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 000707 
 
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: PINS PTER CASC PGOV NP
SUBJECT: UPDATE ON NEPAL'S MAOIST INSURGENCY, APRIL 11-18 
 
REFERENCE:  (A) KATHMANDU 0692 
            (B) KATHMANDU 0677 
 
SUMMARY 
------- 
 
¶1.  On April 16 the Government of Nepal (GON) finally 
announced its six-member team for peace talks with the 
Maoists (Ref A). Baburam Bhattarai and the Maoist 
negotiating team met with Narayan Singh Pun, government- 
appointed peace talks coordinator, for "goodwill" talks on 
April 13, following the release from jail of two Maoist 
Central Committee Members.  Minister Pun said other Central 
Committee Members still imprisoned would be released as 
peace talks progressed.  In a series of meetings with the 
business community, Maoist ideologue Baburam Bhattarai sent 
conflicting messages about his party's economic policies. 
Maoists reportedly abducted ten people and continue to 
extort money.  The All Nepal National Independent Students 
Union-Revolutionary (ANNISU-R), the Maoist-affiliated 
students' group, protesting the hike in gasoline prices, 
went on a rampage on April 15, setting fires and destroying 
documents.  The militant students were also among eight 
student groups who called for an educational strike, or 
bandh, on April 17, in which schools throughout the nation 
were forced to close (Ref B).  Victims of the Maoist 
insurgency issued a joint statement on April 13 demanding 
that the GON punish Maoist criminals, and accusing the GON 
of giving undue respect to Maoist leaders.  They warned of 
their own revolution if they are denied a place in the peace 
talks.  End Summary. 
 
GON ANNOUNCES PEACE TALKS TEAM; STILL NO DATE 
--------------------------------------------- - 
 
¶2.  The GON announced on April 16 that Badri Prasad Mandal, 
the Deputy Prime Minister, will head the government's 
negotiating team for peace talks with the Maoists (Ref A). 
Narayan Singh Pun, Minister of Physical Planning and Works, 
who had been coordinating the peace process since the 
declaration of the ceasefire on January 29, will stay on as 
a team member.  The four other members are Upendra Devkota, 
Minister for Health, Science and Technology; Ramesh Nath 
Pandey, Minister for Information and Communication; Kamal 
Chaulagain, Minister of Labor and Transport Management; and 
Anuradha Koirala, Assistant Minister for Women, Children and 
Social Welfare.  A vernacular publication has reported that 
the Royal Palace has appointed a Royal Nepal Army (RNA) 
intelligence committee to coordinate the peace talks. 
Quoting an unnamed source, the publication said the 
committee had already met several times to advise the GON. 
 
¶3.  Reactions from the Maoists and political parties to the 
formation of the government's team was mixed.  Maoist talk 
team leader Baburam Bhattarai reportedly welcomed the 
announcement, and declared that the Maoists were ready to 
hold dialogue with the King if necessary.  Krishna Bahadur 
Mahara, spokesman and member of the Maoist negotiating team, 
told the local press that the announcement was 
"commendable," but again criticized the length of time the 
GON had taken to form the team.  Arjun Narsingh KC, 
spokesman for the Nepali Congress (NC), said the team was 
comprised of members of the illegitimate government, and 
Pradeep Nepal, spokesperson for the Communist Part of Nepal- 
United Marxist Leninist (CPN-UML), expressed concern that 
the peace talks agenda be made public. 
 
¶4.  Mahara reportedly told the local press on April 16 that 
the Maoists want peace talks to be completed within the next 
few months.  He warned against any delay by the GON, and 
threatened that the insurgents would return to the jungle if 
the GON tried to prolong the ceasefire without holding peace 
talks.  Minister Pun countered that it is impossible to set 
a deadline for the conclusion of the peace talks, but 
declared that the process will "take a long time." 
GON RELEASES MAOIST LEADERS 
--------------------------- 
¶5.  The GON satisfied another of the demands made by the 
Maoists and released two of their Central Committee Members 
from military custody on April 13.  According to press 
reports, the two leaders, Dhoj Khadga and Rekha Sharma, were 
flown to Kathmandu in Minister Pun's private helicopter. 
The Maoists had demanded the immediate release of a total of 
five Central Committee Members as a precondition to peace 
talks.  Mahara said that while the Maoists were happy with 
the development, they would continue to press for the 
release of the remaining three leaders.  Minister Pun 
reportedly has said the other releases would come gradually 
as the peace talks progressed. 
 
