US embassy cable - 03KATHMANDU1099

C O N F I D E N T I A L SECTION 01 OF 04 KATHMANDU 001099 
 
SIPDIS 
 
STATE FOR SA/INS 
LONDON FOR POL - GURNEY 
SECDEF FOR OSD/ISA - LILIENFELD 
 
E.O. 12958: DECL: 06/12/2013 
TAGS: PTER, PGOV, NP, Maoist Insurgency 
SUBJECT: NEPAL:  MAOIST TRAINING, RECRUITMENT, EXTORTION 
PERSIST DESPITE CEASEFIRE 
 
REF: A. KATHMANDU 0902 
     B. KATHMANDU 0860 
     C. KATHMANDU 1097 
 
Classified By: CDA ROBERT. K. BOGGS.  REASON:  1.5 (B,D). 
 
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SUMMARY 
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1.  (C) The ceasefire between the Government of Nepal (GON) 
and Maoist insurgents, declared on January 29, enters its 
fourth month amid evidence that the Maoists continue to 
train, recruit/conscript, and extort money from the local 
population.  Violations of the code of conduct persist, with 
the number of killings so far (15) topping the tally during 
the 2001 ceasefire.  Relaxed restrictions during the 
ceasefire have allowed the Maoists to increase their presence 
in areas where they were less active and to continue to 
intimidate the population in areas not under sustained GON 
control.  In some areas, the Maoists continue to prohibit the 
GON from re-establishing a presence and/or providing 
services.  Meanwhile, there is a sense of drift in the peace 
process.  Two rounds of talks have made little headway, and 
with the June 4 change in government, built little confidence 
toward a lasting peace.  Despite the Maoists' ongoing 
recruitment, training and "fund-raising," conventional wisdom 
holds that the insurgents will not break the ceasefire, 
especially so near the onset of monsoon weather.  End summary. 
 
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FOUR MONTHS AND COUNTING 
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2.  (C)  The ceasefire between the Government of Nepal (GON) 
and Maoist insurgents, declared on January 29, already has 
surpassed the longevity of the 2001 ceasefire (July 
23-November 26) and offers no signs of impending breakdown. 
Thus far the current ceasefire has seen two rounds of 
dialogue (three rounds were held in the 2001 ceasefire), two 
prime ministers, and with the June 12 appointments of 
Ministers Kamal Thapa and Prakash Lohani as negotiators (Ref 
C), two different GON talk teams.  The two negotiating 
sessions have made little apparent progress so far toward 
lasting peace, and seem to have accomplished even less to 
build confidence between the two sides--especially after the 
GON's very public and  clumsy backpedaling on alleged 
commitments to release prominent Maoist detainees and limit 
patrolling by the Royal Nepal Army (RNA) (Ref A). No date has 
yet been set for a third round of talks. 
 
3.  (SBU)  Reports of violations of the ceasefire's code of 
conduct continue.  According to the Informal Sector Service 
Center (INSEC), a local human rights NGO, 15 people have been 
killed since January 29, of which 6 were killed by GON 
security forces and 9 by the Maoists.  (This compares with 7 
people--all victims of the Maoists--killed in the 2001 
ceasefire.)  The Royal Nepal Army (RNA) has reported two 
clashes with armed Maoist cadres since the ceasefire, in 
which soldiers killed one Maoist in Ramechhap on June 3 and 
one in Okhaldunga on April 24.  INSEC also reports that 162 
people have been abducted by the Maoists since the beginning 
of the ceasefire; 102 remain missing.  According to Rabi 
Kanta Aryal, Assistant Inspector General of Police at the 
National Police Headquarters' Operations Center, many of 
those abducted were alleged to be GON "informers" or tagged 
with having committed social crimes by local Maoist 
vigilantes.  (One police constable in Banke District, for 
example, was kidnapped for having taken a second wife). 
Others may have been "recruited" for service in Maoist 
training camps. 
 
