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 002076 
 
SIPDIS 
 
STATE FOR SA/INS, USAID/ANE, LONDON FOR POL/GURNEY, NSC FOR 
MILLARD 
 
E.O. 12958: N/A 
TAGS: PTER PGOV PREL NP
SUBJECT: NEPAL: MAOIST ACTIVITY OCTOBER 18 - OCTOBER 24 
 
REF: (A) KATHMANDU 2048 
 
     (B) KATHMANDU 2020 
     (C) KATHMANDU 2042 
     (D) KATHMANUD 2022 
     (E) KATHMANDU 2040 
 
 
Summary 
------- 
¶1.  After a relatively quiet Dasain holiday, the period of 
October 18-24 has been marked with increased violence. 
According to local press reports, 57 suspected Maoists, 3 
security personnel and 5 civilians were killed during this 
week's clashes around the country.  Despite the Maoists' 
press release of October 21, which announced a policy shift 
away from indiscriminate murder and destruction of 
infrastructure, reports from the far-western and mid-western 
regions of Nepal attests to continued extortion, kidnappings 
and murder of local villagers and businessmen.  Colgate- 
Palmolive (Nepal), a 100 percent owned and operated Indian 
investment has temporarily suspended operations.  Local 
media reports reference Maoist extortion and an on-going 
labor dispute as the reason for temporary closure. 
 
¶2.  The Government of Nepal (GON), in an effort to better 
manage the economic impact of the insurgency, announced the 
creation of a tourism crisis management cell.  Maoists in 
the Makalu and Dolpa areas have standardized their taxing of 
foreign nationals who visit the area.  The GON announced 
bans on certain cultural activities associated with the 
local Tihar "festival of lights" holiday for the first time, 
citing security reasons.  End Summary. 
 
Words Vs. Deeds of the Maoists 
------------------------------ 
¶3.  On October 21, Prachanda, the supreme Maoist leader, 
issued a press release citing a major shift in his party's 
policies.  (Ref A) The statement indicated that the Maoists 
would downscale the intensity of their violence and 
destruction, and cease the destruction of government 
buildings, telecom towers and other infrastructure.  NGOs 
and INGOs except those receiving U.S. funding would be 
allowed to operate.  "Common people" would be allowed to 
make voluntary donations to the Maoists, while big 
businesses would be assessed a "tax." 
 
¶4.  On the morning of October 22, a group of Maoists 
exploded a pressure cooker bomb at a local government office 
in Bhaktapur (located in Kathmandu Valley), completely 
destroying the building and damaging property valued at an 
estimated NRs. 400,000 (equivalent USD 5,405).  Just one day 
after the pronouncement, moreover, Maoist insurgents 
brutally murdered five civilians in different parts of the 
country. 
 
Colgate-Palmolive Factory Closes 
-------------------------------- 
¶5.  Colgate-Palmolive (Nepal), a 100 percent owned and 
operated Indian investment, announced on October 19 that it 
would temporarily suspend operations for seven business days 
citing the "fragile security situation" and low demand as 
the major factors.  (Refs B and C) This announcement 
coincides with media reports indicating that Colgate- 
Palmolive received an extortion demand from the Maoists amid 
an on-going labor dispute with the plant's local employees. 
 
Government Branch Offices Shift 
------------------------------- 
¶6.  Local press reports indicate that many government branch 
offices have shifted to district headquarters, following 
heightened Maoist activities.  Most police posts and 
regional police offices also are reported to have moved as a 
result of the security situation. 
 
More incidents of extortions and kidnapping 
------------------------------------------- 
¶7.  Maoists plan to extort NRs. 10 million from businesses 
in Gulmi district (located in southwest Nepal).  Some 48 
businessmen are reported to have received the extortion 
letter, which demands "donations" in a range of NRs. 50,000 
to 500,000 (equivalent USD 676 to USD 6,757). 
 
