By DAVID ROHDE

Published: May 16, 2004
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The New York Times



CALCUTTA - On a recent Friday morning, Buddhadev Bhattacharjee, chief minister of West Bengal State and a senior leader of the Communist Party of India (Marxist), met with an executive from an icon of American capitalism, the I.B.M. Corporation.

"Outsourcing is a must in this era of globalization, and we want to take advantage of this opportunity," Mr. Bhattacharjee told the corporate executive. "We want you to help us."

I.B.M. is one of a half dozen multinational corporations that have set up shop recently in West Bengal, a state governed by Communists for 26 years. They are part of Mr. Bhattacharjee's unorthodox effort to create a "new Calcutta" of software parks, factories and American-style malls whose development will be an example for the rest of India.

"I can humbly claim that our model is the best in the country," he said in an interview, a portrait of Lenin hanging on the wall behind him.

[Unexpected results on Thursday in national elections suggested that this party - one of three Communist parties in India - could play a pivotal role in determining India's future economic policies. In an upset, an alliance led by the Congress Party leader, Sonia Gandhi, defeated Prime Minister Atal Bihari Vajpayee's governing Hindu nationalist coalition.

[The Congress alliance does not have enough seats to form a majority in Parliament and is expected to ask the Communists, who won a record 43 seats, to join its government. The Communists' showing made them the third largest party in Parliament.]

At times, the Marxist party has taken stands that could discourage the foreign investment that has helped give India one of the fastest growing economies in the world. Mr. Bhattacharjee's Communists say that "employment generation" must be a focus of economic policy and that profit-making state enterprises should not be privatized. They also oppose the policies of the World Bank and the International Monetary Fund.

"The philosophy of the World Bank and I.M.F. is they want globalization in favor of the rich countries at the cost of third world countries," Mr. Bhattacharjee said. The United States and Europe should be forced to end their own agricultural subsides and open up their agricultural markets, he added, before poor countries do the same.

He said his recipe for growth avoided the uneven development that plagued other parts of India, where high technology urban centers thrive and rural areas stagnate. Seventy percent of India's one billion people still live in the countryside and rely on agriculture for their livelihood.

In West Bengal, the party has enacted sweeping land reform for farmers, heavily invested in small-scale manufacturing and attracted capitalist titans like Pepsi, Mitsubishi and I.B.M.

Mr. Bhattacharjee has also hired a team of consultants from the American firm McKinsey & Company to help attract foreign investors. He has convinced local Marxist labor unions to end nearly constant strikes that paralyzed the city. He also has encouraged investors to open glistening American-style malls, where young middle-class Indians buy Levi's jeans and Nike sneakers.

The party's political opponents contend that it has sold out its principles, inflated its economic success and used coercion to dominate the state. Critics contend that opponents are ostracized and have even been killed.

"In the village, if you are against the Communists, no barber will cut your hair, a sort of social boycott," said Bobby F. Hakim, secretary for the Trinamool Congress, the state's main opposition party. "They have totally destroyed this democratic system in West Bengal, especially the countryside."

Mr. Bhattacharjee's top aides can be dictatorial, controlling and arrogant, ordering visitors, for example, to stand in certain spots in the hall outside his office. At one Communist rally in the city, party cadres followed a journalist trying to interview voters. Clearly intimidated, residents refused to speak.

Mr. Bhattacharjee attributed those actions to a handful of bad apples or people pretending to be party members. Despite 25 years in power, the party still polices itself well, he said.