4.  (C)  But if disappearances and killings have declined 
during the ceasefire, extortion continues apace.  The 
Maoists, according to Central Bank estimates, had netted a 
total of nearly USD 6 million from assorted bank robberies 
across the country before the ceasefire.  They have been 
forced since January 29 to rely upon alternative methods of 
fundraising--primarily extortion.  Although the Maoists 
publicly claim that all such donations are willingly given by 
an enthusiastic public, sources contacted report that threats 
of "negative consequences" generally accompany the demands 
for funds.  Large and small businessmen, civil servants, 
teachers, and even local villagers are reportedly being 
pressed for "donations" to help defray the upkeep of Maoist 
cadres in the field.  Poor rural residents in outlying areas 
not under GON control are "asked" to provide food and/or 
shelter.  Those who attempt to resist the extortion demands 
(whether out of principle or sheer economic exigency) are 
sometimes beaten or abducted.  Even the prestigious Soaltee 
Corporation (in which King Gyanendra is a partner) reportedly 
has been contacted for contributions.  According to N.N. 
Singh (protect), Country Manager for Coca-Cola and long-time 
target of such demands, his Maoist contacts explain that 
observing the ceasefire has cut off their more traditional 
sources of income--like robbing banks--and that they thus are 
forced to press the local population for resources.  When 
Singh pointed out that such activities contradict the Maoist 
negotiators' public commitments to cease extortion, his 
contact reportedly replied that he takes his instructions on 
"fund-raising" from Maoist negotiator and Central Committee 
member Krishna Bahadur Mahara.  (Note:  Despite the Maoists' 
repeated importunings and implied threats of "consequences," 
Singh continues to resist their demands.  End note.) 
 
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CONSOLIDATING PRESENCE, 
SPREADING MESSAGE 
------------------------ 
 
5.  (C)   Most sources contacted, including those working in 
government, NGOs, political parties, and the police, note 
that relaxed restrictions during the ceasefire have allowed 
the Maoists to tighten their hold in many of the areas not 
under GON control while permitting them to establish or 
increase their presence in areas, like the southern Terai 
plains, the East, and urban centers like Kathmandu where they 
were not previously as active.  AIGP Aryal expressed alarm at 
what he described as the spread of Maoists in the Terai, 
which heretofore had been comparatively less affected by the 
insurgency.  Subodh Pyakurel, General Secretary of INSEC, 
reports that since the ceasefire the Maoists have banned 
members of his organization from entering certain areas to 
perform human rights monitoring.  No such restrictions were 
placed on INSEC, which maintains local offices in all 75 
districts, during the previous ceasefire or even during the 
state of emergency, Pyakurel observed.  He speculated that 
the Maoists, who have reportedly reactivated the "people's 
courts" that mete out summary "justice" to local miscreants, 
do not want INSEC monitoring their vigilantism or reporting 
their extortion campaigns.  He said that he has publicly 
challenged the Maoist leadership to commit to international 
human rights accords, but has received no reply.  Political 
party leaders also report that in numerous areas the Maoists 
continue to prohibit their workers from carrying out party 
activities or holding meetings.  Similar restrictions have 
not, however, been imposed on the insurgents, they complain, 
who, now that their leaders are "above ground," have been 
exploiting their new-found freedom to spread their political 
message. 
 
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OBSTRUCTING GOVERNMENT WORK 
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6.  (C) In many areas, the Maoists continue to prohibit GON 
civil servants from carrying out their assigned duties as 
well.  Ganga Datta Awasthi, Joint Secretary at the Ministry 
of Local Development, cited the mid-western districts of 
Kalikot, Achham, Rukum, Rolpa, and Jajarkot, as well as parts 
of the far-western district of Bardiya, as the worst 
affected.  In Rukum, Rolpa, and Jajarkot, the GON presence is 
limited to district headquarters (although Maoist "people's 
governments" in some parts of Jajarkot have cooperated with 
GON health workers to provide some limited services).  In 
Kalikot, local Maoist commanders in 17 of the 30 Village 
Development Committees (the VDC is the smallest unit of local 
government) have flatly barred any GON presence, including 
from the only health posts available to the local population. 
 In Achham, civil servants are not allowed to enter 
three-fourths of the VDCs in the district.  In Bardiya, 
nearly one-third of the VDCs are off-limits to the GON. 
(Note:  Along the Rajapur delta in Bardiya, the Maoists also 
have hung posters banning any USG-funded NGO activity as 
well.  End note.)  In Kavre--the district directly adjoining 
Kathmandu--the anti-GON ban extends to about 20 percent of 
the VDCs.  In Salyan, however, GON services are apparently 
permitted on a selective basis, with health officers being 
granted access and mobility but VDC Secretaries being told to 
keep out.  Despite these restrictions, the overall situation 
has improved markedly, said Awasthi, adding that the degree 
of cooperation largely depends on the individual Maoist 
commander in a particular area. 
 
