This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 03 KATHMANDU 000262 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR SA/INS AND DS/IP/SA 
STATE ALSO PASS USAID/DCHA/OFDA 
MANILA FOR USAID/DCHA/OFDA 
LONDON FOR POL - RIEDEL 
TREASURY FOR DAS JZARATE 
JUSTICE FOR OFFICE OF THE DEPUTY ATTORNEY GENERAL (DLAUFMAN) 
 
E.O. 12958: N/A 
TAGS: PTER PGOV CASC NP
SUBJECT: NEPAL:  MAOIST CEASEFIRE GENERALLY HOLDING; 
EXTORTION CONTINUES 
 
REF: A. (A) KATHMANDU 0175 
     ¶B. (B) KATHMANDU 0185 
     ¶C. (C) KATHMANDU 0217 
 
------- 
SUMMARY 
-------- 
 
¶1.  (SBU) The Maoist insurgent leadership seems to be 
enforcing so far the moratorium on armed violence among its 
lower-level cadre across the country.  There have been no 
reports of violations of the ceasefire, although extortion of 
funds from major business houses reportedly continues. 
Revised Rules of Engagement have yet to be adopted by either 
side, although Maoist leader Prachanda has called for the 
Royal Nepal Army to return to the barracks.  The Maoists 
appear to be using the respite to rebuild some of the popular 
support squandered during more than a year of violent 
excesses and to mend fences with mainstream political 
parties.  An agenda and schedule for anticipated negotiations 
between the Government of Nepal (GON) and the Maoists have 
not yet been agreed upon, nor has the GON announced the 
composition of its negotiating team.  By cancelling a planned 
general strike and by naming two members of their top 
leadership as negotiators, the insurgents may be trying, at 
least initially, to win jaded public confidence in the 
sincerity of their negotiating efforts.  End summary. 
 
--------------------------------------------- ----------- 
CEASEFIRE BRINGS WELCOME RESPITE FROM BLOODSHED, BANDHS 
--------------------------------------------- ----------- 
 
¶2.  (U) As of COB on February 12, the ceasefire between the 
Government of Nepal (GON) and Maoist insurgents announced the 
night of January 29 (Ref A) generally seems to be holding 
well, with only a few violations reported.  The body of a 
policeman who had been abducted two weeks previously was 
found in the far western district of Kanchanpur the morning 
after the ceasefire announcement; it was unclear when he had 
been killed.  Similarly, the body of a young man abducted 
from his home by Maoists in southwestern Dang district before 
the ceasefire was discovered on February 11.  Local media 
reports speculated that he had been killed before the 
ceasefire was announced, but offered no basis for that 
assumption.  On February 3 suspected Maoists abducted 
brothers Juthe and Durga Bahadur Nepali from their home in 
the mid-western district of Surkhet.  The brothers have not 
been seen since, and their whereabouts are unknown.  (Note: 
During the July-November 2001 ceasefire, the Maoists 
kidnapped 23 Nepalis in separate incidents.  End note.) 
 
¶3.  (U)  There have been no attacks reported against 
installations of the security forces since the January 29 
announcement.  Scattered accounts from locations across the 
country have begun to trickle into Kathmandu relating 
homecomings of long-lost Maoist cadre, the return of some 
civil servants to their long-abandoned posts, and apparent 
efforts, at least on the part of some insurgent commanders, 
to mend fences with local residents and mainstream political 
activists alienated by Maoist violence and excesses over the 
past year.  Reported Maoist approaches to encouraging such 
dialogue range from the seemingly democratic and high-minded 
(a roundtable conference in Rolpa to which local 
representatives of all mainstream political parties were 
invited) to the more typically heavy-handed (armed cadre 
forcing villagers to attend lengthy, ideological harangues in 
the north-central districts of Baglung and Myagdi). The 
Maoists and their affiliated student wing cancelled the 
respective national strikes, or "bandhs," they had scheduled 
to take place from February 13, in comemoration of the 
beginning of the insurgency, as a sign of good faith (Refs B 
and C). 
 
---------------------------- 
WHAT'S OKAY AND WHAT'S NOT? 
STILL UNCLEAR 
---------------------------- 
¶4.  (SBU)  Although there have been no armed engagements 
between the security forces and the Maoists since January 29, 
the lack of terms of reference or a mutually accepted "code 
of conduct" for the ceasefire makes it difficult to determine 
whether there have been violations.  (Note:  During the 2001 
ceasefire--which also lacked a "code of conduct"--the GON 
nonetheless catalogued 87 violations by the Maoists in the 
first two months.  End note.)  In the absence of such terms 
of reference or amended rules of engagement, mutual 
accusations of violations are beginning to surface.  The 
security forces continue to conduct armed patrols--and, in 
some cases, to arrest suspected Maoists--prompting a call 
from Maoist leader Prachanda for the Royal Nepal Army (RNA) 
to "be called back to the barracks and (stop) unnecessary 
raids and spying in plainclothes."  Curfews continue to be 
enforced in some districts.  At the same time, reports of 
armed Maoists cadre holding open public meetings--including 
some with forced local participation--and stories in the 
media of armed Maoists carrying out "guerrilla training" in 
certain districts have elicited calls from various observers 
for the Maoists to disarm before negotiations. 
 
