BUSINESS PLAN - Bengal needs a sustained campaign to convince foreign investors Diplomacy K.P. Nayar

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BUSINESS PLAN - Bengal needs a sustained campaign to convince foreign investors

Diplomacy K.P. Nayar

Talk of the town Nine weeks after Hillary Clinton's otherwise successful visit to Calcutta ended in an unseemly controversy over whether she "discussed" foreign direct investment in multi-brand retail with Mamata Banerjee, the truth about their meeting has finally come to light. It turns out that both sides —those who spoke for the secretary of state of the United States of America and an authorized spokesman for the Bengal chief minister on this matter — are right in what they said about the May 7 talks at Writers' Buildings, although that may be like equating black with white, at least on the face of it. It is an example of the marvel of refined diplomatic jargon even in this age of instant messaging and mobile short-texting that interlocutors at high-level meetings can say one thing and mean something entirely different and yet not be accused of having violated a holy cow. Clinton, it can now be conclusively said, did not raise the issue of FDI in multi-brand retail with Mamata. But she talked to the chief minister about "spoilage" as a result of which farmers in Bengal and elsewhere in India were not getting a fair share of returns for their toil, and she drew vistas of how it could change for the better. Spoilage was one term that kept recurring in the American visitor's conversation that May morning. It was apparent to Mamata what Clinton was driving at. The argument that Wal-Mart and other foreign retail conglomerates have been making to those opposed to liberalized Indian investment rules has been that more than a third of India's fruits and vegetables production rots before it gets to markets. On the other hand, retail giants, goes this argument, would set up climate-controlled warehouses, help suppliers buy refrigerated trucks and establish state-of-the-market relationships with farmers to reduce spoilage if they were allowed to do multi-brand retailing in India. So the chief minister, who continues to be uncompromisingly opposed to the entry of foreign retailers as decided by Manmohan Singh last November, did not respond. She kept silent as Clinton waxed eloquent on the bane of spoilage in the lives of India's hapless farmers. No discussion. Therefore, when a designated minister in Mamata's cabinet, Amit Mitra, contended on the night of May 7 that the secretary of state and the chief minister did not "discuss" the issue of allowing multi-brand retail in India, he was clinically right. It is a tribute to Clinton's diplomatic skills that she made out a case for allowing Wal-Mart and others to invest in a robust supply chain and open stores in India without mentioning the undiplomatic word: multi-brand retail. Her skills will be missed if she carries through her resolve not to serve in Barack Obama's next cabinet, assuming that the US president wins the November elections. But it is also true that Clinton never claimed that she discussed multi-brand retail with Mamata. The words that the US consulate-general in Calcutta used in that context were that the two leaders discussed US investment in Bengal, "touching on" a range of opportunities, including those in the retail sector. "Touching on" is not the same as discussing. We owe it to a business segment of a North American conference of Bengalis in Las Vegas about a fortnight ago and associated events to finally know the truth about claims and counter-claims on this subject. There was a lot of spill-over from that Bengali conference across America: Bengal's finance minister, Amit Mitra, travelled from Las Vegas to Washington to hold several meetings, some of which were attended by White House aides to Obama. All of Mitra's meetings were off-the-record and he sought to keep a low profile, avoiding the media and shunning publicity. But interest in the first US visit by a member of the Trinamul Congress-led cabinet, the giant-killers who threw out a three-decade-plus communist government in Bengal, was inevitably steep among those who attended as well as among those who were kept out of these closed-door meetings. As in every capital, flies on the wall tend to talk in Washington too, and these accounts were culled from those who were present when US and Indian government representatives agreed that this was what actually happened at the Mamata- Clinton talks. Despite the fact that Bengal has a history that is the envy of others and a pedigree that includes Swami Vivekananda and Rabindranath Tagore, both of whom are revered in the US, very little is known about contemporary Bengal in America. When Mitra mentioned at some of his meetings that Tata Consultancy Services, IBM and Cognizant Technology Solutions each had 10,000 employees in Calcutta and Wipro had another 15,000, it came as a surprise not only to Americans but even to many Bengali Americans who are being urged by Mamata to seek their roots in their native state. After Mitra left the US at the end of four days of meetings, several Americans who spoke to this columnist had advice for Mamata that makes good business sense but perhaps not eminent political sense. Their advice was to stop blaming the Left for what it did not do for 34 years and start telling the outside world what the new state government can offer them. To make their point, they cited Obama's experience after he came to power in 2009 and went about blaming the ways of his predecessor, George W. Bush, for the economic woes of America during and after the financial meltdown a year earlier. The American people quickly tired of this blame game and this showed in the new president's opinion poll ratings on his handling of the economy. Voters elect leaders to get things done for them. It is their right to whine. That is not a luxury given to those who are elected to high office. It is somewhat jarring that more Americans have heard from their assistant secretary of state for South Asia, Robert Blake, about the potential for potato cultivation in Bengal than from any state government investment promotion official. A typical Blake speech to a US audience that is interested in India runs something like this. "When PepsiCo came to Bengal in 2004, it introduced a partnership-farming concept, with an 'assured buyback' programme with local potato farmers along with extensive support with upgrading farm practices. Since then, the company's initial group of 140 farmers has grown to more than 12,000, supplying 35,000 tons of potatoes per year." Even so, Americans were not prepared for the finance minister's assertion that his state now stood first in all of India in potato cultivation. Mitra told them of another first for Bengal: the state is number one in the informal sector. Its people are selling something but not producing anything much, which is what needs to be changed. The finance minister emphasized reforms and administrative changes in the last year that had toned up the government's efficiency and provided transparency, mainly through the use of technology. But Americans are now sceptical of such claims. They once considered N. Chandrababu Naidu as their poster boy for e-governance and how technology can change India, so much so that Bill Clinton chose to go to Hyderabad in 2000 during the first US presidential visit in 22 years. But the drubbing that Naidu received in the Andhra Pradesh assembly elections after he flaunted those changes abroad in the style of Mikhail Gorbachev, the author of the Sovietperestroika, has made the US wary of embracing reformers wholesale. Anticipating reservations, Swadesh Chatterjee, member of the prime minister's Global Advisory Council of Overseas Indians and Padma Bhushan recipient, introduced Mitra to Bengali Americans who compared him to Lucius Quinctius Cincinnatus, the man after whom the city of Cincinnati in Ohio is named. Cincinnatus was a Roman nobleman who lived a very different life until an invasion of Rome in 458 BC required him to lead his people as dictator. He put together an army and won the battle. That may have gone down well among those who knew the finance minister in his earlier role as secretary-general of the Federation of Indian Chambers of Commerce and Industry, but at the conclusion of the first overseas initiative by the Trinamul government the lasting impression was that the proverbial swallow does not make a summer. If Bengal is to become credible to Americans like Gujarat or Tamil Nadu, not only are more such visits required, but a sustained campaign is also called for to convince investors that the state is serious about a change in its culture of doing business.