US embassy cable - 03KATHMANDU2048

C O N F I D E N T I A L SECTION 01 OF 02 KATHMANDU 002048 
 
SIPDIS 
 
STATE FOR SA/INS AND S/CT 
 
E.O. 12958: DECL: 10/21/2013 
TAGS: PTER, CASC, ASEC, BEXP, NP, Maoist Insurgency 
SUBJECT: NEPAL:  MAOISTS ISSUE CONCILIATORY STATEMENT; 
ACTIONS CONTRADICT SUPPOSED NEW POLICY 
 
REF: A. KATHMANDU 2020 
 
     B. KATHMANDU 1964 
 
Classified By: AMB. MICHAEL E. MALINOWSKI.  REASON:  1.5 (B,D). 
 
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SUMMARY 
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1.  (C)  In an October 21 press statement, Maoist leader 
Prachanda announced that the insurgents would no longer 
attack infrastructure, political party workers, members of 
the security forces on leave, and assistance projects, except 
those funded by "American imperialists."  The statement, 
which summarizes decisions taken at a recent Politburo 
meeting, likely reflects growing Maoist awareness of the 
increasing unpopularity of their violent and destructive 
tactics among their purported supporters in underdeveloped 
rural areas.  A Maoist attack on a local government office 
building in Bhaktapur District in the early morning hours of 
October 22 directly contradicts the supposed new policy and 
calls into question the Maoists' sincerity in implementing 
it.  Besides threats against local Coca-Cola and 
Colgate-Palmolive operations, the Maoists have repeatedly 
threatened and attempted to extort money from Pepsi 
distributors in Nepal.  The singular swipe at U.S.-funded 
assistance programs, moreover, strengthens the case for a 
possible designation of the Maoists under E.O. 13224 on 
terrorist financing.  End summary. 
 
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A KINDER, GENTLER PRACHANDA? 
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2. (U)  Late on October 21 a number of local media 
representatives received an e-mail message, purportedly from 
Maoist leader Prachanda, announcing several policy changes, 
which were reportedly decided at a recent Politburo meeting 
held at an undisclosed location.  Claiming that the Maoists' 
military "capabilities have improved . . .(so that) from the 
hills to the Terai and in all rural areas the old state power 
has ended," the statement declares that "all sabotage against 
the Village Development Committee buildings (the smallest 
unit of local government; Maoists have destroyed or damaged 
one-third of all such structures in the country), 
telecommunication towers, empty army barracks and police 
posts and other physical infrastructure will be 
discontinued."  Instead, such infrastructure will be 
"protected, promoted and mobilized in the interests of the 
people.  (Disciplinary) action against the enemies of the 
people and spies for the old regime  will not be undertaken 
by the People's Army itself but rather through the people's 
constitutional and legal process.  . . . No physcial 
punishment will be given to lower-level personnel of the army 
and police while they are on leave; instead they will be 
persuaded to quit their posts and work for the people.  Their 
families will be protected.  Likewise, no action will be 
taken against political leaders and party workers in the 
rural areas on the basis of their political beliefs.   . . . 
Action against anyone found guilty of being an informant will 
be initiated according to the people's constitutional 
process."  With respect to extortion, the statement claims 
that common people will be allowed to give "donations" 
voluntarily, while big businesses, industrialists, transport 
operators and organizations will be assessed a fixed "tax." 
No attacks will be made on NGO and INGOs "other than those 
run by American imperialists."  Non-US-funded aid projects 
will be allowed to continue "in coordination with the local 
people's government." 
 
3.  (U)  The statement notes that the Maoists will "formally 
appeal" to the United Nations and other countries, especially 
India and China, to "extend support" to the insurgents, "who 
had gained the trust of the citizens."  It announces the 
appointment of Politburo member and former negotiator Krishna 
Bahadur Mahara as spokesman, whose responsibilities include 
"suppressing the false publicity of the old state power," and 
concludes by reporting the Politburo's resolve "to prepare 
for counterattack against enemies." 
 
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ACTIONS SPEAK LOUDER THAN 
POLITBURO PRONOUNCEMENTS 
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4. (U) While the Maoist leadership was scrupulous in 
circulating news of its revised policy directives to major 
media outlets, it was apparently less diligent in getting the 
word out to its operatives in the field.  At about 0400 local 
time on October 22, suspected Maoist insurgents bombed and 
set fire to a Village Development Committee building in 
Bhaktapur District. 
5.  (C) The Maoists' "tax" on "big businesses" and 
"industrialists" will likely include U.S. investments and 
distributors of U.S. products.  Besides repeated threats and 
extortion demands directed against local representatives of 
Coca-Cola and Colgate-Palmolive (Ref A), the Maoists have 
also targeted local distributors of Pepsi products.  On 
September 17 a Pepsi sales manager and seven other employees 
traveling in Rupandehi District were robbed at gunpoint and 
their vehicle set on fire.  The attackers reportedly shouted 
anti-American slogans.  On October 9 suspected Maoists robbed 
and beat the driver of another Pepsi truck in in 
Sindhupalchowk District (Ref B), torching the vehicle.  The 
local manager reports that his company has received at least 
five extortion demands since July. 
 
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COMMENT 
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6.  (C)  The savage killings of mainstream political party 
activists, soldiers on leave, and members of servicemen's 
families, their exorbitant and excessive extortion demands, 
their senseless destruction of vital infrastructure, and 
their interference with popular aid programs have seriously 
eroded the insurgents' base of support among their purported 
constituency--the rural poor.  This supposed softening of 
Maoist tactics may reflect no more than the Politburo's 
realization that unrestrained, random violence has cost it 
valuable political capital among the very members of Nepali 
society in whose interests the Maoists claim to be fighting. 
 
7.  (C)  Comment Continued:  Nonetheless, we expect the 
Maoists (and perhaps others in the donor community and civil 
society) to cite this declaration as a reason to forestall a 
possible designation of the Maoists under E.O. 13224 on 
terrorist financing.  We think this would be a mistake.  We 
seriously question whether the Maoists' commitment to 
implementing this "new" policy extends beyond the 
rhetorical--especially given the Oct. 22 attack on the VDC 
building, which directly contravenes those directives.  The 
decision to assess a "tax"--without even the polite fiction 
of such a levy being a "voluntary donation" on large 
businesses indicates that U.S. investments like Coca-Cola can 
expect continued harassment, extortion, and threats that will 
render their continued operation increasingly difficult. 
Moreover, the Maoists' singling out of US-funded aid 
activities shows that they remain committed to undermining 
our development assistance programs--one of our most 
important foreign policy objectives in Nepal.  We continue to 
believe that a designation of the Maoists under E.O. 13224 is 
justified. 
MALINOWSKI