US embassy cable - 04KATHMANDU1372

UNCLAS SECTION 01 OF 02 KATHMANDU 001372 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: OPRC, PGOV, PREL, KMDR, NP 
SUBJECT: WEEKLY NEPAL MEDIA REPORT FROM JULY 13 TO 19, 
2004 
 
 
STATE FOR NP, AC, PM 
STATE FOR IN/R/MR 
STATE FOR SA/INS, PM/CBM, PM/PRO 
STATE FOR SA/PPD 
 
1.  POLITICAL AFFAIRS 
 
-- FM unveils Rs 111 billion budget: Deputy Prime 
Minister and Finance Minister Bharat Mohan Adhikari 
unveiled Rs 111.68 billion-budget ordinance for the 
fiscal year 2061/62 (2004/05).  The budget does not 
make any radical departure from those of the previous 
years.  It has given continuity to the reforms 
programs.  Of the total, Rs 47 billion has been set 
aside for development purposes.  The budget aims to 
raise Rs 66.26 billion as revenue; Rs 15.35 billion 
from foreign grants; Rs 16.95 billion as foreign loans; 
and Rs 13.11 billion will be the deficit.  Adhikari has 
touted the budget as peace-oriented.  He has set up a 
peace fund of Rs 20 million. (Major reports, 7/17) 
 
-- Civil servants to run local bodies: The government 
has decided to let the civil servants run the local 
bodies after the tenure of the members appointed by the 
earlier government ended Thursday.  (Media reports, 
7/16) 
 
-- Deuba on a mission to please army: "Prime Minister 
Sher Bahadur Deuba's mission to equip the army does not 
end at just that but he has been trapped in the nexus 
of weapon-dealers.  Deuba is increasing defense budget 
and getting more weapons.  For the same reason, Deuba's 
wife Arzoo Deuba is going to America and Belgium via 
Hong Kong.  Deuba's refusal to declare ceasefire is 
also said to be influenced by the same weapons-mafia..." 
(Leftist "Yugpatra," V/W, 7/15) 
 
-- Govt will not announce unilateral ceasefire: Even as 
the CPN-UML is trumpeting a possible unilateral 
ceasefire announcement by the government, Prime 
Minister Sher Bahadur Deuba Tuesday ruled it out. 
Deuba said he always favored a meaningful dialogue for 
permanent peace in the country and that the government 
would not make a decision on a ceasefire in haste.  He 
further said he would rather not opt for peace that 
would have an abrupt end. (Pro-India "The Himalayan 
Times," E/D, 7/14) 
 
-- Talks on with India, UN to solve insurgency: Nepali 
Congress President Girija Prasad Koirala said he has 
already held three rounds of talks with India and the 
UN to initiate peace talks with the Maoists.  "I have 
already talked to the representatives of UN Secretary- 
General Kofi Annan and India," he said Monday. (Media 
reports, 7/13) 
2. MAOIST INSURGENCY 
 
-- 14 teachers, 40 pupils abducted from Valley: In the 
first instance of its kind in Kathmandu Valley, Maoists 
Sunday kidnapped over 40 students and 14 teachers from 
two schools on the outskirts of the Valley.  The school 
is situated just four kilometers away from an army 
barrack. (The Himalayan Times, 7/19) 
 
-- Maoists' killing spree heightens: The Maoists have 
heightened their violent activities over the past week. 
They have killed a teacher, a government official, 
shopkeepers and other civilians and also exploded bombs 
at different places in the capital.  Outside of the 
capital too, the rebels' activities has increased. 
They shot dead Dhan Bahadur Bam, the Mayor of Dhangadi 
municipality in Kailali district Monday afternoon. 
(Major reports, 7/13-19) 
 
-- No talks with government anymore: The All Nepal 
National Independent Students' Union -- Revolutionary 
(ANNISU-R), the student wing of the Maoists, said they 
were ending all efforts to sit for dialogue with the 
government and charged the government of breaching the 
terms of agreement with the students. (The Himalayan 
Times, 7/17) 
 
-- Bomb explosion kills woman: The Maoists exploded a 
bomb in front of the Nepal Telecom office in Lalitpur 
on Thursday killing an elderly woman.  Maoists claimed 
responsibility for the explosion and claiming that the 
action was taken against Nepal Telecom for selling only 
the half of the promised 50,000 lines of pre-paid 
mobile to the public and selling a huge number of SIM 
cards to the "Royal American Army" (Maoists' label to 
the Royal Nepal Army) and others in black market. 
(Media reports, 7/16) 
 
3. NEPAL-U.S. 
 
-- New U.S. envoy for peace, prosperity in Nepal: Newly 
appointed U.S. Ambassador to Nepal James Francis 
Moriarty said that America sincerely desires to see a 
peaceful democratic system and economic prosperity in 
Nepal.  In his first encounter with the Nepali press, 
Moriarty said that his priority is to see the 
resolution of crisis.  On Bhutanese refugees problem, 
he said that the bilateral talks between Nepal and 
Bhutan was the best solution.  He, however, said that 
the U.S. was preparing to provide humanitarian support 
to the refugees. (Centrist "Kantipur," V/D and others, 
7/18) 
 
-- King receives letters of credence: King Gyanendra 
received letters of credence from Ambassador Designate 
of the United States of America to Nepal James Francis 
Moriarty at the Royal palace on Friday.  Prime Minister 
Deuba was also at the event. (Media reports, 7/17) 
 
-- American bomb at airport: "A suitcase with the 
address: American Embassy, Panipokhari, Nepal on one 
side and 'Bomb Inside' on the other side reached the 
Kathmandu airport last Tuesday, causing panic among 
airport officials.  The cargo building was vacated and 
the security defused the bomb..."  The customs office is 
tightlipped over which company and flight the suitcase 
came from... One army official said that the embassy must 
have brought the bomb for training.  Does the embassy 
hold security trainings?"  (Leftist "Jana-Aastha," V/W, 
7/14) 
 
4. OTHERS 
 
-- Economy projected to grow by 3.6 percent: Despite 
continuing conflict in the country, a government 
economic survey has projected the economy to grow by 
nearly 3.6 percent. (Major reports, 7/16) 
 
-- Blair hails Deuba, offers help: British Prime 
Minister Tony Blair congratulated Prime Minister Sher 
Bahadur Deuba on forming a new multi-party government 
and also offered help to Nepal to push ahead the peace 
process. (Media reports, 7/16) 
 
-- Donors to resume works in Karnali: The major four 
donor agencies have decided to resume their development. 
works in Karnali zone following security assurance from 
Maoists.  Earlier, ten donor agencies including SNV, 
GTZ, DFID and WFP, had suspended their works in Karnali 
zone from mid-May citing deteriorating security 
situations and threats from Maoists. 
(www.kantiDuronline.com, 7/14) 
 
MORIARTY