¶8.  On October 17, a group of armed Maoists abducted 23 
merchants in Accham District (located in far-west Nepal), 
stating that the traders were "unfriendly to their party;" 
authorities have no indication where they are being held. 
One businessman who escaped indicated that he believed the 
group was abducted for failing to pay extortion demands. 
 
Maoists destroy local businesses and disrupt food supply 
--------------------------------------------- -------------- 
¶9.  Around 100 armed Maoists destroyed a three-decades-old 
government sheep farm located in Nuwakot district (located 
in central Nepal) on October 15, leaving the local employees 
jobless.  The Maoists killed sheep on the farm and destroyed 
the entire infrastructure, including government offices, 
sheep pens and farm buildings. 
 
¶10.  Reports from Kailali District (located in far-west 
Nepal) indicate that the timber industry has also been 
affected by the insurgency.  Many sawmills have been forced 
to close due to low timber supply.  Those that remain 
operational cite "double taxation" by the Maoists as a huge 
financial burden.  Government security personnel and the 
Maoist insurgents restrict collection of wood from the 
forest, resulting in illegal smuggling of timber to domestic 
wood and furniture industries. 
 
¶11.  Some farmers reportedly are deciding not to harvest 
their rice crops, citing both low demand from food traders 
and levies by Maoists on farmers owning more than 5 bighas 
(about 8 acres).  Maoists are demanding that farmers pay 
NRs. 50,000 (equivalent USD 676) as a "donation."  Food 
traders indicate they are not purchasing rice because they 
have been warned by the Maoists not to transport food 
products for business.  In addition, people in remote 
districts of Achham, Bajhang and Bajura districts are facing 
food deficits because government contractors are unwilling 
to transport subsidized grain to these districts in the far- 
west because of security concerns. 
 
Maoists Target the Young and Old: Compulsory training 
--------------------------------------------- -------- 
¶12.  In Achham District (located in far-western Nepal), the 
Maoists have initiated a new campaign entitled "All are 
Maoists including children and elderly."  The propaganda 
campaign involves children as young as age 10 and the 
elderly in physical and doctrinal training.  Reports 
indicate that individuals are forced to wear a cap, to carry 
the Maoist flag and to chant pro-Maoist slogans during 16 
hours of marching around town. 
 
Youths Kidnapped by Maoists 
--------------------------- 
¶13.  Armed Maoists reportedly kidnapped 13 young adults 
between the ages of 18 to 25 from Beltakua village in Dang 
District (located in mid-western Nepal).  According to local 
residents, the youths were awaken up the evening of October 
17, assembled in a nearby open area, handcuffed and taken 
north. 
 
Schools in the Middle 
--------------------- 
¶14.  The United Nations Children's Fund (UNICEF) condemned 
the October 13 clash between Maoists and security personnel 
that occurred on the grounds of Sharada Higher Secondary 
School in Doti (located in far-western Nepal).  Carol 
Bellamy, executive director of UNICEF, called for a code of 
conduct between all parties that included no weaponson 
school grounds, no recruitment of children, no political 
activities in schools, no harassment of teachers or 
students, and no disruption of school activities.  On 
October 13, the Maoists had organized a program at the 
school and reportedly threatened students if they did not 
participate.  Security forces who stormed the school and 
opened fire explained that they believed that all the 
assembled group were Maoists.  Four students were killed in 
the clash.  In the aftermath, nearly twenty schools have 
closed in Doti, and many parents have chosen not to send 
their children to schools that have remained opened.  The 
National Human Rights Commission has initiated an 
investigation into the incident.  Meanwhile, on October 20, 
Maoists padlocked more than a hundred schools in Syangja 
district (located in western Nepal). 
 
¶15.  Nepal's three largest teachers organizations announced 
a joint protest program against the increasing incidents of 
murder, arrest and abduction of teachers following the 
breaking of the cease-fire on August 27.  Reports indicate 
that since the beginning of the Maoist insurgency, 141 
teachers have been killed.  Since the Maoists broke off the 
cease-fire, five teachers have been murdered and three 
teachers kidnapped by the Maoists.  The teachers' group 
plans to submit demands for security and increased salary 
and benefits to the District Education Offices on October 
¶31.  If their demands are not met, the teachers plan to 
organize a sit-in at the district headquarters on November 
¶14. 
 
