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

UNCLAS SECTION 01 OF 04 KATHMANDU 000515 
 
SIPDIS 
 
STATE FOR SA/INS AND DS/IP/NEA 
STATE ALSO PLEASE PASS USAID/DCHA/OFDA 
STATE ALSO PLEASE PASS PEACE CORPS HQ 
USAID FOR ANE/AA GORDON WEST AND JIM BEVER 
MANILA FOR USAID/DCHA/OFDA 
LONDON FOR POL/RIEDEL 
TREASURY FOR GENERAL COUNSEL/DAUFHAUSER AND DAS JZARATE 
TREASURY ALSO FOR OFAC/RNEWCOMB AND TASK FORCE ON TERRORIST 
FINANCING 
JUSTICE FOR OFFICE OF THE DEPUTY ATTORNEY GENERAL/DLAUFMAN 
 
E.O. 12958: N/A 
TAGS: PHUM PTER CASC PGOV NP IN
SUBJECT: UPDATE ON NEPAL'S MAOIST INSURGENCY, MARCH 15-21 
 
REFERENCE:  (A)  KATHMANDU 0471 
 
            (B)  KATHMANDU 0145 
SUMMARY 
------- 
 
¶1.  Prime Minister Lokendra Bahadur Chand told the local 
press that peace talks would likely start in April, while 
Dinanath Sharma, senior-level Maoist leader and member of 
the Maoist negotiating team, said he was ready to begin 
talks at any time.  Narayan Singh Pun, Minister of Physical 
Planning and Works, and government-appointed peace talks 
coordinator, expressed confidence that the peace talks would 
succeed.  Minister Pun also reasserted that Maoist leaders 
would not be arrested during peace talks.  Twenty more 
Maoists were released from various jails throughout the 
country.  Maoists reportedly have abducted two Nepali 
Congress (Democratic) workers in Pyuthan District, accusing 
them of being informants, while a splinter group of the 
insurgents has stepped up extortion demands from teachers in 
Sankhuwasabha District.  Maoists in Kaski District 
reportedly are still widely engaged in recruiting, and are 
storing weapons in the jungle and other hideouts, promising 
a "vicious war" if talks failed.  The All Nepal National 
Independent Students' Union-Revolutionary (ANNISU-R) 
unlocked college campuses on March 16 after Tribhuvan 
University (TU) reportedly agreed to fulfill their demands 
(Ref A), but expressed anger at the Home Ministry's press 
statement issued on March 16 that Purna Poudel, General 
Secretary of ANNISU-R, was not in custody.  Devendra 
 
SIPDIS 
Parajuli, President of ANNISU-R, accused the GON of lying 
about Poudel's whereabouts, and reportedly accused the 
security personnel of murdering ANNISU-R cadres in custody. 
ANNISU-R promised a "strong action" if their cadres were not 
released.  The GON announced on March 16 that it plans to 
reconstruct infrastructure destroyed during the Maoist 
insurgency, and rehabilitate displaced people, particularly 
children and widows.  The families of five youths mistakenly 
killed in Nuwakot District by security forces in November 
2002 (Ref B) are still waiting to receive compensation 
promised to them by the GON. 
 
POSSIBLE START DATE FOR PEACE TALKS 
----------------------------------- 
 
¶2.  Prime Minister Lokendra Bahadur Chand told the local 
press on March 15 that peace talks would likely start in 
April.  The Prime Minister said that the Maoists had 
requested three weeks to inform all of their cadres of the 
March 13 signing of the code of conduct. 
 
¶3.  Dinanath Sharma, senior-level Maoist leader and member 
of the Maoist negotiating team, told reporters on March 16 
that the focus of the peace talks should be on how much the 
participants are willing to sacrifice and not how much they 
want to gain.  Sharma also promised that more senior Maoists 
would appear in public if the GON created a conducive 
environment, declaring that they were ready to begin talks. 
 
