Never mind the critics

I doubt if many people today remember the controversy that broke when the Tatas proposed to build the Taj Bengal hotel in Calcutta. It was the first major investment in a big hotel in the city in many years. It would be an environmental disaster, the campaigners cried, because the hotel would block the passage of the Siberian cranes that flock to the Alipore zoo in winter. You might laugh it away today, but in those days it was sought to be projected as a serious matter, thanks to the business strategies of the hotel lobby in the old economy that feared competition.

The memories of similar controversies over the Haldia petrochemical project would, however, be fresh in many people?s minds. It would never happen, said the cynics, who doubted the credentials of Purnendu Chatterjee?s businesses and the Bengal government?s ability to pull it through. Unlike in the case of Taj Bengal, the scepticism over Haldia was shared by people who genuinely wanted new industries to be set up in Bengal.

The two examples come to mind as one looks at the controversies sparked by the investment proposals by Indonesia?s Salim Group of Industries. The objections range from the purely populist to the absurd. The overwhelming argument, of course, is the one shared by the principal opposition party, the Trinamool Congress, and the Communist Party of India (Marxist)?s allies in the Left Front government ? it relates to the question of using agricultural land for setting up industries.

Before coming to the land question, let me quickly go over the arguments that are too banal to need elaborate comments.

The most banal of the arguments is the one which opposes investments by the Salim group because it had close links with the former Indonesian dictator, Suharto, whose government killed hundreds of thousands of Indonesian communists. By this logic, Bengal must not do any business with the Americans who not only propped up Suharto but were also responsible for anti-communist wars and coups in many other countries. If you extend the logic to include American allies, there would be few countries with which Bengal can hope to do business.

This incredible argument has been offered by some of the CPI(M)?s allies. Even some leaders of the Trinamool Congress have used it with the hope of winning these leftists over in their battle against the Marxists. The argument shows how ideological claptrap can be pushed to absurd levels.

By contrast, the questions about the financial stability of the Salim group are valid ones. But, these questions are clearly uninformed. Big companies do go bankrupt, as the case of Enron proved once again. The Salim group too had its ups and downs, like many other Indonesian companies. Questions about legality and fairness have been raised over many of its business deals.

?The Salim group will not go bankrupt,? said Christiano Wibisono, head of the Indonesian Business Data Centre, in 2000, ?but will shrink if the government insists on investigating all its business deals.? Would not that be true of many business groups anywhere, including some in India? But then, in the same year, the International Monetary Fund said, ?The Salim Group is too important to dismember.? And, two years after the southeast Asian currency crisis in 1997, the Forbes magazine wrote, ?The Salim Group is among the richest in the world.?

It would be simply na?ve to think that the governments and companies in China, Vietnam, Philippines or some in west Asia, with which the Salim group has diverse businesses, would have joined hands with it unless they were confident of its business credentials. And, Salim?s recent investments and acquisitions in China include the 45 per cent stake of COSCO Property group, one of the biggest business conglomerates in Shanghai, where the Indonesian firm is engaged in real estate, hotel, dairy and other businesses.

The leftist doubters of Bengal should be happy to know that all Chinese directors on the COSCO board are leaders or members of the Chinese Communist Party. If they are still unconvinced about Salim?s business worth, they probably have other problems.

Now to the land question. From the Durgapur Steel Plant in the Fifties to the Haldia petrochemical and the Mitsubishi projects and the power plant at Bakreswar, industrial units have come up on agricultural land. Even the new townships at Rajarhat and west Howrah are coming up on such land. The same is true of the sponge iron and mini-steel plants which were recently set up near Durgapur or Bankura . Anywhere in the world, economic development has meant transformation of rural economies into industrial and urban ones. So, what is this noise about the Salim group?s investment proposals?

True, agriculture remains the principal livelihood for the majority of Bengal?s ? and India?s ? people. It is crucial to ensure the food security that Bengal has achieved, thanks to land reforms and other changes in the agrarian economy. It would be suicidal to throw that advantage away. But who can deny the importance of industrialization, especially because even an improved agricultural production can no longer sustain the economic needs of a growing rural population? How can anyone deny farmers an opportunity to graduate to an industrialized, urban living?

Let the Salim group go to places like Bankura and Purulia, where the land is not so fertile, say the sceptics. And, they add, let Buddhadeb Bhattacharjee try for investments in labour-intensive industries. Anywhere in the world, special economic zones are preferred in areas close to sea or river ports. No doubt Purulia or Bankura needs as much industrialization as any other district in Bengal. And, no one denies the need for labour-intensive projects, particularly in a state where unemployment is a serious economic and social problem. But all that cannot be any justification for not having the kind of projects that the Salim group has proposed to set up.

Instead of trying to rake up bogus controversies, the critics would do well to raise genuine issues relating to both agriculture and industry in Bengal. The biggest problem that farmers in the state face today is the complete absence of a marketing infrastructure, which forces them to sell their produce at abysmally low prices. This factor alone has made farming an unviable occupation for an increasing number of farmers, particularly the small and marginal ones.

They have neither the support of a government-backed marketing infrastructure ? (rural cooperatives have been a complete failure in Bengal) ? nor an access to the free market. More affluent farmers can still manage to make money, but small peasants are forced to survive, as in the olden days, at the mercy of middlemen and other exploiters. The result is a new pauperization of the peasantry, which makes it survive on doles from the panchayats.

The industrial scene too presents a rather dismal picture of the workers? helplessness in the face of reckless exploitations. In the new industries that are coming up, wages are low and sometimes paid irregularly. Even in old industries, workers are being forced to accept wage agreements that would have raised a din a decade ago. The most recent example was the agreement that ended the strike in the tea industry in Bengal. In some industries recently set up in Bankura, all laws relating to the protection of the environment are being flouted, resulting in the pollution of drinking water and other serious health hazards.

The government and the CPI(M) work overtime to stifle public protests over these issues in their anxiety to attract investments and to send out the message of political and social stability to potential investors.

These are issues that merit closer public scrutiny and political debates. What we have instead is mindless opposition to reforms. The Salim group?s investment proposals signal a new faith in Bengal. Those who oppose them are clearly out of sync with the changing times.