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