7.  (C)  Even in those VDCs where civil servants have been 
permitted to return, most do not stay overnight, Awasthi 
said, both out of fear of possible Maoist violence and 
because the GON has not rebuilt any of the facilities 
destroyed during the conflict.  (Note:  The Maoists have 
destroyed about 40 percent of VDC buildings across the 
nation.  The GON so far has not rebuilt any.  End note.)  He 
said that about half of the nation's nearly 4,000 VDCs have 
not requested the release of their annual budget primarily 
because Maoist restrictions inhibit the development 
activities those funds are meant to support.  Awasthi said he 
finds it difficult to blame VDC Secretaries who do not stay 
at their posts out of fear, observing that families of 
policemen killed by the Maoists receive approximately USD 
10,000 in compensation, while VDC officials' families receive 
nothing. 
 
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DIALOGUE DELAYED IS DIALOGUE CONTINUED? 
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8.  (C)  Despite having held two rounds of talks, neither the 
GON nor the Maoists can point to appreciable gains as a 
result.  According to the ICRC, the GON has released as many 
as 1,300 Maoist detainees since the beginning of the 
ceasefire.  Approximately 600-700 remain in custody.  The GON 
continues to arrest some Maoist suspects, most of whom are 
held on weapons violations, rather than under the 
anti-terrorism measures invoked before the ceasefire. 
Although some prominent Maoist detainees have been released, 
several, including Rabindra Shrestha, whose release 
reportedly was promised during the second round, remain in 
custody (Ref B).  The RNA's flat refusal to restrict its 
movements to a 5-km radius around  barracks--after Maoist 
negotiators publicly announced the GON had committed to do so 
during the second round--was another perceived setback to the 
insurgents' prestige.  The June 4 change in government--and 
thus in the composition of the GON negotiating team--has 
muddied prospects for progress in the peace talks still 
further. 
 
9.  (C)  Some GON sources claim the signal lack of progress 
as a victory.  According to Nischal Nath Pandey of the GON's 
Institute of Foreign Affairs, the government has consistently 
employed a strategy of delaying progress and drawing out 
dialogue for as long as possible, reasoning that a 
combination of inclement weather, popular aversion to resumed 
conflict, and overall inertia will keep the Maoists off the 
battle field.  Other sources, including politicians, NGO 
activists, businessmen, and members of the security forces, 
express a similar sang-froid that the Maoists, despite their 
ever-bellicose rhetoric, are not contemplating a return to 
fighting.  According to this rather sanguine analysis, 
tighter Indian control of the border and the perceived threat 
posed by foreign, including US, security assistance have 
forced the Maoist leadership to seek "a soft landing" back 
into the political mainstream. 
 
10.  (C)  Brig. Gen. Dilip Rayamajhi, Director of Military 
Intelligence, told poloff that he shares some of this 
optimism.  The Maoists have to continue training and 
"fundraising" to keep their cadres in the field employed, he 
reasoned; their activism need not presage a return to the 
battlefield.  The RNA assesses that the Maoists have lost 50 
percent of their cadres, he said, basing his analysis on an 
informal estimate that about half of the Maoist cadres who 
have returned home since the ceasefire will be unwilling to 
take up arms again.  (Note:  Given Maoist "recruitment" and 
conscription methods, we question this estimate.  See 
reporting in other channels that may belie his assumptions. 
End note.)  Even though the Maoists are continuing to train, 
their resources are severely limited, he asserted, both 
because of dwindling funds and because of stricter Indian 
border controls.  He pointed to reports that the Maoists had 
begun using wooden bullets while training as evidence of 
their straitened circumstances. 
 
COMMENT 
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11.  (C) The ceasefire, despite the higher number of 
casualties and violations than its 2001 predecessor, has 
given this battle-weary nation a welcome respite.  This 
respite should not, however, lull either the GON, the general 
public, or the diplomatic community into a complacency that 
overlooks the Maoists' obvious activism.  Despite the break 
in hostilities, the Maoists continue to keep large parts of 
the country off limits to the civilian GON, thereby 
undercutting its ability to provide services to disaffected 
segments of the population.  The GON's stalling tactics on 
the dialogue front, aggravated by the June 4 change in 
government, may begin to wear thin with the Maoists, who 
likely are anxious to demonstrate some measure of progress 
and success to their presumably restive cadres.  The recent 
uptick in the Maoists' anti-American rhetoric may reflect 
some of that frustration.  Unfortunately, the new Prime 
Minister's protracted deliberations in choosing a Cabinet 
will likely delay dialogue still more, further diminishing 
immediate prospects for a negotatied settlement. 
 
 
 
BOGGS