The Analytical Economist: Reaching an Economic Event Horizon; February 1996; Scientific American Magazine; by Wallach; 1 Page(s)
Acommunist government facing economic ruin makes deals with Western businesses, promising market reforms and a docile workforce to attract investment. It sounds like yet another story from Eastern Europe-- right down to $100 million from financier George Soros to help build a new billion-dollar petrochemical complex. Instead it's Calcutta, capital of the state of West Bengal in India, where last fall government authorities working to modernize the former gem of the British Empire finally banned rickshas.
After Maoist insurgents in the state were brutally suppressed by India's central government, during the late 1960s and early 1970s, a more moderate Marxist- Communist Party won at the polls in 1977 and has stayed in power in West Bengal ever since. Former foreign investors remember the early years of the party's accession as a time of constant strikes and almost nonexistent electricity. The conservative Congress Party now governs most of the rest of India, and West Bengal has an economic growth rate a little better than half that of the rest of the country.