The Indian Offensive From Poorhouse to Powerhouse

India is out to capture the markets of the world. Calcutta, that city of squalor, could experience its own Indian summer as an international technology hub – with the help of communist politicians and global investors. Will it be the next boomtown in this IT wonderland?

By Erich Follath

The megacity of Calcutta: "We've rolled out the red carpet for investors."

The megacity of Calcutta: "We've rolled out the red carpet for investors."

Oh, Calcutta, ill-fated Calcutta! Rarely in history has a city been so vilified by its famous visitors. The French anthropologist Claude Lévi-Strauss once called it "the home of everything in the world worth hating." American film director Woody Allen noted, "They have 100 unlisted diseases." V.S. Naipaul, a winner of the Nobel Prize in literature, said, "I know not of any other city whose plight is more hopeless." Naipaul's German literary colleague Günter Grass went even further, coming up with the worst insult of all after living in the city for several months: "It's a pile of crap dumped by God." And even former Indian Prime Minister Rajiv Gandhi called it a "dying city" and wished, back in the 1980s, that it would simply disappear from the face of the Earth.

Today, it is this monstrous city of all places that is emerging as a symbol of globalization and progress unlike any other. It is this filth-encrusted goliath, this leprous giant that is stirring for an assault on the world's markets. It is this metropolis, crammed with 15 million residents, that is poised to lure investors to seize the opportunities brought on by a mighty surge of global capital, and to reap the benefits of the dramatic changes already sweeping across the rest of India.

This country, which once seemed condemned to lag behind forever because of its caste system and the apathy of its one billion citizens, has made huge strides since 1991, when Manmohan Singh, then finance minister and now the country's prime minister, introduced liberalizing economic reforms. In the new millennium, India's growth rate of nearly 8 percent a year is approaching China's. Exports are rising at a double-digit pace. The main engine of this growth is now computer technology rather than inexpensive textiles. After Beijing, New Delhi is regarded as the next globalization powerhouse. The symbol of this revolution is no longer the spinning wheel, but the PC: Gates over Gandhi. Its idols are the "new maharajas," dollar billionaires Azim Premji and Narayana Murthy, and their IT companies Wipro and Infosys.

"India can become a world power," former German Chancellor Helmut Schmidt says succinctly. The magazine New Scientist talks about "the next knowledge superpower" and points out that there are Indians at the top in all leading-edge technologies, from aerospace to high-tech medicine and genetic research. The Bombay magazine Business World has even proclaimed the arrival of the "Indian Century." "We can't keep pace with old-style industry and its infrastructural requirements. But we do have one chance - thanks to a technological revolution as trailblazing as the invention of the wheel: the Internet - and that represents the future of our country."

Optimists say that India is vaulting, not just jumping forward. The constraints of the caste system are vanishing in the free-form cyber world, and barriers to progress are falling away. The arrival of data highways distracts from the shortage of real highways.

Without a doubt, IT and outsourcing companies have created some economic jewels in India. Bangalore, in the southern state of Karnataka, and Hyderabad (nickname "Cyberabad"), in central Andhra Pradesh, have become vibrant urban centers. The German airline Lufthansa has added direct flights to both cities to serve their brilliant international software engineers. But Calcutta has slumbered on - that is, until just recently.

An unlikely alliance is causing quite a stir in this metropolis on the Hugli River. The communist regional government of West Bengal has invited McKinsey, the American consulting company known for its brass-knuckle approach to business reorganization, to their city. Employers view Calcutta as the favorite to become India's next Silicon Valley. They cite as an example the recent development there of "egovernment" systems. "Asia's astonishing new high-tech center: Calcutta on a roll," trumpets Hong Kong's Far Eastern Economic Review. And India's open-market prime minister, Singh, acknowledges that Buddhadeb Bhattacharjee of Calcutta is his favorite chief minister in all India's states because he is "capable, competent and particularly open to investments."

Can it be? Is Calcutta on the verge of a comeback? This problem city, with its proclivity for death and destruction, has been dominated by Marxists for 28 years and is rife with slums and strikes. Can such a place really be the next paradise for investors and the next big winner in the globalization wars? E-Calcutta instead of Oh, Calcutta?

The old Calcutta still rules in the temples of the city, and its queen is named Kali. She is a Hindu goddess with four arms, dark skin and no clothes. Her face is twisted into a grimace and her bloody tongue protrudes disturbingly. A third eye glows on her forehead, hypnotic and piercing. She wears a necklace of men's heads, hacked from their bodies. Believers know that the goddess of destruction is not to be taken lightly. According to Hindu legend, she was fearless in the face of death and, ever proud, chose to be burned alive. Her mate, Shiva, began a desperate dance with the charred body until the entire world quaked. Fear swept over the other gods. The god Vishnu unleashed his holy saws, and Kali's corpse plummeted to earth in 52 pieces. The little toe of her right foot landed near the Hugli River. And on this spot a village bearing a name that was probably derived from hers arose: Calcutta.

Slum quarter: "The home of everything worth hating."

Slum quarter: "The home of everything worth hating."

Under the colonial Raj it was a world city. Until 1912 it w as the capital of India, the jewel in the crown of the British Empire. After 1947 it became a symbol of the bloody birth of a newly independent India. Even now, Kali, the angry patron of the city, still demands sacrifices to keep her rage at bay - pyramids of oranges and mangos, violet hibiscus blooms, and clouds of cinnabar. And twice a week, a kid goat, its forehead painted with a red mark and its body quivering in panic, is killed to appease her. A half-naked priest pins the animal between the prongs of a black pitchfork and slashes through it with a sharpened sword. A burst of blood spurts out, mingling with the milk from coconuts that have been cracked open. The believers dip their toes in the purifying liquid.

