NEPAL: UPDATE ON MAOIST ACTIVITIES, NOV 30-DEC 06

UNCLAS SECTION 01 OF 03 KATHMANDU 002326

SIPDIS

STATE FOR SA/INS AND DS/IP/NEA
STATE ALSO PLEASE PASS USAID/DCHA/OFDA
USAID FOR ANE/AA GORDON WEST AND JIM BEVER
MANILA FOR USAID/DCHA/OFDA
LONDON FOR POL/REIDEL
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

SENSITIVE

E.O 12958: N/A
TAGS: PTER PHUM CASC PGOV IN NP
SUBJECT: NEPAL: UPDATE ON MAOIST ACTIVITIES, NOV 30-DEC 06

REF: (A) KATHMANDU 2301
(B) KATHMANDU 2316
(C) KATHMANDU 2169


1. (U) Summary: This week in Nepal, armed assailants
attacked a Joint Secretary at a public event in Kathmandu;
the army blamed political appointees for poor intelligence
capabilities; Maoists destroyed three Village Development
Committee buildings in Gulmi district, leaving only seven
intact; and a development arm of the government announced
that it would not fund projects in a Maoist-affected area
due to security concerns. India stepped up the pressure on
Maoists, and pledged to cooperate with Nepali border guards
against terrorism and transnational crime. NGO workers
escaped injury in a Maoist attack in southern Siraha
district. Villagers who have abandoned their homes are
ignoring Maoist appeals to return. The GON released
information about recovery efforts in Jumla, estimates of
airport damage and Maoist casualty figures. End summary.

ARMED ASSAILANTS ATTACK JOINT SECRETARY
--------------


2. (U) Two assailants threatened Joint Secretary for
Education Yuba Raj Pandey in broad daylight after storming
an afternoon discussion of the Maoist-organized educational
strike (ref A). The assailants pointed a pistol at the
Joint Secretary and smeared his face with black paint, then
waved the gun at other participants, including teachers'
organizations, student organizations and journalists, before
fleeing the scene, chanting Maoist slogans.

STRONGER RNA TURNS ATTENTION TO INTELLIGENCE
--------------


3. (SBU) Royal Nepal Army (RNA) officials claim, with some
exaggeration, that more competent technicians and better-
trained flight crews together with recently acquired
helicopters, arms and communication equipment are making
their forces "stronger by the day." However, in addition to
"excellent" local-level intelligence networks, the army says
it must develop an active central intelligence agency in
order to operate efficiently against the Maoists. The RNA
put the blame for current poor intelligence on an excessive
number of political appointees in the ranks of the National
Investigation Department, Nepal's national intelligence
service, under the Home Ministry.

ONLY SEVEN VDCs REMAIN IN DEVASTATED GULMI DISTRICT
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4. (U) With the recent destruction of three more Village
Development Committee (VDC) buildings in Gulmi, only seven
of the central district's 79 VDCs remain intact. Maoist
destruction of the other 72 VDCs has prompted government
employees, including health workers, to move to the district
headquarters, and reportedly has driven an increasing number
of boys and girls from their village homes to avoid being
used as human shields by the insurgents. Although some
health workers have been providing services in the field,
transportation of medicine and equipment is difficult, and
most villagers have no access to health care of any kind.

NO DEVELOPMENT IN RUKUM
--------------


5. (U) The government's Remote Area Development Committee
(RADC) has halted all development projects in Rukum (in west
central Nepal) due to security concerns. Even those that are
nearing completion after four years of work and millions of
rupees of investment are being abandoned. According to the
RADC, since 2.8 million rupees allocated for Rukum last year
could not be spent due to adverse security conditions, the
committee has elected not to allocate more funding for the
district. The RADC is also discouraging foreign investors
from funding development projects there.

INDIA TURNS UP THE HEAT
--------------


6. (U) Nepalese and Indian border officials meeting in
Baharaich, India this week reportedly agreed to cooperate in
controlling terrorism and other transnational crimes such as
trafficking in persons and smuggling. Officials also
pledged to cooperate in cross-border exchange of prisoners.