¶4.  Narayan Singh Pun, Minister of Physical Planning and 
Works and government-appointed peace talks coordinator, 
expressed confidence on March 16 that the peace talks would 
succeed, and said the GON was "on the right track." 
Minister Pun also said that, because restoring the economy 
of the country was vital to ensure that democracy 
flourished, economics would be one of the prime topics of 
the peace talks. 
 
GON READY TO ACT ALONE 
----------------------- 
 
¶5.  Prime Minister Chand announced on March 15 that the GON 
would try again to involve the major political parties in 
peace talks, but that the Government of Nepal (GON) was 
ready to move ahead on its own if necessary.  Chand 
reportedly dismissed the labeling of his government as 
illegitimate, and expressed concern that the major political 
parties might be trying to disrupt the peace process.  Chand 
proclaimed that the GON was committed to maintaining peace 
and accused the main parties of boycotting the peace 
process.  (Note:  The major parties boycotted, for the 
second time, an all-party meeting called by Prime Minister 
Chand on March 11.  They had boycotted a previous all-party 
meeting to which they were invited by Chand on February 17. 
End note.) 
 
PUN SAYS NO ARRESTS OF MAOIST LEADERS 
------------------------------------- 
 
¶6.  Minister Pun said on March 19 that Maoist leaders would 
not be arrested during peace talks.  Pun said the code of 
conduct guaranteed freedom of movement by Maoist negotiators 
and that the GON was committed to honoring the code. 
 
¶7.  Five Maoists were re-arrested shortly after their 
release on March 16 in Jhapa District.  The detainees had 
been in custody for three months.  The Chief District 
Officer (CDO) said he was aware of their re-arrest but did 
not know where they had been taken.  Two ANNISU-R cadres 
were arrested on March 14 in Surkhet District while 
attending an organizational meeting.  Devendra Parajuli, 
President of ANNISU-R, said the arrests were a violation of 
the code of conduct. 
 
¶8.  In Salyan District, thirteen Maoists were released from 
custody on March 18.  Security officials reportedly released 
them to help generate support for the peace process.  Three 
Maoists in Baglung District, including a journalist and a 
teacher, and three from Sarlahi District were also released 
this week.  A senior-level Maoist arrested in Damauli 
District by army personnel a week after the announcement of 
the ceasefire was released on March 20. 
 
MAOIST CADRES IGNORE CODE OF CONDUCT 
------------------------------------ 
 
¶9.  Maoists reportedly have abducted two Nepali Congress 
(Democratic) workers in Pyuthan District on March 19. The 
insurgents have accused them of being informants for 
security forces prior to the ceasefire. 
 
¶10.  The Maoist affiliated Kirant Worker's Party (KWP) 
apparently has shunned the code of conduct guidelines and 
reportedly are extorting money from school teachers in 
Sankhuwasabha District.  The KWP activists allegedly are 
armed and visiting schools demanding portions of the 
teachers' salaries. 
 
¶11.  Locals in west-central Baglung District are still 
unable to return home because the Maoists have not 
relinquished control of their land even after the ceasefire. 
According to local press accounts, over a hundred people 
have been displaced throughout the district after the 
insurgents seized their land, some of which was taken after 
the announcement of the ceasefire.  Maoist leaders in the 
eastern district of Ilam reportedly are asking people to 
return to their homes.  Many of the villagers have stayed 
away despite the ceasefire, however, out of fear they will 
be forced again by Maoists to make monetary contributions. 
The insurgents have apparently told the villagers it was 
safe for them to return and had nothing to fear if they did 
not take any action against the Maoists. 
 
¶12.  Local journalists met with Maoists in the central hill 
district of Kaski on March 18 and reported that the 
insurgents are still widely engaged in recruiting, and are 
storing weapons in the jungle and other hideouts.  The 
Maoists have also shunned offers of food by the "feudal 
rulers and imperialists" and allegedly have said they do not 
accept these acts of "so-called cooperation" by the 
government.  The district leader also warned that if the 
talks failed there would be a vicious war. 
 
¶13.  Maoists reportedly issued a statement on March 15 
demanding that the GON supply food to villagers in Baglung 
District.  The food depots there are empty due to earlier 
raids by the insurgents, and many people throughout the 
district reportedly are facing a severe food crisis.  The 
GON already has been supplying rice. 
 