GOODWILL TALKS HELD 
------------------- 
 
¶6.  Following the release of two of its senior level 
leaders, the Maoist negotiating team met with Minister Pun 
on April 13 for "goodwill" talks.  According to press 
reports, the talks focused on implementing the code of 
conduct.  While Pun termed the talks "official," Krishna 
Bahadur Mahara, Maoist spokesman, denied the discussions 
were official, referring to them as "goodwill" talks. 
Despite the disagreement, Pun said the talks were going 
well. 
 
BHATTARAI'S BUSINESS BLUNDERS 
----------------------------- 
 
¶7.  Baburam Bhattarai shifted his public relations focus 
from political parties to the business community.  His 
conflicting statements, however, left many businessmen 
wondering what the Maoist ideologue really meant.  Bhattarai 
met with representatives of over sixteen business 
associations on April 14.  He reportedly declared that the 
Maoists want to free Nepal's industries from the "shackles 
of Indian monopoly," and encouraged the audience to be self- 
sufficient instead of being dependent on foreign aid.  At a 
subsequent meeting with other business leaders, however, 
Bhattarai contradicted those nationalistic statements, 
saying that the Maoists support a free and open market. 
Bhattarai's doublespeak continued, with the senior Maoist 
leader saying that his party's economic policy calls for an 
open market in all sectors, except for those that should be 
state controlled.  While some business leaders have remarked 
that Bhattarai appears to be flexible with his economic 
ideas, others see this as another case of the Maoists not 
knowing what they want or how to achieve it. 
 
MAOISTS VIOLATE CEASEFIRE 
------------------------- 
 
¶8.  Maoists reportedly abducted ten people from three 
different districts in violation of the Code of Conduct 
established on March 13.  On April 14 the insurgents 
abducted eight people from central Kavre District.  One 
managed to escape.  Maoists reportedly have accepted 
responsibility, claiming that the victims had been posing as 
Maoists and extorting money from villagers.  The district 
level leader refused to say where the men were taken.  A 
former Village Development Committee Chairman too was 
abducted by Maoists in southern Parsa District, as well as a 
merchant from Mohattari District.  Violence and extortion by 
the Maoists apparently has continued despite the ceasefire 
and code of conduct. 
 
ANNISU-R RAGE FUELS PROTEST FIRES 
--------------------------------- 
 
¶9.  The All Nepal National Independent Students Union- 
Revolutionary (ANNISU-R), the Maoist-affiliated students' 
group, along with other politically affiliated student 
groups, went on a rampage on April 15, setting fires and 
destroying documents at various government offices 
throughout Kathmandu to protest upcoming college-level 
student body elections.  The militant student group had 
demanded the postponement of the elections.  (Note.  Due to 
the violent protests the elections, scheduled for April 23, 
have now been postponed.  The protests continue, however, 
with some student groups now demonstrating against the 
postponement.  End Note). 
 
¶10.  ANNISU-R is among eight student groups who called for 
an educational strike, or bandh, on April 17, which forced 
the closure of schools throughout the country (Ref B). 
Several other upcoming bandhs are scheduled for April 20, 
23, 28 and 29.  The nationwide strikes are meant to force 
the closure of schools, businesses and transportation. 
 
VICTIMS DEMAND JUSTICE 
---------------------- 
 
¶11.  Local groups representing victims of the Maoist 
insurgency issued a joint statement on April 13 demanding 
that the GON punish Maoists guilty of crimes, and accusing 
the GON of giving undue respect to Maoist leaders.  Calling 
Bhattarai a "leader of the terrorist group," representatives 
said that the GON has forgotten that Bhattarai and his 
fellow cadres have tortured and killed many people for the 
past seven years.  Representatives from the groups warned 
that they would start their own revolution if the GON and 
the Maoists dismissed their concerns.  The groups are 
insisting on representation at the peace talks, legal action 
against those guilty of crimes, rehabilitation programs and 
compensation for victims of crimes committed by the Maoists. 
 
MALINOWSKI