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 000978 
 
SIPDIS 
 
AID/W FOR DCHA for RWinter, WJGarvelink, DCHA/OFDA 
for TH-Sanchez, MMarx, RThayer, DCHA/OTI for 
GGottlieb, and NSC for JDworken 
ANE/DA/GWEST ANE/SPOTS RCOHN 
MANILA FOR TOM BRENNAN AND MARIZA ROGERS 
 
E.O. 12958: N/A 
 
TAGS: OFDP
SUBJECT: MAOIST INSURGENCY IN NEPAL (SITREP ONE) 
 
REFS:  (A) STATE 69408, (B) KATHMANDU 515, AND (C) KATHMANDU 
00703 
 
¶1. This is a reporting cable only. 
 
¶2. Summary: 
A) This cable reports briefly on: significant 
events/trends of the Maoist insurgency; current 
status of activities related to the disaster 
declaration, and Mission activities in response to 
the insurgency. 
 
B) This cable contains no recommendations for 
immediate action.  These will be forthcoming from 
the Mission as further information on the 
humanitarian situation is developed. 
C) Recent aggression of the Maoists toward the 
Nepal Red Cross underscores the need for USG 
humanitarian assistance to be provided in such a 
way that the neutrality of NGOs working in Maoist 
areas is not compromised, rendering them 
ineffective. 
 
D) Mission is fully engaged in addressing the 
issues of conflict in Nepal through its recently 
approved SPO and will confer with ANE in regard to 
the need for additional resources and expert 
advice. 
 
¶3. Events: 
A) Royal Nepal Army's success in attacking a 
Maoist training camp in Lisne VDC in Rolpa where 
they claimed to have killed 548 Maoists was 
quickly followed on May 7 by losses to the Maoists 
in Gam VDC where a combined Army and Police 
outpost was overrun.  There were 123 security 
personnel (53 RNA, 40 regular police, and 30 Armed 
Police) at the post.  After the attack, 35 burned 
and unidentifiable bodies were found. Twelve 
wounded RNA, one policeman, and five Armed Police 
have bee evacuated to hospitals, and five other 
RNA and sex regular police survived the attack. 
All others are unaccounted for. No villagers have 
been found and whether they were killed, abducted 
or fled is unknown. 
 
B) Suspected Maoist insurgents set fire to a 
Pepsi-Cola truck making deliveries in Dolakha 
District on May 7.  According to Rajiv Sant, 
Managing Director for the Indian-owned Pepsi 
franchise in Nepal, three gunmen stopped the truck 
and ordered the driver, salesman and distributor 
to get out.  After robbing them, Sant said the 
gunmen told the three Pepsi employees that we 
don't want American companies here."  One of the 
gunmen then reportedly blew a whistle, at which 
point a number of young men emerged from the 
surrounding forest.  The group then drove the 
truck off, leaving the three Pepsi employees to 
walk to the next town.  The three gunmen 
meanwhile, calmly walked off into the jungle, 
according to Sant. 
 
C) Coincident with Prime Minister Deuba's visit to 
Washington and London the Maoist proposed a 
unilateral one month cease fire.  Deuba citing 
deceit on earlier occasions, rejected the overture 
by the Maoists.  Maoist sources quickly claimed 
that the cease-fire proposal was a fake and not 
penned by the movement.  This was widely 
interpreted as a face saving gesture by the 
Maoists. 
 
D) The previously declared state of emergency, due 
to expire on May 24, may be extended despite some 
opposition in parliament. The King has called a 
special session of Parliament May 23 to debate 
extension of the emergency. 
 
E) On May 12 in Rolpa, Maoists abducted district, 
Narayan Prasad Subedi, a local teacher and member 
of the Red Cross.  He was General Secretary of the 
Red Cross in Rolpa district and President of the 
teachers' association there. 
 
Trends: 
F) In addition to government officials and 
opposition political cadres who had been the 
traditional targets of the Maoists, teachers and 
other figures of authority in rural areas are 
increa 
singly singled out for attack.  Other more 
recent trends are attacks on infrastructure such 
as telecommunications and water schemes, the use 
of torture (some of which has been in front of 
victims' families), and the use of human shields 
in attacks on GON military and police positions. 
 
Comment 
G) It is unclear whether the abduction mentioned 
in (E) under paragraph (3) was because Mr. Subedi 
was a teacher or because of his position in the 
Red Cross. However, the event along with the 
attack on the Pepsi-Cola truck underscores the 
need for ensuring that USG humanitarian aid be 
provided in such a way that recipient 
organizations do not become targets of the 
Maoists. 
 
