The Hindu Business Line : A matter of credibility

ON THURSDAY, the US Ambassador, Mr David Mulford, told an audience in Kolkata that "Buddhadeb Bhattacharjee should serve as a role model for other Left leaders on how to attract investments."

In particular, he felt that the Central leadership of the Left, based in New Delhi, was not doing the right thing by not following (as reported) "the trait of the Bengal Chief Minister in encouraging a greater flow of private capital".

Among other things, Mr Mulford said that this policy was deterring prospective US investors from putting their money into India.

To quote him: "The dichotomy between policies pursued here (Kolkata) and what is being said in Delhi has often created confusion in the minds of investors."

Specifically, he said that while the Left had welcomed FDI "with open arms" and had not hesitated to close down loss-making public sector units in Bengal, the same policies had been opposed at the Centre.

Surely, American (and other investors) cannot be faulted if they become extra-careful with their money in such a situation, fundamentally because of its stamp of inconsistency and seeming arbitrariness.

But is there anything inconsistent and arbitrary in the Left's pursuing two different lines at the Centre and in West Bengal?

Mr Mulford said he had discussed the issue with Mr Bhattacharjee "and he gave me a long answer as to how it had to do with political and ideological compulsions".

Certainly, given the sort of ideology the Left follows ("one step backward, two steps forward", and all that), the entire scenario cannot but be consistent for it.

As some observers would prefer to suggest, first, use populism (in this case, the psychology of the oppressed and downtrodden) to get control of the levers of power; second, after having accomplished the objective, fall into line with the conventional wisdom, so to speak, on issues of production efficiency, facilitation of investment, etc., in an effort to keep up with the Joneses.

Worker welfare is, of course, the common thread running through both the stages, but in the second distribution is accorded a secondary position, relatively speaking, compared with efforts to increase the size of the pie, which gets a pre-eminent place in the second stage.

One wonders how the US envoy responded to the Chief Minister's explanation, but to laymen (hailing from both the poor and affluent sections) he could not have been far from the truth when he said that while "reforms must be politically viable to survive", there are a number of "mutually beneficial strategic reforms" which must be gone through in the interests of, on the one hand, an economy seeking investments and growth and, on the other, investors, both domestic and external, willing to supply the resources.

Mr Mulford needs to be specially applauded for drawing attention to one point, namely, the role of the Government in the business of fostering economic growth.

To quote him once again, he said: "Governments are not the creators of wealth, the makers of markets, the wellspring of human energy and ingenuity.

These are the productive forces of individuals, which governments must make special efforts to promote."

The Left may or may not agree with this point of view, but, and understandably so, to it everything depends on who runs the government. If it is not being run by the Left (as is the case with the Centre), government policy and action is, by definition, suspect, to begin with.

If it is, as in West Bengal, then things are more acceptable because the Party is running the Government "on behalf of the people".

Summing up, what the US Ambassador said makes eminent sense. Indeed, he should be specially thanked for complimenting Mr Buddhadeb Bhattacharjee, who is trying his best to bring about a sea-change in the economic profile of West Bengal.

The only troublesome point, however, is that Mr Mulford's credibility would have been much higher if he had represented a country other than the one which recently waged a full-scale war on a sovereign nation for a specific reason which, it now transpires, did not exist!

Ranabir Ray Choudhury

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