Then there is Teresa, the other patron of Calcutta. The Catholic nun from Albania came to Calcutta at the beginning of the 1930s and in 1950 founded her order, the Missionaries of Charity, f or the poorest of the poor, for lepers in the last stages of the disease, and for the disabled who are without families. She won the Nobel Peace Prize and became known as the Saint of the Gutters. She was beatified by the Pope a few years after her death in 1997. A stone's throw away from the temple of Kali stands a figure of Christ on an old colonial building at the end of a street of brothels. This is Nirmal Hriday ("pure heart"), the home for the dying and destitute run by the order. Nuns here still care for the dying and comfort them during their final hours.

The avengers from the pantheon of Hinduism and the merciful Christian nun: It was only in death that they both achieved their full fame, and it was only in death that they found eternal life. Deadly Calcutta, dying Calcutta. The forte of this city, so it seems, lies in t he business of death, not in life itself, and certainly not in any sort of birth or renewal. This is a community that is failing in our world and has its eyes on the next one.

The new Calcutta is symbolized by the chief minister of West Bengal, Bhattacharjee, a man who governs some 85 million people. His team sits in the Writers' Building in Dalhousie Square. This was once the headquarters of the Raj, a splendid colonial building constructed in 1880. Now it is decaying. The walls are pockmarked where the plaster is crumbling. Wet saris flap like shrouds from the rusting cast-iron balcony. Renovation work is only just starting to get underway.

Inside, ancient fans stir the languid, 40°C air. The slowly turning blades raise the dust on the filing cabinets in a little dance, but do little to refresh the waiting petitioners. The dozens of people camped out in the long hallways rub their tired eyes, as if they have spent the night here. But in the minister's outer office, modern technology is applying its own sort of heat to the heat. Here an armada of computers fires the air-conditioning system, which has been set at polar-level temperatures and is spreading an icy chill through the room.

Chief Minister Bhattacharjee, 61, who has been in office since 2000, extends a friendly greeting to the visitor: "Welcome! May I recommend a financial proposition? We've rolled out the red carpet for investors." With his traditional cotton garb and his old-fashioned glasses, he seems like a mild-mannered chief physician lecturing his colleagues about medical advances and persuading them to look beyond conventional methods of treatment. "We need to prevail in a world of global competition. What counts is attracting capital," says the Communist Party head. "Even the communists in China have changed. In Calcutta, we're at least as accommodating to enterprise now."

Then he talks, sometimes sighing or coughing in embarrassment, about all of the mistakes that he and his comrades have made in the past quarter century. At the end of the 1970s, for instance, the Communist Party backed a strike against the introduction of computers in banks. "It was naive of us to believe that we could stop technological progress. Everyone needs to understand the importance of harmonious relations between employers and employees. Otherwise jobs are lost." The head communist also expresses his mistrust of the unions, which his party embraced for so long. Today Bhattacharjee says he won't allow the union leadership to intimidate workers or pressure them to strike. To protect the longedfor IT investors from work stoppages in Calcutta, the government decided to declare all software and outsourcing firms to be essential services. This decision put them on the same level as water and electrical utilities. The bottom line: The police can step in and use violence to put down a strike.

The chief minister looks forward to the future - and sees every indication that Calcutta will flourish. (He calls the city "Kolkata," its official name that is not taking hold, although it was introduced in 2001.) "We have outstanding universities and brilliantly trained engineers," he says. "Land and work are cheaper than in India's competing cities, not to mention abroad - and that's why we are now achieving annual IT growth of more than 70 percent." Does he view himself as the head salesman for Bengal? "Capitalist language makes me feel uncomfortable," he says with a laugh. But in fact, he acknowledges this is his role. Every week, comrade Bhattacharjee heads off like a good little boy to the ribbon-cutting ceremonies put on by this company or that department store.

But he also worries that he will have to lay off workers in government-run companies. A total of 58 such enterprises are said to be affected. "If we need to streamline, we'll create jobs elsewhere," he says with an edge of defiance in his voice.

Capitalism and Mr. Bhattacharjee: a marriage of convenience, not love. The chief minister, who lives in a two-room apartment, thinks little of consumer goods and loves literature, theater and film. Bhattacharjee has published several books, his latest on World War II. He also translates the works of his two favorite authors into Bengali: Gabriel García Márquez and Günter Grass. "Have you seen the film Good Bye, Lenin?" the man who still calls himself a Marxist asks as his guest prepares to take his leave. "Wasn't it funny and sad at the same time, the way they created an artificial communist paradise?"

Bhattacharjee has assembled a group of like-minded people around him, including IT Minister Manabendra Mukherjee and Industry and Commerce Minister Nirupam Sen. Both have been to Germany's IT trade show CeBIT, in Hanover. But these pragmatic, cash-and-curry communists face some opponents among the old-school apparatchiks in the 41-member West Bengali cabinet. Not long ago, one of the communist candidates for mayor of Calcutta openly attacked the "bourgeois" forces with their "decadent" consumer culture and demanded a return to an "egalitarian, simple lifestyle."

  • Part 1: From Poorhouse to Powerhouse
  • Part 2

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