting a political 
position that betrayed the ideals of the Left Front.  RSP leader 
 
KOLKATA 00000021  003.2 OF 003 
 
 
and state Minister Kshiti Goswami said it was becoming difficult 
for the Left Front to stay together as the ideological 
differences were becoming fundamental ones.  Goswami said it was 
time to think of an alternative Left Front. 
 
¶12.  (SBU) Comment:  Though the communist symbolism remains 
strong -- announcements for the state conference in Kolkata 
showed the traditional hammer and sickle joined by an industrial 
wheel -- the CPM appears to be finally coming to grips with the 
realization, albeit reluctantly, that its policies and 
prescriptions of state-control and central planning may after 
all be outdated and irrelevant for contemporary India.  The fact 
that party leaders are debating their decades-long dogma with 
one another and with their allies is encouraging.  At some point 
it will fully sink in to the CPM leaders and their cadre that 
the Soviet and the Chinese communists have moved on, leaving the 
Indian communists rooted in their 1917 view of the world. 
 
¶13.  (SBU) Comment Continued:  On the more practical side, with 
BJP's thumping wins over the Congress Party in the Gujarat and 
Himachal Pradesh elections, the CPM does not foresee snap 
Parliamentary elections in the near future.  It can focus now, 
particularly in West Bengal, on development and getting West 
Bengal back on track after the disaster of Nandigram. To 
accomplish this, they will have to deliver on promised economic 
development for their constituents, get their Left Front 
partners in line behind them on ideology, and find a message 
that differentiates them from the old guard leftists in the 
Congress Party.  This is no easy task, and the question is 
whether there remains sufficient popular support for Marxists 
who begin to sound more and more like Social Democrats rather 
than revolutionaries for the proletariat. 
 
¶14.  (SBU) Comment Continued:  Another challenge for the CPM is 
at the national level: how it will continue to be the player it 
has been in New Delhi since the UPA government came to power. 
After finding that the Left Front has the muscle to put up 
roadblocks to the U.S.-India nuclear deal, CPM leaders like 
Karat will be looking to forge alliances with other regional 
parties and players to form a bloc capable of challenging 
Congress and the BJP as a third alternative at the Center.  This 
is a tall order, however, because many of the other parties the 
CPM is flirting with for the third alternative are mostly 
one-state regional players.  For most of them, opportunism 
always trumps ideology and they would align themselves with 
whichever party - the Congress, the BJP or the Left - gives them 
the best deal. 
 
¶15.  (U) This cable was coordinated with Embassy Delhi. 
JARDINE