Tuesday, March 22, 2011

Bengal Elections - The Winner's Curse

Elections are coming up in the state of West Bengal (not sure why we keep calling West Bengal, when there is no East Bengal in India, just Bengal would have made more sense), and as per popular media, it seems Mamata Banerjee's Trinamool Congress (TMC) and Congress combine is likely to win.

Before I start, let me clarify my political inclinations. I typically favour any political formation that can create and sustain economic growth and provide good governance. I do not vote for any party. In that sense, I am what is known as a “floating voter”. I tend to see politics through the eyes of economics and eventually the stock markets.

In Bengal, there are two things that are close to the people's heart – sports and politics. After nearly 34 years, the Left Front comprising of the CPIM, CPI, RSP and Forward Bloc are on the verge of losing the possession of the famed Writers Building – the seat of political power in Bengal. In their place, a coalition of TMC and Congress alongwith some smaller, lesser-known parties like SUCI and PDS have joined forces are touted to win this year's elections.

The tragedy of Bengal is that there is no economically sound-minded political party. Both these formations, the Left Front and the TMC/Congress are unabashedly leftist in economic policy. The reason is very simple to understand. The majority of voters in Bengal are rural poor and pandering to that section is more critical from a vote bank perspective. So, the middle-class are left out completely from public policy making. This has necessitated a culture of pampering and pandering to the poor even in urban areas. For example, hawkers in Kolkata cannot be removed and has now been legalized as everyone wants their votes. Auto-rickshaws cannot be taken to task as “livelihood of poor people” depend on it even if they spew black smoke and cause lung cancer. The greater good is never important if the interests of a minority number of “poor people” are hurt.

Mind you, I am not anti-poor. I just think that the actual poor would be better off, if the state could provide them with better access to healthcare facilities, education, food security and opportunity for getting jobs. No interest is shown in these aspects of public policy (that is generally true for India as a whole). 

Right now, all developmental work is stopped because to do anything you would need land and land primarily belongs to those who are tagged as rural poor or are in the possession of land-grabbers who cannot be vacated. Mamata Banerjee's sudden change of fortunes after the complete washout in the 2004 Lok Sabha and 2006 Bidhan Sabha elections came on the back of her relentless agitation against the Tata Nano factory at Singur and the Chemical Hub at Nandigram. The ruling party completely mismanaged both these initiatives and the end result was that both had to be scrapped.

A party which has come into the limelight by blocking industrialization will find it very difficult to push through any industrial development program. The would risk alienating those very people on whose support they have come to power. Creating a land bank in a state like Bengal is also difficult as the only arid land that is available is either in the hills or in districts like Purulia and Bankura where there is a huge problem with the Maoist movement now. Also, the physical infrastructure in these districts leaves a lot to be desired for industrial development.

Another aspect which would be intriguing to watch is how the new government tackles the cultural issue of bandh/gherao/hartal. Bengal has been the worst offender in this area and it has permeated in the fabric of the culture. Unless, this issue is resolved or atleast tamed, new investment would be hard to come by.

There are many more issues which plague Bengal today including huge budget deficits, complete lack of public infrastructure, politicization of democratic institutions and rampant corruption.

Whoever wins this election, these issues need to be addressed for the development of the state. It looks, for the time-being, very much like a possible case of the winner's curse.

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