ANNISU-R UNLOCKS COLLEGES 
------------------------- 
 
¶14.  The All Nepal National Independent Students' Union- 
Revolutionary (ANNISU-R) unlocked college campuses on March 
16 after Tribhuvan University (TU) reportedly agreed to 
fulfill their demands, which included the release of all 
imprisoned students; the release of information on the 
whereabouts of Purna Poudel, General Secretary of ANNISU-R; 
an immediate end to arrests of pro-Maoist students; a ban on 
security forces inside campuses; and the admission of pro- 
Maoist students to government-run universities. 
The militant student wing of the Maoists had padlocked 
branches throughout the country of government-run Tribhuvan 
University since March 9 (Ref A). 
 
¶15.  ANNISU-R cadres reacted angrily to the Home Ministry's 
press statement issued on March 16 that Purna Poudel, 
General Secretary of ANNISU-R, was not in custody, nor were 
there any records of him being detained.  Devendra Parajuli, 
President of ANNISU-R, held a press conference on March 19 
and declared that the GON was lying about Poudel's 
whereabouts, and that army and police personnel had arrested 
Poudel on April 26, 2002.  Parajuli also reportedly accused 
security personnel of murdering ANNISU-R cadres in custody. 
Poudel insisted that the GON reveal the whereabouts of all 
its missing cadres and release them or face a "strong 
movement against the government." 
 
RECONSTRUCTION AND REHABILITATION PLANS 
--------------------------------------- 
 
¶16.  On March 14 Kulchandra Gautam, Assistant Secretary 
General of the United Nations (UN) and Deputy Executive of 
UNICEF, said in Kathmandu that the UN could play a pivotal 
role in the reconstruction of Nepal once the current 
conflict is resolved.  Gautam said that there was much 
sympathy within the international community for Nepal and 
that many governments would be agreeable to launch 
humanitarian and reconstructive programs for the regions hit 
hardest by the insurgency. 
 
¶17.  The GON announced on March 16 that it plans to 
reconstruct infrastructure destroyed during the Maoist 
insurgency and rehabilitate displaced people.  The National 
Planning Commission (NCP) said priority would be given to 
district headquarters, bridges, airports, school buildings, 
health clinics, road repair, and communication systems.  Job 
training and shelter would also be available for those 
displaced as a result of the insurgency.  The GON's figures 
show that almost three thousand people have been displaced, 
but many human rights organizations claim the number is much 
higher.  There is no date set for when these programs will 
begin. 
 
¶18.  The GON announced a rehabilitation program on March 19 
for over one thousand children in the mid and far western 
districts.  The program is aimed at helping those children 
affected by the insurgency as well as women who were 
widowed.  Under the program, the children would receive free 
education, lodging and food while the widows would have the 
opportunity to obtain interest-free loans for start-up 
businesses.  Critics of the program, however, have deemed it 
as inadequate and limited to only a handful of insurgency 
victims. 
 
¶19.  In direct contrast to past statements of party 
objectives, Krishna Bahadur Mahara, member of the Maoist 
negotiation team, said on March 19 that the economy is the 
basic foundation of the country and that it was important to 
develop a free market economy.  Mahara said the business 
community has many troubles that need to be solved before 
Nepal's economy can prosper, and his party has developed a 
seventy-five-point plan.  No details of this plan have been 
provided.  Maoists traditionally have discouraged private 
sector growth and made numerous threats against foreign 
businesses and investors. 
 
GON SLOW WITH COMPENSATION 
-------------------------- 
 
¶20.  The families of five youths mistakenly killed in 
Nuwakot District by security forces in November 2002 (Ref B) 
are still waiting to receive compensation promised to them 
by the GON.  Despite frequent visits to the District 
Administration Office (DAO) the families have been sent away 
repeatedly empty-handed.  The Chief of the DAO said he has 
not received the money from the GON, but would give it to 
the families as soon as he did. 
 
MALINOWSKI