7. (U) Pressure by the GOI reportedly has forced an
estimated 200 members of the All India Nepal Unity Society
(AINUS) to leave Indian and move to Nepal's central Rolpa
district. After the GOI banned AINUS for supporting the
Maoists and handed over to the GON three of the
organization's leaders, members of the group fled to Nepal
to avoid arrest. According to press reports, the AINUS
members are being trained by the Maoists in military skills.

NGO WORKERS UNINJURED IN SIRAHA ATTACK
--------------


8. (U) Approximately 10-15 Nepali workers from Save the
Children/US, CARE and Nepal Family Health Program (NFHP)
were in Lahan, southern Siraha district for a conference
during Wednesday night's attack by Maoist insurgents (ref
B). The NGO workers remained inside their hotel when they
heard gunfire outside. NFHP reported to USAID that security
forces entered the hotel at about midnight, rounded up all
the guests and took them to another location "for their own
protection." None of the workers was harmed in the
incident, and all were later released.


9. (U) Maoists destroyed police offices, forestry offices,
three banks and the offices of the Regional Road Department
in the attack, which came just two days after the insurgents
announced plans to stop attacks on infrastructure.

VILLAGERS LEAVING SALYAN DISTRICT
--------------


10. (U) Increasing numbers of villagers are leaving Salyan
District, declared by the Home Ministry to be "the third
most fragile" after Rolpa and Rukum, according to press
reports from the district. Hundreds of local residents
reportedly visit the district headquarters every day, to
obtain an official letter allowing them to travel out of the
midwestern district.


11. (U) Fleeing villagers have stated that they are living
in constant fear of the insurgents, and that tight
restrictions by government forces on food have made the
situation in the district worse. Maoists reportedly
purchased all the dry food in the district's four major
markets on one day three months ago, sparking controls by
security personnel on the importation of food into the
district.


12. (U) Meanwhile, villagers taking shelter in Musikot,
headquarters of midwestern Rukum district, report that
Maoists have urged them publicly to return to their homes in
the countryside. None of the displaced villagers has
returned, despite the insurgents' appeal--and despite a
reported warning to one of the villagers that he would be
killed in the crossfire when the Maoists attack the district
capital--due to belief that the call to return is a ploy to
"trap" the local residents back into Maoist control.

GON ESTIMATES AIRPORT DAMAGE AT 270 MILLION NRS
-------------- ---


13. (U) According to a December 4 press release by the
Ministry of Culture, Tourism and Civil Aviation, the
reconstruction of 14 airports damaged by Maoist attacks will
cost the GON 270 million Nrs (3.5 million USD). Nine of the
fourteen airports are functioning at a reduced capacity
following preliminary repairs. All fourteen airports were
damaged in the last year.

RECOVERY SLOW AFTER MAOIST ATTACKS
--------------


14. (U) The National Human Rights Commission (NHRC) reported
on November 30 that the local school, hospital and
government offices in Khalanga, the capital of western Jumla
district, are still closed two weeks after a major Maoist
attack (ref C). According to the NHRC, Maoists looted
approximately 1.5 million Nrs (190,000 USD) worth of
medicine from the hospital, which is now is running out of
supplies. The NHRC also reported that local residents
cannot afford to buy food, since the banks have been shut
down. Government workers have been unable to acquire their
allotted ration of rice, since no Chief District Officer or
Local Development Officer is present to write the ration
slips. Forty government officers were killed in the
November 14 attack.

MOD RELEASES CASUALTY FIGURES
--------------


15. (U) The Ministry of Defence reported that fourteen
Maoists were killed in retaliatory attacks by security
forces on December 1, 2 and 3. According to the Ministry,
the Maoists were suspected of having set booby traps for the
security forces in seven districts around the country.
Sixteen more Maoists were killed in retaliatory attacks on
Thursday, December 5.

MALINOWSKI