Mamata Banerjee Wants To Visit Spain And Dubai To Scout For Investments; Here’s Why It Could Be A Futile Exercise

Bengal Chief Minister Mamata Banerjee has planned a week-long trip to Spain and Dubai to scout for investments from those countries. 

According to senior state officials, the Chief Minister is planning to travel abroad by the end of next month. The avowed purpose of the overseas trip is to showcase Bengal as a prime investment destination to potential investors in Spain and Dubai.

Investors who evince even perfunctory interest will be invited to the forthcoming 7th edition Bengal Global Business Summit (BGBS) scheduled for 21 and 22 November in Kolkata. 

The BGBS is an annual business jamboree that was conceived by the Trinamool government in 2015 and was held every year till 2019. It could not be held in 2020 and 2021 because of the Covid-induced pandemic, and resumed last year. 

A number of businessmen from all over the country are invited to these lavish jamborees where guests are put up at five star hotels and accorded VIP treatment.

A handful of businessmen from foreign countries have also attended these summits, but it is usually envoys from the invited countries who attend the BGBS out of courtesy. And the state government passes them off as ‘business delegations’ from those countries. 

Banerjee has also been highly imaginative in giving out statistics (of investment proposals) to tout the success of the summits. 

Bengal’s Claims On Investment Proposals

Going by official figures (of the state government), Bengal received investment proposals worth a whopping Rs 23.76 lakh crore in the first six editions of the BGBS.

That’s much more than Bengal’s GDP (in 2022-2023) that stood at Rs 17.13 lakh crore!  

Thus, if these official figures are to be believed, Bengal ought to have more than doubled its economy since 2016. But that is far from true. 

Economists say, and their contention is borne out by a close perusal of statistics of the industries and other state departments, that only a small fraction of the total investment proposals actually materialise. 

Also, the state government clubs the massive infrastructure projects sponsored by the union government in highways, bridges, ports, airports, railways and other sectors with investment proposals received in a particular year. 

“That makes no sense since central projects do not depend on business summits and happen irrespective of them. The union ministries plan projects in a state not in response to business summits in a state, which are aimed solely at private investors,” said a former IAS officer who retired as the secretary of a department a couple of years ago. 

Not only central projects, but even the expected financial inflows to the state from the centre, for centrally-sponsored welfare programmes like the Pradhan Mantri Awas Yojana and the Pradhan Mantri Gram Sadak Yojana, are touted as proposed investments.

What is also amusing, say economists, is the state government’s practice of including projects like expansions of private hospitals and setting up of private universities in the state.

These planned investments are included in the figure of ‘proposals for investments received’ in order to falsely showcase the success of a business summit. 

“We have often seen officers, ministers and even the chief minister herself coaxing and cajoling industrialists to announce investments, and they have to oblige out of courtesy. Even casual enquiries by potential investors are touted as investment proposals. The entire objective is to somehow tote up an impressive figure to announce that a business summit was a resounding success,” said the retired IAS officer. 

The Reality

Shantanu Mukherjee, an economist who teaches the subject at a prominent private university, said that if even one-third of the total investment proposals ostensibly received at the last six business summits had materialised, Bengal’s economy would have registered a vast improvement by now. 

“But the fact is that Bengal lags woefully behind many other states in industrial output and in GSDP. Unemployment has increased substantially over the last ten years, as has disguised unemployment and under-employment. The number of job-seekers going out of the state in search of employment has been increasing every year, and the state’s debt burden is rising alarmingly,” said Mukherjee. 

All this, he pointed out, does not tie in with the tall claims made by the state government after every edition of the BGBS that a few lakh crore worth of investment will flow into the state.

The forthcoming edition of the BGBS also promises to be no different than the last six editions. 

Banerjee’s Past Overseas Visits

Chief Minister Banerjee had, in the past, visited some countries to showcase Bengal and scout for investments.

She visited Singapore in August 2014, the United Kingdom in July 2015, UK and Netherlands in November 2017, and Italy and Germany in September 2019. 

But precious little came out of those meetings and a close search of government records and statistics revealed that no significant investments came into Bengal from those countries. 

The Bharatiya Janata Party (BJP) and the Congress have regularly lampooned Banerjee for her foreign visits to scout for investments.

Congress leader in the Lok Sabha Adhir Ranjan Chowdhury says those visits are her “annual overseas holidays”. 

BJP’s Suvendu Adhikary said that the state government should publish a white paper on the costs incurred by the public exchequer on not only Mamata Banerjee’s foreign visits, but also on hosting the BGBS, and provide a comparison to the actual investments received in the past 12 years, since the Trinamool assumed power in the state. 

Why Spain And Dubai

According to senior state officials, the Chief Minister decided to visit Spain after she received an invitation from a Spanish delegation that visited the Kolkata Book Fair in February this year. 

Spain was the theme country at the Kolkata book fair and apart from some Spanish authors, representatives from the Spanish embassy in New Delhi also visited the fair and met Chief Minister Banerjee. 

They reportedly invited Banerjee to the Liber International Book Fair in Madrid in early October. 

But the Chief Minister cannot be seen to go to Spain only to attend a book fair. Hence, she has declared that she will meet investors in that country and also invite them to the next edition of the BGBS. 

For good measure, and in order to make the proposed trip look like an official one, the state government has also declared that the Chief Minister will utilise her stopover in Dubai to meet NRIs and urge them to invest in Bengal. 

But the composition of the proposed delegation accompanying her on her prospective visit to Spain has let the cat out of the bag. 

Apart from the usual group of a handful of Bengal-based industrialists who accompany her on all her business trips, members of some civil society organisations will also travel with her. 

The entire cost of the trip, including the air fares, accommodation in plush hotels, food, travel and incidental expenses of the ‘civil society members’ will be met out of the state’s cash-starved coffers. 

“If it is a business trip, why are these civil society members going with her? The fact is that she wants to take her coterie of sycophantic painters, writers and artistes with her at state expense on a junket,” said Adhikari. 

It may be mentioned here that Bengal's longest-serving chief minister, Jyoti Basu, also used to visit the UK and some other European countries every year to scout for investments.

It is a different matter that not only foreign visitors, but even those from within the country, gave (and still do) give Bengal a wide berth. 

Why Investments Into Bengal Are Difficult

The investment climate is poor in Bengal. The labour force is undisciplined and Bengal presents a dearth of talent. 

The work culture in the state is poor, and rent-seeking politicians of the ruling party are a big disincentive for investors. Many government officials are corrupt and lethargic, and permits and clearances take a long time to come even after greasing many palms. 

Land acquisition is a major headache in Bengal, and made worse by the state government’s hands-off policy which requires investors to deal directly with landowners to procure land for their business ventures. 

Bengal also does not have deep water ports, and its road network is not up to the mark. Add to this the state government’s lack of direction.

All these factors, and more, lead to the foregone conclusion that Mamata Banerjee’s trip to Spain (with a stopover in Dubai) to scout for investments will be a futile exercise. 

But then, as state Congress president Adhir Choudhury says, the real purpose of her visit is to holiday in foreign shores.

But a disclaimer is in order here: the state government has sought clearance from the Ministry of External Affairs (MEA) for the 'junket'.

There is no guarantee that the MEA will grant its approval. About two years ago, it had denied Banerjee permission to visit Rome to address a peace conference.