Asian Development Bank remains committed 
---------------------------------------- 
¶16.  John Samy, deputy director general of the South Asian 
Regional Department of the Asian Development Bank (ADB), 
reiterated during a trip to Nepal on October 17 that ADB 
remains committed to assisting Nepal on development and 
poverty reduction through the crisis period.  Samy 
underscored the need for international donors to remain 
engaged during "Nepal's critical juncture."  ADB is in the 
process of creating a new Country Strategy and Programme for 
Nepal which should be completed in 2004. 
 
Armed Police Force takes over Farmers' land 
------------------------------------------- 
¶17.  Farmers demanded the return of land (about 13 acres) 
that reportedly was taken over by the Armed Police Force's 
Neelbarahl Battalion about three months ago, leaving some 
100 farmers landless.  The land encompasses four village 
development areas within the Kathmandu district. 
 
Maoists abduct and release British Gurkha Army Officers 
--------------------------------------------- --------- 
¶18.  On October 19, Maoists kidnapped four British Gurkha 
Officers, including a British Army Lieutenant Colonel, about 
300 km west of Kathmandu in the remote Lekhani Village 
Development Committee in Baglung District. (Refs D and E). 
The British Gurkhas were on a recruitment drive in the area, 
when their camp was surrounded on October 19.  Forty hours 
after their abduction, the officers were released.  The 
Maoists have been opposing the recruitment of Nepali young 
men into the British and Indian armies.  However, this is 
the first time that the Maoists have detained a foreign 
recruiter. 
 
Government restricts political and festival activities 
--------------------------------------------- -- 
¶19.  On October 22, the Kathmandu District Administration 
announced a ban on protest rallies, picketing and hunger 
strikes within the capital city.  On October 23, local 
governments within the Kathmandu Valley announced a ban on 
cultural activities associated with the Tihar festival of 
lights from October 23 - 27, citing security reasons.  This 
is the first time that these cultural activities have been 
banned. 
 
Maoists levy "war tax" and other forced "donations" 
--------------------------------------------- ------ 
¶20.  Reports of Maoists collecting a NRs. 5000 (equivalent 
USD 68) war tax from foreign tourists in the Makalu-Barun 
area have surfaced. (Located east of Mount Everest, Makalu 
is the fifth highest mountain in the world.)  The tax is 
five times the amount of the government's entry fee into the 
area.  However, fee collection on the government side ceased 
over a year ago when the government office was closed for 
security reasons.  The Maoists have taken over the 
government offices and established a post there.  Reports 
indicate that the Maoists collect fees from tourists at 
gunpoint and supply receipts in return. 
¶21.  In another area, reports indicate that Maoists have 
begun collecting forced, but negotiated, "donations" from 
tourists in the northern area of Dolpa.  Security personnel 
indicate that Maoists usually request USD 100, but tourists 
usually negotiate the figure down to NRs. 1000 (equivalent 
USD 14). 
 
Tourism:  Crisis Management Cell Established 
-------------------------------------------- 
¶22.  This week the GON developed a Crisis Management Cell to 
deal with problems within the tourism industry.  The 
Minister of Culture, Tourism and Civil Aviation will head 
this group.  Representatives include the Ministries of Home 
Affairs, Health, Information and Communications, as well as 
the Royal Nepalese Army, Armed Police Force, Nepal Police 
and private sector tourism entrepreneurs. 
 
Clashes between Security Forces and Maoists 
------------------------------------------- 
¶23.  News reports indicate that 57 suspected Maoists, 3 
security personnel and 5 civilians were killed during this 
week's clashes around the country. Eight security personnel 
were seriously injured on October 20 and one was killed when 
their Kathmandu-bound military vehicle ran over a landmine. 
 
BOGGS