Imperial scum worried that they cannot loot the people

MUMBAI: Capital of about $85 billion earmarked for building huge steel mills and oil refineries could be at risk because the projects are planned in Red Corridor - a Maoists-controlled swathe across India, the second-fastest growing economy in the world.

Investments in five states, including foreign direct input of about $32 billion, could be at risk because of escalating maoist violence that has already claimed 374 lives in 550 attacks in first six months this year, foreign broking firm CLSA has warned.

"Private sector investment, vital to the overall development of any region, may not take place if the government cannot find a sustainable solution to what it insists is a law-and-order problem," CLSA said in a special report on Naxalism released a day after the serial bombing of Mumbai's suburban rail network.

Large corporations such as metal giants Posco, Mittal and Vedanta and refiners like IOC and Reliance Industries have all lined up plans for billion-dollar investments in the natural resources-rich Chattisgarh, Karnataka, Jharkhand, Orissa, and Andhra Pradesh, where armed Maoist guerrillas hold the impoverished tribal natives in complete sway.

The report, widely circulated among the brokers'scores of clients, is said to have made many foreign investors sit up and take note.

"I was shocked at the extent of the problem. I did not know it was so deep-rooted,"said an investment advisor to several portfolio funds after reading the report.

His reaction was shared by many others who, even though had seen sporadic news items of Maoist violence in the hinterlands, had not reckoned the gravity or absence of government in these regions.

"Lack of policy initiatives and the inability to win over the tribals, the largest stakeholder in the hinterlands where the Maoists hold sway, means the Naxalite movement is becoming stronger,"Anirudha Dutta, author of the report, says.

"While it may wax and wane in significance, Naxalite activity continues to simmer and threatens to explode if adequate steps are not taken urgently. Apart from the human costs involved, it will continue to exact a heavy toll on India's economy. There are, however, few signs the government is taking any urgent steps and it remains to be seen how and when it does respond to this major 'challenge', Dutta says in the 31-page report that traces the Naxalite movement from the late 60's.

The CLSA report underlines what many social commentators and economists have been warning for some time now. It quotes PM Manmohan Singh as telling a standing committee meeting of CMs that Naxalites and their Maoist-inspired movement was "the single biggest internal security challenge ever faced by our country".

Singh told ministers that "it (Maoist movement) has gained in strength and has spread to cover 160 out of the 602 districts in the country."

That is more than a quarter of the country, but CLSA estimates that nearly 225 districts or about a third of the nation is affected. Those are districts richest in minerals, metals, oil and gas and forests.

Maoists now believed to control a 92,000 sq km contiguous swathe known as Red corridor beginning in Bihar's jungles on the edge of Nepal (the high seat of Maoism today) and running all the way down to north Kerala at the bottom of the Indian peninsula. Naxalites, who reportedly run a parallel government there, call it the "Dandakaranya Liberated Zone."

These areas are some of the most underdeveloped regions and the guerrillas'writ runs there because they are usually the only protection from exploitative locals and government officials.

When they are not blowing up government establishments, armed Naxalites help the tribals get means of livelihood sometimes by forcing landowners to give up land and often enforcing minimum wages for labourers. They also hold people's courts and help build basic infrastructure such as schools and wells.

"This is something that can be negotiated," said an economist with a large group that is planning to make investments in Orissa.

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