US embassy cable - 04KATHMANDU879

UNCLAS SECTION 01 OF 03 KATHMANDU 000879 
 
SIPDIS 
 
STATE FOR SA/INS AND DS/IP/NEA 
STATE ALSO PLEASE PASS USAID/DCHA/OFDA 
STATE ALSO PLEASE PASS PEACE CORPS HQ 
USAID FOR ANE/AA GORDON WEST AND JIM BEVER 
MANILA FOR USAID/DCHA/OFDA 
LONDON FOR POL/GURNEY 
TREASURY FOR GENERAL COUNSEL/DAUFHAUSER AND DAS JZARATE 
TREASURY ALSO FOR OFAC/RNEWCOMB AND TASK FORCE ON TERRORIST 
FINANCING 
JUSTICE FOR OFFICE OF THE DEPUTY ATTORNEY GENERAL/DLAUFMAN 
NSC FOR MILLARD 
SECDEF FOR OSD/ISA ALVERSON 
 
E.O. 12958: N/A 
TAGS: PINS, PTER, CASC, PGOV, NP, PHUM, Maoist Insurgency 
SUBJECT: UPDATE ON NEPAL'S MAOIST INSURGENCY, MAY 1-7, 2004 
 
REF: (A) SECSTATE 96295 
     (B) KATHMANDU 846 
     (C) KATHMANDU 722 
 
SUMMARY 
------- 
 
1.  On May 4, the Communist Party of Nepal (Maoist) reacted 
angrily to its inclusion on the U.S. Terrorist Exclusion 
List (REF A).  Following continued Maoist threats and 
violence against their work in the far-west region of Nepal, 
some international donors announced on May 6 that they would 
suspend development work in the region until further notice. 
Contradicting earlier commitments not to target development 
infrastructure or project sites the Maoists on May 1 
attacked a government agricultural project site in the 
eastern Terai and forced the closure of the only railroad in 
Nepal.  On May 6, in the same district, the Maoists looted 
close to USD 60,000 from a local bank.  There continue to be 
widespread reports of Maoists threatening government 
officials in an effort to force them to resign from their 
posts.  The result has been a shift in government structure 
to the district level.  END SUMMARY. 
 
MAOISTS ON U.S. TERRORIST EXCLUSION LIST 
---------------------------------------- 
 
2.  On May 4 the Maoists, in response to being included on 
the U.S. Terrorist Exclusion List (REF A), issued a scathing 
editorial in the Janadesh Weekly (Nepali language, Maoist 
sympathetic).  The editorial called the designation an 
indication that the U.S. did not support peace in Nepal and 
opposed "the emergence of Maoists as a power which can 
challenge American imperialism."  Press reports further 
indicated that Maoist leader Baburam Bhattarai stated that 
the U.S.' exclusion designation demonstrated America's 
desire to "make Nepal a battlefield, aimed at inciting India 
and China to go to war." 
 
DONORS SUSPEND DEVELOPMENT 
WORK IN FAR WEST 
-------------------------- 
 
3.  On 6 May, the Netherlands aid organization (SNV), the 
British Department for International Development (DFID), and 
German Technical Cooperation (GTZ) announced during the 
closing session of the Nepal Development Forum that they had 
suspended development activities in the Kailali District and 
in the Karnali Zone (in the far-west) as a result of 
"unacceptable" Maoist demands and threats against a number 
of development agencies (REF B).  SNV also announced that it 
had topped all of its development activities in the mid-west 
as a result of Maoist threats.  World Food Program (WFP) 
announced that in the absence of these agencies' technical 
assistance, its programs, and specifically the Rural 
Community Infrastructure Works program, would also be 
suspended until further notice. 
 
 
MAOISTS DESTROY A GOVERNMENT AGRICULTURE 
DEVELOPMENT PROJECT AND LOOT BANK 
------------------------------------------ 
 
4.  Violating an earlier commitment made by Maoist supreme 
leader Prachanda not to target development infrastructure or 
project property, on May 1 approximately 200 Maoists 
attacked a government agricultural project site located 
about 17 km north of Dhanusha District headquarters (in 
eastern Terai).   The site provides agricultural irrigation 
to 23 districts.  New reports indicate that estimated damage 
from the attack is over NRs. 80 million (over USD 1.1 
million).  The attack forced the closure of the Janakpur- 
Jayanagar railway (the only railway in Nepal) and will 
likely lead to irrigation problems in the Terai.  On May 6, 
Maoists looted close to USD 60,000 from the Everest Bank 
located in Janakpur (Dhanusha District headquarters). 
According to local news reports, to prevent security forces 
from responding to the situation the Maoists disconnected 
phone lines and placed bombs along roads leading to the 
bank. 
 
RUMORS OF MAOIST EMBARGO RESULT IN STRANDED 
TRUCKS AT TATOPANI BORDER CROSSING 
------------------------------------ 
 
5.  According to news reports, over 50 trucks transporting 
consumer goods bound for Kathmandu have been held at the 
Tatopani customs border crossing (along the Chinese-Nepal 
border) since May 5 following rumors that the Maoists have 
embargoed the area. 
 
MAOISTS TARGET GOVERNMENT OFFICIALS 
AND DISTRICT HEADQUARTERS 
----------------------------------- 
 
6.  The Maoists continue to target government officials and 
offices.  In Dang (mid-western region), over 100 appointed 
local government representatives reportedly resigned in fear 
of Maoist reprisals.  Reports indicate that in Nawalparasi 
District (in central Terai), Maoists padlocked over 60 local 
government offices in an effort to prevent government 
officials from reporting to work.  Reports from Bardiya (in 
western Terai) indicate that approximately 95 percent of 
local government offices had shifted to district 
headquarters following Maoists threats.  In Ilam (in eastern 
Terai) reports allege that 49 nominated government officials 
refused to assume their posts following Maoists threats. 
 
MAOISTS CONDUCT POLITICAL CAMPAIGNS; 
FORCED RECRUITMENT CONTINUES 
----------------------------------- 
 
7.  Maoists continue to force villagers to participate in 
their political events.  In Dadeldhura (far-west), Maoists 
are reportedly forcing women to participate in a seven-day 
women's program.  As a result, over 100 women fled to the 
district headquarters to avoid this.  Reports from Kalikot, 
also in the far-west, mention that hundreds of people have 
been forced by the Maoists to participate in military 
training.  On May 2, reports from Kailali District (far- 
west) allege that the Maoists have abducted over 500 ex- 
Kamaiyas, or bonded workers, and have taken them to the 
central part of the district. 
 
8.  Six local schools in Kalikot (far-west) closed following 
a Maoist demand that each school send 50 participants to its 
"Maoist Student Meet" on May 9.  Students, citing fears of 
forced conscription, have left their villages for the Doti 
district headquarters.  As a result, schools in the district 
headquarters, Dipayal, and neighboring Silgadi are filled 
beyond capacity and have been forced to turn students away. 
Reports indicate that dozens of students from Achham 
District (located in the far-west) fled across the border to 
India following the April 12 RNA aerial attack on their 
school (REF C). 
 
BOGUE