4) Disaster Declaration: 
A) The Nepal Red Cross is in the process of 
replenishing emergency stores used in previous 
responses to people affected by the Maoist 
insurgency.  At the completion of this task the 
Mission will reimburse up to $50,000 of this 
expense. 
 
B) The assessment being carried out by the Red 
Cross and promised to the Mission is being 
hampered by Maoist attacks on telecommunications 
that have made it all but impossible to 
consolidate information from individual districts 
into a coherent assessment of the overall 
situation.  ICRC is currently assisting Nepal Red 
Cross in the development of a functional 
communications system but this will take some 
time.  Meanwhile the Mission has gained approval 
from the Ambassador to fund an assessment of IDPs 
in Nepal and is rapidly moving forward to 
implement it using the services of an 
international expert with ICRC experience. 
Mission will keep Washington appraised. In 
addition to the $50,000 provided to the Embassy, 
an additional $50,000 was provided by OFDA as part 
of the disaster declaration for use for an 
assessment. 
 
C) Lack of communications, isolation of many 
Maoist affected areas, and the press embargo which 
is part of the state of emergency, combine to 
severely limit the ability of external 
organizations to confidently assess the magnitude 
of the insurgency's affect on the civilian 
population. It is hoped that a better picture can 
be developed when ICRC teams currently in the 
field return to Kathmandu next week.  The UNOCHA 
representative who was in Nepal for the last two 
weeks as part of a conflict assessment team, 
reported in a de-briefing meeting today that he 
had not found it possible to gather anything more 
than anecdotal information regarding IDPs and the 
humanitarian needs in the country. 
 
5) In regard to the conflict, to date USAID/Nepal 
has taken the following action: 
 
A)   Worked to establish a Mission Interagency 
Committee to focus on the coordinated deployment 
of individual agency resources to best assist the 
GON to resolve the conflict and restore political 
stability. The Committee has established a common 
set of goals and objectives across all agencies, 
including the military. Ambassador Malinowski is 
actively leading the USG effort. 
B)   Conducted an assessment on service delivery 
and also produced a report, "Democratic Governance 
Under Threat", which establishes a common history 
and intellectual understanding of events in Nepal. 
Copies are available from the Nepal Desk Officer. 
C)   Gained approval for a Special Strategic 
Objective (SpO) which directly addresses the 
conflict. The SpO has 4 components: 1) Employment 
generation and the provision/rehabilitation of 
basic infrastructure; 2) Support to victims of 
torture, returned combatants and internally 
displaced persons; 3) Technical assistance and 
policy dialogue to strengthen GON policy 
decisions; and 4) Short-term Local Governance 
Activities. 
D)   Established a database of information 
including maps and charts regarding the course of 
the conflict and is exploring incorporating this 
into a GIS system. 
E)   Established a Special Projects Office to 
implement the SpO and staffed it. 
Note: USAID/Nepal is hiring a GIS specialist to 
integrate data wit 
h GIS mapping systems, a USPSC 
DG/Conflict Specialist and a USPSC Manager for the 
Infrastructure Program. 
F) Mission is coordinating with other donors to 
develop a common position with the GON regarding 
corruption, and the need to structure 
interventions to reach the local level as rapidly 
as possible. The WB, ADB, and DFID are negotiating 
with the GON to establish conditions to 
"irrevocably change" the way funds are distributed 
to local bodies. The initial emphasis is on 
providing education and health services to rural 
areas. 
 
G) Under the SO5 Governance program, USAID/Nepal 
is focusing on strengthening the demand for 
services and improving accountability and 
transparency in the financial management of public 
resources. and 
 training for local elected officials, 
particularly women 
 
In addition, USAID is part of the Donors' Peace 
Support Group, and participates in various donor 
sector groups, and frequently confers with DFID, 
GTZ, DANIDA, and representatives of the Japanese 
and Australian governments on the conflict. U.S. 
diplomatic efforts are ongoing and a needs 
assessment by a military team was recently 
completed. 
 
 USAID/Nepal is working with PPC/PDC staff to look 
at additional conflict mitigation factors. 
USAID/Nepal is also planning in-depth analyses for 
new, related EG and DG strategies within the 
context of the conflict. The contact person in the 
ANE Bureau handling strategy issues is Rebecca 
Cohn. Bernadette Bundy is the Nepal desk officer. 
Azza el-Abd heads USAID/Nepal's Special Projects 
Office. 
 
MALINOWSKI