Communists Lead Kolkata’s Capitalist Makeover

Boomtown fever is gripping this city, where Mother Teresa once ministered to the poor and sick. Dazzling skyscrapers, tacky billboards and huge tracts of land set aside for malls and condos have turned Kolkata into a showcase of free enterprise and private investment.

Who’s behind this paean to capitalism?

Why, communists, of course.

The Communist Party of India (Marxist) has ruled the state of West Bengal for 29 years, making it the world’s longest-serving democratically elected communist government. That record was extended Thursday by voters who returned the party-led Left Front by a landslide for a seventh straight term.

Gone is the old dogma about dictatorship of the proletariat and revolution of the masses. Leading today’s communist charge is a man who acknowledges his policies are capitalist, who warns workers unions that they had better “behave,” who unabashedly courts multinational corporations and who has become the darling of the upper classes.

Realism and pragmatism are the new watchwords as the state tries to cash in on India’s market-oriented changes of the last 15 years. What is happening in West Bengal is emblematic of the economic liberalization sweeping the country and fueling its impressive growth, a shift in the rules of the game that has forced even onetime enemies of capitalism to change their stripes here in the home of the Bengal tiger.

Today’s communist leaders eagerly sell West Bengal as business-friendly and cutting-edge, a place of improved infrastructure, tax incentives and a skilled workforce for high-tech and other service sectors, such as banking and insurance.

The re-branding appears to be paying off. The state’s average economic growth rate has consistently outpaced the national rate over the last decade. Foreign companies such as IBM and PepsiCo have set up shop or are expanding operations. The real estate market is booming.

Residents in Kolkata, formerly known as Calcutta, describe a revived sense of confidence and can-do spirit in a metropolis that Rajiv Gandhi as prime minister had disparaged as a “dying city.”

“Kolkata has been known as the city of power shortages, bandhs [strikes], traffic jams and Mother Teresa,” said G.D. Gautama of West Bengal’s department of information technology. “All those things have changed, and changed dramatically.”

In place of dreary shops are upscale boutiques and cinemas that vie for the rupees of the growing ranks of people once dismissed as petite bourgeoisie. Traffic can still exasperate, but a new highway connects the airport to downtown and a gleaming new bridge spans the Hooghly River, not far from where the British established their foothold in India and turned Calcutta into the capital of the Raj.

But the problems besetting the rest of the country are in evidence as well: uneven growth that has kept large swaths of people from sharing in the rising prosperity, the demise of traditional industries, policies that critics say benefit the rich at the expense of the poor.

Only a short drive separates Kolkata’s buzzing neon-lighted city center from the grim hand-to-mouth world of struggling farmhands and unemployed factory workers, the bedrock constituencies of the communists.

“You are opening shopping malls, all right. There are middle class, their numbers have increased, they should have shopping malls, no doubt about it,” said Saifuddin Choudhury, a veteran political leader and former Communist Party member. By contrast, he added, “the agricultural laborer has no money. If he goes to the mall, in his dilapidated jalopy and clothes, will they let him in?”

Pretty much everyone here lays the credit, or blame, for the changes in West Bengal at the door of bespectacled, literary-minded, 62-year-old Buddhadeb Bhattacharjee, the state’s chief minister since late 2000.

When he took over the top job, Kolkata was still suffering from the disastrous effects of previous governments, under which labor unrest throbbed, bureaucracy ruled, industries fled and power cuts often lasted several hours a day. The malaise threatened to tarnish the legacy of the widely admired land policy changes that cemented the communists’ hold on power and that granted plots to millions of peasant farmers and protected the rights of destitute sharecroppers.

Following the example of China and Vietnam, Bhattacharjee has discarded certain communist articles of faith.

Privatization of state enterprises? You bet. Curbing union militancy and strikes? Sure. Foreign direct investment? Bring it on.

“We are not doing socialism here. What we are doing is capitalism,” Bhattacharjee acknowledged to reporters last month. “It is clear that we will not be able to establish socialism. Let us see how much we can do for workers from within this [system].”

His fans, sometimes referred to as “Buddha-ists,” gush with praise for the chief minister’s ardent wooing of investors.

“He goes out to welcome them and make sure that the job is done,” said Ravi Poddar, head of Ravi Auto and former chairman of the Eastern Region of the Confederation of Indian Industry.

Much of Bhattacharjee’s efforts have gone into trying to turn West Bengal into an IT hub to rival the cities of Bangalore and Hyderabad in the south. The state’s share of India’s IT exports is only 5%, but it is working hard to increase that.

Currently, the state is home to 235 IT companies, including such industry leaders as Wipro and Tata Consultancy Services. Thirteen IT parks, offering 13.3 million square feet of space, are due to be built within the next 2 1/2 years. Red tape has been cut so that opening a new IT business can be done in a matter of days, said Gautama of the state information technology department.

Kolkata’s boosters tout the talent and loyalty of the local workforce, the lower costs of doing business and the much-improved electricity and water supply, the payoff of years of heavy investment in infrastructure.

But beneath the city’s new glossy high-tech sheen are ailing traditional industries such as textiles, iron and steel, and tea. West Bengal’s once-famous jute mills are being shuttered. Unemployed factory workers, in a state that still suffers from high rates of poverty, feel increasingly ignored by a government and party that once championed their interests.

“We are not against the IT sector, but it offers very few jobs. Labor is capital in a poor country, but instead of looking at the industrial problem from labor’s viewpoint, the [Left Front] government has opted for the neoliberal path which puts profit over people,” a trade unionist complained recently to the Indian Express newspaper.

As a sign of what they consider the government’s misplaced priorities, critics point to New Town, a massive development on the edge of the city that will include office space, shopping malls and fancy high-rise apartments. Critics agree that Kolkata needs room to grow, but they accuse the government of giving paltry compensation to the farmers being displaced by the development.

Many of those agricultural laborers are now scrounging for work.

“What Buddhadeb is doing, he’s only creating a dream for the elite middle class,” said Choudhury, who was expelled from the Communist Party in 2001 and went on to found the Party for Democratic Socialism.

The Communists, who run a disciplined party machine, have so far managed to stifle most internal dissent in their long march toward capitalism. However, like their counterparts in China, they have had to perform some head-spinning rhetorical and ideological acrobatics in order to justify their free-market policies to the rank and file.

Kali Ghose, an official with the Center of Indian Trade Unions and a state party committee member, contends that the current policies are designed “to weaken” and eventually to overthrow capitalism, not promote it. Workers are being taught to stand up for their rights, he said, and to be vigilant against unchecked privatization and exploitation by the central government in New Delhi.

But in the same breath, Ghose talks about the competitive global environment, the need to create wealth to eradicate poverty and the importance of profit in attracting industry. “We are not trying to build a communist society,” he said, in what would seem a negation of the party’s founding principles.

On the other end are critics who say that West Bengal has not yet gone far enough with its economic changes, that more liberalization -- for example, in the retail sector -- is necessary to keep the boom on track and to seal the government’s newfound reputation as friendly to business.

Thursday’s election success will no doubt strengthen Bhattacharjee’s commitment to the course he has charted for his native state. Voters gave the Left Front government a crushing majority with 235 of 293 contested seats in the state assembly.

“We are Marxist, therefore, we are pragmatic,” Bhattacharjee said after a recent campaign rally. “And since we are practical, we know it’s wise to be capitalist at the moment, when the whole world is wooing capitalism.”