WEAVING TERROR: MAOIST ATTACKS ON CARPET INDUSTRY

C O N F I D E N T I A L SECTION 01 OF 02 KATHMANDU 000655 SIPDIS LONDON FOR POL/RIEDEL E.O. 12958: DECL: 03/31/2012 TAGS: PGOV PTER ELAB ECON ASEC CASC PREF PHUM NP SUBJECT: WEAVING TERROR: MAOIST ATTACKS ON CARPET INDUSTRY CONTINUE REF: A. 01 KATHMANDU 2352 ¶B. 01 KATHMANDU 1321 Classified By: AMBASSADOR MICHAEL E. MALINOWSKI, REASONS 1.5(B),(D) ¶1. (C) Summary. For five minutes on the evening of March 25, forty to fifty suspected Maoist youths terrorized a carpet business at the edge of Nepal's capital city, setting fires and causing extensive property damage. No one was injured. Now fearful and discouraged, the owner of the business expressed bitterness because no one had contacted him to get his story but added that he was too afraid to talk to anyone. The firm had recently refused to allow radical trade union organizers into their shop and had received written threats and requests for money from the Maoists. The March 25 attack was the second in a month against Tibetan-owned carpet businesses and continued a string of attacks stretching back to last summer. Nepal's carpet industry may never recover. End Summary. Maoist Raid on Carpet Manufacturer -------------- ¶2. (SBU) Between forty and fifty suspected Maoists invaded the compound of the Himali Rug House in the Boudha area of Kathmandu just after 6:00 p.m. on March 25. In their raid, which lasted barely five minutes, the Maoists threw a dozen "petrol bombs" (Molotov cocktails),damaging USD thousands worth of carpets and a new Toyota automobile. The damage would have been much worse but the Maoists, petrol bombs managed to penetrate only one window - bottles thrown towards the owner,s office missed their target - and the firm had sent out a large shipment of carpets the day before. No one was injured. It was the second attack on Kathmandu's carpet firms in March. ¶2. (SBU) The firm,s compound, containing the owner,s home, a warehouse for sorting dyed wool, housing for employees, and carpet showrooms, sits at the edge of a densely populated area but borders an expanse of rice paddy. A national forest, Gokarna, lies just beyond the fields. Young and Out of Nowhere -------------- ¶3. (SBU) According to eyewitnesses, the mob of Maoists was made up of youths, none more than 25 years old, and included six or seven girls. They appeared as if from nowhere, apparently having approached the scene from several directions at once, including across the forest and through the paddy. After charging the gate, a few members of the gang restrained the single guard on duty and about a dozen stood sentinel outside while the rest rampaged through the compound. They asked for the boss - who was out on an errand - but not by name. ¶4. (SBU) After consummating their terror, the mob scattered, some running down the crowded street that leads to Boudha stupa. Two Bihari employees of the firm followed, screaming to passers-by to stop the vandals, who, they yelled out, were Maoists. No one responded. No Contact -------------- ¶5. (C) Aside from the police, the owner had not received inquiries from any other quarter, including journalists, human rights organizations, victims groups, or the Office of Tibet. (The owner is an ethnic Tibetan holding a Nepali passport.) Although local newspapers covered the story, quoting police sources, they did not contact the firm for confirmation or comment. The owner criticized one paper in particular because it had put the number of invaders at only fifteen. Even so, he expressed a reluctance to speak with human rights or victims groups, saying he was too scared to talk to anyone. The owner,s family has gone to live with relatives. He himself spends nights at the homes of friends, or in hotels. "They,re looking for me," he said. He felt insecure, and helpless, and could not eat. Labor Problems, Threats, Preceded Raid -------------- ¶6. (C) The owner also admitted that he had had labor problems in the past. When approached recently by leaders of a radical labor union, he had declined to allow them to organize in his shops. He had also been solicited for donations to the Maoist cause, and had been threatened when he refused to pay. Nonetheless, he did not report these incidents to the police because he felt that they would not be responsive, and that if he did make a report it might cause trouble for him. After the Maoists, raid, the police began sending two officers to pass the night on the compound, in the room closest to the gate. ¶7. (C) The firm exports primarily to the U.S.; its main buyer has been an up-scale carpet store off Union Square in New York City. The owner's daughter, age four, was born in New York and is an American citizen. His son, age three, holds Nepalese citizenship. Carpet Makers Weaving in Terror -------------- ¶8. (SBU) The March 25 incident was the second attack on the Kathmandu valley,s Tibetan-owned carpet businesses in the month of March. On March 7, a package containing explosives was left outside a carpet showroom in the Jawalakhel area of Patan. Security forces moved the bomb to a nearby field, where it detonated. At another carpet showroom just down the street, a similar explosive package blew up at another carpet showroom December 3, killing two (Ref A). And in an incident much like the March 25 attack, several dozen suspected Maoists in July, 2001 raided a carpet factory in Thimi, a few miles east of the capital, setting fire to piles of carpets with petrol bombs (Ref B). The owner of the Thimi factory was an ethnic Newar. Comment -------------- ¶9. (SBU) The string of attacks on carpet firms over the past year has increasingly demoralized an industry already suffering from sagging sales abroad and uncertain political conditions at home. Whether the attackers were Maoist regulars, sympathetic unionists, or merely opportunistic troublemakers, carpet manufacturers now live in fear, both for their own safety and that of their families. In most cases, their enterprises have taken decades to build up; employ thousands of Nepalese workers; and generate about twenty percent of Nepal,s foreign currency earnings. Under current conditions, Nepal's carpet producers do not see how they can reestablish reliable chains of production. Losing one of its few viable industries will accelerate Nepal's economic disintegration and further cripple its state finances. MALINOWSKI