¶5.  (SBU)  Nor have the Maoists suspended their extensive 
(and apparently lucrative) practice of extortion during the 
ceasefire.  The POL/ECON section polled eight of the largest 
Nepali business houses by telephone one week after the 
ceasefire was announced; five of the eight reported having 
received extortion demands since the announcement, and the 
remaining three fully expected to hear from their "contacts" 
in the near future.  Citing the Maoists' unflagging 
fundraising activities, some of the businessmen expressed 
skepticism that the insurgents are sincere about seeking a 
peaceful resolution to the conflict. 
 
¶6.  (U)  On February 11 the National Human Rights Commission 
(NHRC) proposed a six-point code of conduct to both the GON 
and the Maoists.  Echoing some of the more recent Maoist 
demands (see below), the NHRC document called on the GON to 
repeal the Terrorist and Destructive Activities Act (which 
allows suspects to be held without charge for 60 days) and to 
order the Royal Nepal Army back to barracks.  Under the 
proposed code, the Maoists would refrain from murder, 
abduction, planting explosive devices, and extorting money. 
Neither side has responded to the NHRC proposal. 
 
-------------------------------- 
MAOIST TEAM READY; GON'S IS NOT 
-------------------------------- 
 
¶7.  (SBU)  Following quickly upon the ceasefire announcement, 
the Maoists promptly named the members of their team for 
prospective negotiations, which included two of the 
seniormost insurgent leadership (Ref A).  (Note:  A GON 
participant in the unsuccessful negotiations in 2001 noted 
that the Maoist representatives seemed to lack 
decision-making authority.  The progress of negotiations was 
thus continuously impeded by the Maoists having to "check 
back in" with their senior leadership.  End note.)  The GON, 
in contrast, after initially naming Narayan Singh Pun, 
Minister of Physical Planning and Works, as lead 
"coordinator" for talks, has not moved as swiftly to announce 
the remaining members of its roster.  For now, Pun continues 
to occupy the local news spotlight alone, reportedly 
shuttling back and forth to hammer out ground rules for 
negotiations with Maoist leaders, visiting mid-ranking Maoist 
suspects detained in Kathmandu jails, but remaining 
relatively closed-mouthed--especially in comparison to 
previous GON negotiators--about the substance of these 
discussions. 
 
¶8.  (U)  No date, venue or agenda has yet been announced for 
talks.  While the GON has not publicly announced any 
pre-conditions for negotiations, the Maoists are busily 
adding to their ever-expanding list. In a February 7 
interview with a centrist Nepali-language newspaper, Maoist 
leader Prachanda, besides demanding the RNA return to 
barracks, called for the GON to publish a list of detainees 
"and start releasing them."  A group of Maoist detainees in 
Kathmandu, meanwhile, is clamoring for the release of all 
Maoist suspects (not surprisingly); the abrogation of special 
anti-terrorism laws; and more equitable coverage in the 
state-owned media.  The GON has not formally responded to 
these demands. 
 
--------- 
COMMENT 
--------- 
 
¶9.  (SBU)  What the Maoists hope to achieve through 
negotiations; whether they are seriously re-engaging with 
political parties; whether they believe they can use dialogue 
tactically to isolate and discredit the Palace; whether 
negotiations will take place at all--such questions remain 
unclear.  Despite the numerous uncertainties that continue to 
surround efforts toward negotiations, the question of whether 
the military wing of the Maoists, represented by several 
thousand gun-toting youths across the country, would accept a 
truce imposed by its political wing appears to have been 
answered for now.  The fact that the far-flung Maoist cadre 
are observing the ceasefire with uncharacteristic discipline 
and restraint attests to the importance that their leadership 
is attaching to creating, at the very minimum, the appearance 
of "conducive conditions" for talks.  The nomination of 
political ideologue Baburam Bhattarai and top military 
tactician Ram Bahadur Thapa to the negotiating team also 
seems calculated to dispel earlier rumors of a rift between 
the military and ideological wings of the insurgency, and 
offers some hope that the Maoists, should negotiations ensue, 
will be able to speak with a single, authoritative voice. 
But while the Maoists may be serious about creating 
"conducive conditions" for negotiations--perhaps in order to 
raise public hopes for success and thereby increase the 
pressure on the GON to ensure such success--we continue to be 
skeptical that they are equally serious about actually 
reaching a negotiated settlement that stops anywhere short of 
the one-party, autocratic state espoused in their rhetoric. 
 
 
MALINOWSKI