US embassy cable - 02KATHMANDU655

C O N F I D E N T I A L SECTION 01 OF 02 KATHMANDU 000655 
 
SIPDIS 
 
LONDON FOR POL/RIEDEL 
 
E.O. 12958: DECL: 03/31/2012 
TAGS: PGOV, PTER, ELAB, ECON, ASEC, CASC, PREF, PHUM, NP, Maoist Insurgency 
SUBJECT: WEAVING TERROR: MAOIST ATTACKS ON CARPET INDUSTRY 
CONTINUE 
 
REF: A. 01 KATHMANDU 2352 
     B. 01 KATHMANDU 1321 
 
Classified By: AMBASSADOR MICHAEL E. MALINOWSKI, REASONS 1.5(B),(D) 
 
1. (C) Summary.  For five minutes on the evening of March 25, 
forty to fifty suspected Maoist youths terrorized a carpet 
business at the edge of Nepal's capital city, setting fires 
and causing extensive property damage.  No one was injured. 
Now fearful and discouraged, the owner of the business 
expressed bitterness because no one had contacted him to get 
his story but added that he was too afraid to talk to anyone. 
 The firm had recently refused to allow radical trade union 
organizers into their shop and had received written threats 
and requests for money from the Maoists.  The March 25 attack 
was the second in a month against Tibetan-owned carpet 
businesses and continued a string of attacks stretching back 
to last summer.  Nepal's carpet industry may never recover. 
End Summary. 
 
Maoist Raid on Carpet Manufacturer 
---------------------------------- 
 
2. (SBU) Between forty and fifty suspected Maoists invaded 
the compound of the Himali Rug House in the Boudha area of 
Kathmandu just after 6:00 p.m. on March 25.  In their raid, 
which lasted barely five minutes, the Maoists threw a dozen 
"petrol bombs" (Molotov cocktails), damaging USD thousands 
worth of carpets and a new Toyota automobile.  The damage 
would have been much worse but the Maoists, petrol bombs 
managed to penetrate only one window - bottles thrown towards 
the owner,s office missed their target - and the firm had 
sent out a large shipment of carpets the day before.  No one 
was injured.  It was the second attack on Kathmandu's carpet 
firms in March. 
 
2. (SBU) The firm,s compound, containing the owner,s home, 
a warehouse for sorting dyed wool, housing for employees, and 
carpet showrooms, sits at the edge of a densely populated 
area but borders an expanse of rice paddy.  A national 
forest, Gokarna, lies just beyond the fields. 
 
Young and Out of Nowhere 
------------------------ 
 
3. (SBU) According to eyewitnesses, the mob of Maoists was 
made up of youths, none more than 25 years old, and included 
six or seven girls.  They appeared as if from nowhere, 
apparently having approached the scene from several 
directions at once, including across the forest and through 
the paddy.  After charging the gate, a few members of the 
gang restrained the single guard on duty and about a dozen 
stood sentinel outside while the rest rampaged through the 
compound.  They asked for the boss - who was out on an errand 
- but not by name. 
 
4. (SBU) After consummating their terror, the mob scattered, 
some running down the crowded street that leads to Boudha 
stupa.  Two Bihari employees of the firm followed, screaming 
to passers-by to stop the vandals, who, they yelled out, were 
Maoists.  No one responded. 
 
No Contact 
---------- 
 
5. (C) Aside from the police, the owner had not received 
inquiries from any other quarter, including journalists, 
human rights organizations, victims groups, or the Office of 
Tibet.  (The owner is an ethnic Tibetan holding a Nepali 
passport.)  Although local newspapers covered the story, 
quoting police sources, they did not contact the firm for 
confirmation or comment.  The owner criticized one paper in 
particular because it had put the number of invaders at only 
fifteen.  Even so, he expressed a reluctance to speak with 
human rights or victims groups, saying he was too scared to 
talk to anyone.  The owner,s family has gone to live with 
relatives.  He himself spends nights at the homes of friends, 
or in hotels.  "They,re looking for me," he said.  He felt 
insecure, and helpless, and could not eat. 
 
Labor Problems, Threats, Preceded Raid 
-------------------------------------- 
 
6. (C) The owner also admitted that he had had labor problems 
in the past.  When approached recently by leaders of a 
radical labor union, he had declined to allow them to 
organize in his shops.  He had also been solicited for 
donations to the Maoist cause, and had been threatened when 
he refused to pay.  Nonetheless, he did not report these 
incidents to the police because he felt that they would not 
be responsive, and that if he did make a report it might 
cause trouble for him.  After the Maoists, raid, the police 
began sending two officers to pass the night on the compound, 
in the room closest to the gate. 
 
7. (C) The firm exports primarily to the U.S.; its main buyer 
has been an up-scale carpet store off Union Square in New 
York City.  The owner's daughter, age four, was born in New 
York and is an American citizen.  His son, age three, holds 
Nepalese citizenship. 
 
Carpet Makers Weaving in Terror 
------------------------------- 
 
8. (SBU) The March 25 incident was the second attack on the 
Kathmandu valley,s Tibetan-owned carpet businesses in the 
month of March.  On March 7, a package containing explosives 
was left outside a carpet showroom in the Jawalakhel area of 
Patan.  Security forces moved the bomb to a nearby field, 
where it detonated.  At another carpet showroom just down the 
street, a similar explosive package blew up at another carpet 
showroom December 3, killing two (Ref A).  And in an incident 
much like the March 25 attack, several dozen suspected 
Maoists in July, 2001 raided a carpet factory in Thimi, a few 
miles east of the capital, setting fire to piles of carpets 
with petrol bombs (Ref B).  The owner of the Thimi factory 
was an ethnic Newar. 
 
Comment 
------- 
 
9. (SBU) The string of attacks on carpet firms over the past 
year has increasingly demoralized an industry already 
suffering from sagging sales abroad and uncertain political 
conditions at home.  Whether the attackers were Maoist 
regulars, sympathetic unionists, or merely opportunistic 
troublemakers, carpet manufacturers now live in fear, both 
for their own safety and that of their families.  In most 
cases, their enterprises have taken decades to build up; 
employ thousands of Nepalese workers; and generate about 
twenty percent of Nepal,s foreign currency earnings.  Under 
current conditions, Nepal's carpet producers do not see how 
they can reestablish reliable chains of production.  Losing 
one of its few viable industries will accelerate Nepal's 
economic disintegration and further cripple its state 
finances. 
MALINOWSKI