US embassy cable - 05NEWDELHI5845

C O N F I D E N T I A L SECTION 01 OF 03 NEW DELHI 005845 
 
SIPDIS 
 
E.O. 12958: DECL: 07/27/2015 
TAGS: PGOV, PREL, ECON, EINV, ELAB, IN, Indian Domestic Politics 
SUBJECT: TEA WITH AN INDIAN MARXIST: ARTICULATE, 
OBSTRUCTIONIST, ANACHRONISTIC 
 
Classified By: DCM Robert O. Blake, Jr. for Reasons 1.4 (B, D) 
 
1. (C) SUMMARY:  Charge and D/Polcouns met July 26 with 
Sitaram Yechury, a senior and more moderate member of the 
CPI/M, to understand better the Left's political calculus at 
the start of the Monsoon Session of Parliament, and also to 
make the pitch for better ties with the U.S.   Yechury is the 
thinking man's Marxist, which is to say that even if he's 
wrong, he sounds convincingly cogent and analytical.  The 
Left is feeling resurgent these days, so it was useful to get 
their opinion. 
 
2. (C) The Left clearly recognizes that the deal with the US 
is the wave of the future, but that does not mean they have 
to like it or enthusiastically embrace it, but they will 
stand fast with Congress against BJP assaults on the nuclear 
deal.  The Left, however, will get its own licks in on the 
PM's visit.  They also may focus on the Gurgaon labor unrest 
as a symptom of their ongoing worry that India is being 
"sold" to foreign interests.  In the final analysis, Yechury 
and his ilk know time is not on their side.  Their politics 
are increasingly centered on protecting shrinking parochial 
prerogatives, and they are fighting a rear-guard action 
against history.  END SUMMARY. 
 
3. (C) While we gazed at his portrait of Che Guevara and 
sipped Marxist tea, here's what he said: 
 
RELATIONS WITH THE US: TRUST BUT VERIFY, COMRADE REAGAN SAID 
--------------------------------------------- --------------- 
 
4. (C) Yechury supports better relations with the US but he 
and the broader Left do have reservations.  They seek to 
clarify that the government understands that any actions 
taken under the aegis of the new Defense Agreement must be 
consonant with UN initiatives.  Charge told him they should 
not distrust us nor worry; we have no hidden agenda. 
Besides, said the Charge, the Agreement provides for lots of 
possible UN angles where we could work together to build on 
the U.S. contribution to Delhi's peacekeeping center. 
Yechury said the Left also do not understand why the PM was 
talking down the Iran-Pak pipeline; the Left see it as vital 
to natural interests, and cannot allow US sanctions to govern 
India.  The Charge pushed back and said Iranian support for 
terror and its WMD programe are also major factors that 
affect India's security and that India should not neglect. 
 
5. (C) Yechury said that the Left is still "getting over" its 
past skeletons.  Left-run West Bengal and Kerala have 
excellent ties with U.S. corporations and a practical 
business outlook.  The Left has its interests and ideology, 
but it also now wants a good deal for the country.  The Left 
wants the Congress to make clarifications about ties with the 
U.S. to ensure that India did well.  Yechuri lauded the PM 
for briefing the Left that same evening on his visit, and for 
briefing them before he went to Washington, and added that he 
supports what the PM accomplished, but explained the furor 
over the trip by saying "the left is not a monolith." 
 
6. (C) As for the substance of the deal, Yechuri said the BJP 
views it as an impediment for India to have to split 
civil/mil nuclear facilities, but the Left supports such a 
step and is glad we pushed for it.  The Left does not want a 
large stockpile of weapons; a credible deterrent is an 
unavoidable necessity now.  Moreover, nuclear weapons have 
accomplished little; relations with Pakistan are stalemated 
due to nuclear parity, and, citing Kargil, he opined that 
low-intensity border war cannot now be allowed to expand into 
a conventional war in which India could prevail. 
 
POLITICS: LOTS OF THUNDER DURING THE MONSOON SESSION 
--------------------------------------------- ------- 
 
7. (C) Because the BJP has decided to participate in this 
session, Yechuri predicted their agenda would dominate, given 
their role as primary opposition.  He predicted they will 
focus on the terrorist attack in Ayodhya and illegal 
immigration in the North-East.  These issues have no 
resonance for the Left.  The session has 88 bills before it 
and only 16 days of work, so much will not get passed but the 
government will try to get as much as possible done.  The 
Left has seized on the Gurgaon labor unrest and police 
brutality, and that will also dominate.  The PM's statement 
on July 29 about his US trip will also yield rich debate, and 
the Left will be sure to have its say.  The nuclear aspects 
of the deal will be what the BJP attacks, but the Left will 
stick with the government.  Yechuri commented that it was 
surprising that Vajpayee would shamelessly attack the nuclear 
deal of which he was a principal architect. 
 
