VZCZCXRO3839
RR RUEHAST RUEHBI RUEHDBU RUEHLH RUEHNEH RUEHPW
DE RUEHCI #0189/01 1910650
ZNR UUUUU ZZH
R 100650Z JUL 09
FM AMCONSUL KOLKATA
TO RUEHC/SECSTATE WASHDC 2413
INFO RHEFDIA/DIA WASHINGTON DC
RUEAIIA/CIA WASHDC
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RHEHAAA/NSC WASHINGTON DC
RUEHCI/AMCONSUL KOLKATA 2973

UNCLAS SECTION 01 OF 02 KOLKATA 000189 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR SCA/INSB 
 
E.O. 12958: N/A 
TAGS: PGOV ECON IN
SUBJECT: ORISSA'S BJD PARTY PROMOTES STATE INTERESTS AND 
DISADVANTAGED COMMUNITIES 
 
REF: A. KOLKATA 67 
     ¶B. 08 KOLKATA 330 
 
KOLKATA 00000189  001.2 OF 002 
 
 
¶1. (SBU) Summary: CG travelled to Orissa in June to congratulate 
Chief Minister Naveen Patnaik on Biju Janata Dal's (BJD)'s best 
electoral performance since the party was formed in 1997.  The 
impressive performance of the regional party in the 2009 
parliamentary and state elections validated the party's decision 
to break with its erstwhile National Democratic Alliance ally, 
the Bharatiya Janata Party (BJP).  Without its 11-year old ally, 
the BJD won 14 of 21 parliamentary seats and 103 of the state's 
147 assembly seats.  The BJD capitalized on voters' disaffection 
with the central government and promoted state-centric policies 
and programs supporting economically disadvantaged populations. 
Patnaik also courted women and minority communities and 
projected a clean image as an effective leader.  CG met with a 
range of senior political leaders, government officials, 
journalists, tribal community representatives and international 
NGOs to prepare this report. 
 
Secret of Success: Win Over the Disadvantaged 
 
¶2. (SBU) According to BJD's chief election strategist, Raja 
Sabha MP Pyari Mohan Mahapatra, BJD's populist policies, such as 
heavily subsidized rice, clinched the elections for the BJD. 
Even BJP National Vice President Jual Oram acknowledge and 
privately speculated that the BJD won over 50 percent of voters 
through the food subsidy programs, despite the fact that the 
majority of the subsidy was paid by the central and not state 
government.  Mahapatra explained that Patnaik strategically 
targeted disadvantaged communities, including women, tribals and 
scheduled castes through various development schemes.  For 
example, the state government provided subsidized loans for 
self-help groups supporting approximately 4.8 million women. 
The state provided special training for members of local tribes, 
representing 22 percent of the state's population, to help them 
enter the work force.  He credited BJD's increase in vote-share 
(from 27 to 39 percent) to Patnaik's personal popularity and the 
public's admiration for an unprecedented "translucent," less 
corrupt administration.  According to journalists, Patnaik's 
public outreach master-stroke was sending a recorded message by 
telephone to voters urging them to vote for him, with many 
recipients believing that Patnaik has personally make the call. 
They later received a thank you call after the elections. 
 
State versus National Interests 
 
¶3. (SBU) Mahapatra expressed dismay that while Orissa has the 
second largest mineral resources in the country, it is still one 
of India's poorest states.  He blamed national policies for 
depriving Orissa of a fair share of mineral royalties and 
limiting industrialization in the state.  He complained that by 
subsidizing freight shipments and building central government 
processing facilities in other states, the national government 
shifted the economic benefits Orissa should have earned to other 
more politically influential states.  Mahapatra explained that 
BJD used the public perception that the central government, 
regardless of the party in power, did not support Orissa 
economically, to gain voter support.  State Congress President 
K.P. Singh Deo acknowledged that as a national party Congress is 
hampered by having to adopt a broader perspective in its 
economic planning. 
 
Go Slow on Industrialization 
 
¶4.  (SBU) Both Mahapatra and the young U.S.-educated BJD 
parliamentarian Bijayant Panda emphasized Patnaik's go slow 
approach to industrialization and tough negotiations with 
investors as another reason voters supported BJD.  Panda 
highlighted Patnaik's insistence on coupling mineral rights with 
agreements to build in-state production facilities.  When asked 
about rumors that South Korean steel firm POSCO planned to leave 
Orissa with its proposed USD 12 billion green field steel plant, 
Mahapatra welcomed POSCO's departure claiming that the deal was 
not good for the state.  Local resistance to land acquisition in 
Jagatsinghpur has stymied the project with little progress since 
its announcement in 2005. 
 
BJD-BJP Split Inevitable - Politically Expedient, No Common 
Ideology 
 
¶5. (SBU) Mahapatra told CG in a highly candid interaction that 
his party decided to part ways with the BJP "the day the 
alliance was forged" (Reftel A).  He claimed that the BJP-BJD 
marriage was one of political expediency without a common 
ideological basis and formed simply to allow the BJD to develop 
as a party.  He confirmed that while differences between the two 
 
KOLKATA 00000189  002.2 OF 002 
 
 
partners over the 2007-2008 violence in Kandhamal (Reftel B) 
contributed to the break, BJD was prepared to end the political 
alliance once it had enough votes to defeat Congress in state 
assembly elections on its own.  In talks with BJP state leaders, 
it was clear that BJD's withdraw from the alliance in March 2009 
took them by surprise and they speculated that the timing was 
intentional to allow them little time to prepare for the 
following month's elections. 
 
Comment 
 
¶6. (SBU) Patnaik, like Bihar Chief Minister Nitish Kumar, 
appears to be using the same tools to gain and sustain power - 
focusing on state instead of national issues, courting 
disadvantaged groups and highlighting good governance.  While 
immensely popular and influential in Orissa, the BJD will have 
little influence in Parliament since it is neither allied with 
the government nor the main opposition party.  An overt alliance 
between the BJD and the Congress is difficult since Congress 
leads the state opposition.  Given the BJD's surprise departure 
from the BJP alliance, it is unlikely BJP will forgive and 
forget anytime soon.  With Patnaik's personal contacts among the 
Congress elite, however, there is a good chance BJD will 
indirectly support the United Progressive Alliance in exchange 
for benefits for the state.  BJD's greatest challenge now will 
be to find the funds to sustain its expensive populist measures 
while at the same time wooing the private sector to develop the 
state in a more inclusive manner. 
PAYNE