8. (C) Yechuri insisted that even though the formal 
coordination mechanism with the PM and the Congress was 
broken, the left does continue to maintain regular dialogue 
with the government, and parliamentary coordination is 
on-going. 
 
WHITHER THE LEFT: IN OR OUT OF THE TENT? 
---------------------------------------- 
 
9. (C) Asked whether the Left expected to resume the formal 
coordination meetings with the UPA that had been suspended by 
the BHEL parastatal disinvestment controvery, Yechury thought 
not, but observed that de-facto coordination meetings occur 
frequently, such as the consultation on Indo-US relations 
later that day.  Acknowledging the irony of Left attacks on 
the Congress, Yechuri said some of his ilk, him included, 
argued that it would be better to be in government, so 
decisions did not sneak up on them and their views would be 
heard in the formulation process.  It would maximize their 
leverage and enhance coordination.  Unfortunately, joining 
the government would ironically reduce the differences 
between Congress and the Left in the key Left strongholds of 
Kerala and West Bengal, both of which face elections in 2006. 
 As a result, electoral necessity (COMMENT: and the need to 
survive as relics of a foregone era) kept them out of the 
coalition. 
 
CONGRESS HERE TO STAY 
--------------------- 
 
10. (C) Congress, Yechuri predicted, would survive its five 
year term.  A "third front" is not possible because the BJP 
and its allies are not about to split, nor are Congress or 
its allied parties.  It would be ideologically different, he 
added, for the Left and BJP to unite.  Laloo Prasad Yadav and 
other goons cannot leave the Congress umbrella  right now 
because they would be vulnerable to any number of indictments 
and prosecutions. 
 
MORE BUTTER, LESS GUNS, AND A SOCIAL SECURITY NET, PLEASE 
--------------------------------------------- ------------ 
 
11. (C) Discussions of Pakistan led Yechuri into a pitch for 
India to spend less on defense than its existing (and low) 
2.4 % of GDP.  Yechuri compared defense spending to health 
(0.9%) and education (1.2%) and said India needed to get its 
priorities right.  Continuing uncertainties in Pakistan, 
however, made such changes difficult.  As for the labor 
unrest in Gurgaon, Yechuri said workers needed a social 
security net, but the state did not provide any.  Without 
such a safety net, the Left would 
resist any effort at labor law reform. 
 
GURGAON RIOT: AN OUNCE OF PREVENTION WOULD HAVE AVOIDED IT 
--------------------------------------------- ------------- 
 
12. (C) It was clear, said Yechuri, that Gurgaon police had 
been provoked, but they also overreacted.  The PM and Sonia 
have distanced themselves from the Haryana government's 
actions, and despatched the Chief Minister (a 
Congress-wallah) to make amends.  The root of the problem, 
however, was the fact that the government allowed the dispute 
to linger for one month without taking steps to make sure it 
did not bubble out of control.  The BJP would now take 
maximum advantage.  Moreover, the Left will be in the odd 
position of trying to temper its defense of the rights of its 
core constituency -- the worker -- because it is supposed to 
support the government. 
 
FDI: A NECESSARY IMPERIALIST EVIL, BUT WAL MART UNACCEPTABLE 
--------------------------------------------- --------------- 
 
13. (C) The Left, said Yechuri, wanted FDI on their own 
terms.  FDI had to expand India's productive capability, 
upgrade indigenous technology, and enhance employment.  If 
the government imposes these caveats, sectoral review is 
unnecessary.  This is why the Left did not attack the PM's 
speech on investment.  As for retail, cautioned Yechuri, it 
generates nine percent of GDP but employs 13 percent of the 
workforce.  Opening the retail sector to FDI was fraught, as 
a result, with risk, so Wal Mart need not apply.  Charge 
pointed out that Wal Mart would be a boon to employment and 
that Indian firms have the confidence to compete well. 
(COMMENT:  The Left and the BJP oppose FDI in retail for 
their own parochial reasons, but most prosperous Indians 
would welcome new options to India's outdated and 
slow-to-change retail system. END COMMENT) 
 
OUR GRAND ENTRANCE 
------------------ 
 
14. (C) Beyond the Che poster, the map of the USSR, and the 
cheap gifts from visiting Chinese delegations, the funniest 
moment was when we arrived.  The CPI/M greeter asked us, 
"You're with the Cuban Embassy?"  Guess they see a lot of 
them. 
BLAKE