Identifier
Created
Classification
Origin
03KATHMANDU1321
2003-07-14 10:29:00
SECRET//NOFORN
Embassy Kathmandu
Cable title:  

NEPAL: PEACE PROCESS PROGNOSIS DIM

Tags:  PTER PGOV PREL PHUM NP 
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This record is a partial extract of the original cable. The full text of the original cable is not available.
S E C R E T SECTION 01 OF 04 KATHMANDU 001321 

SIPDIS

NOFORN

STATE FOR SA/INS, PM AND INR
LONDON FOR POL/GURNEY, NSC FOR MILLARD

E.O. 12958: DECL: 07/10/2013
TAGS: PTER PGOV PREL PHUM NP
SUBJECT: NEPAL: PEACE PROCESS PROGNOSIS DIM

REF: (A) KATHMANDU 1099 (B) KATHMANDU 1175 (C)
KATHMANDU 1262 (D) KATHMANDU 1032

Classified By: Ambassador Michael E. Malinowski for Reasons 1.5 (b,d)

S E C R E T SECTION 01 OF 04 KATHMANDU 001321

SIPDIS

NOFORN

STATE FOR SA/INS, PM AND INR
LONDON FOR POL/GURNEY, NSC FOR MILLARD

E.O. 12958: DECL: 07/10/2013
TAGS: PTER PGOV PREL PHUM NP
SUBJECT: NEPAL: PEACE PROCESS PROGNOSIS DIM

REF: (A) KATHMANDU 1099 (B) KATHMANDU 1175 (C)
KATHMANDU 1262 (D) KATHMANDU 1032

Classified By: Ambassador Michael E. Malinowski for Reasons 1.5 (b,d)


1. (S/NF) Summary. Maoist activities in violation of the
code of conduct, including extortion, harassment and
abductions, have increased since late May, dramatically in
the last couple of weeks. In particular, Maoists have
stepped up efforts to rebuild their war chest with the
possible objectives of bolstering their stocks of arms and
ammunition, paying salaries to militants, and/or buying
political respectability. At the same time, rhetoric by the
Maoist leadership against the Government of Nepal has grown
more vitriolic. Maoist rhetoric against the United States
increased several weeks ago as well, but appears to have
tapered off more recently. A truncated negotiating team,
limited by Prime Minister Thapa's failure to bring the legal
political parties into the government, has delayed resumption
of formal peace talks. Although informal talks began July
12, formal negotiations are on hold until the two sides
concur on what was agreed at the last round of talks.
Statements and actions by other actors, such as the Royal
Nepal Army, National Police and the Palace, could place
increasing strain on the cease-fire. It now appears that the
Maoists are preparing to abandon the negotiations if they
cannot obtain a commitment from the GON for an unrealistic
demand to restrict army movements, and will likely blame the
Government if they resume violence. End Summary.

--------------
Increase in Maoist Activity
--------------


2. (C) Since late May, the insurgents have increased sharply
activities in violation of the code of conduct agreed to by
the Maoists and the Government of Nepal (GON). Relaxed
restrictions during the cease-fire have allowed the Maoists
to increase their presence in areas where they were less
active and to continue to intimidate the population in areas
not under sustained GON control. In some areas, the Maoists

continue to prohibit the GON from re-establishing a presence
and providing services.


3. (S/NF) Reports of Maoist extortion, harassment,
abductions, recruitment and training have become more
frequent (Ref A). All of the international chambers of
commerce have received complaints from member companies that
the Maoists are regularly harassing and extorting money from
them in unprecedented amounts. Reports from the countryside
indicate that the insurgents are taxing harvests, development
projects, drug trafficking, and remittances, as well as
forcing villagers to pay for 'membership cards' into the
Maoist organization (Refs B, C). Press reports indicate that
since the end of May the Maoists have abducted 65 people and
killed 6 others as compared to 148 abductions and 8 killings
from January through May. (Note. GON security forces
reportedly have killed 6 suspected-Maoists in the period from
January through May and another 14 people since late May.
End Note.) Maoist military training has been ongoing, with
the Royal Nepal Army (RNA) reporting over 150 known training
exercises since the cease-fire was declared in January.


4. (S/NF) The increase in insurgent activity coincided with
the May 30 resignation of then-Prime Minister Lokendra
Chand's government and was likely a reaction to political
uncertainties over the new government leadership. With
Chand's resignation, the first GON negotiating team was
dissolved; talks with the Maoists have not resumed since the
second round was held May 9. Prime Minister Surya Bahadur
Thapa has appointed two cabinet members to the negotiating
team with the intention of including negotiators from the
main political parties once, and if, they join the
government. In the meantime, Information Minister Kamal
Thapa announced publicly in late June the GON's willingness
to resume negotiations. Informal meetings began July 12, but
formal negotiations are on hold until the two sides concur on
what was agreed at the last round of negotiations.
Well-placed Embassy contacts indicate that the Thapa
government is preparing to resume the negotiations in a more
systematic, professional way than was done by previous GON
negotiators. However, most of the Maoist leadership,
including the negotiating team, has been conspicuously absent
from the capital since early June, apparently (and
inexplicably) fearing preemptive arrests by the Government.

-------------- --------------
Maoist Rhetoric: Accusations against the GON and United States
-------------- --------------


5. (SBU) Maoist rhetoric has grown increasingly negative
since the Thapa government came to power on June 4 (Ref B).
The rhetoric's focus has been on accusations that the GON has
been violating the code of conduct and on warnings against
"foreign interference," placing particular emphasis on
alleged interference from the U.S., UK and, to a lesser
extent, India. Maoist political leaders continue to press
for a round table meeting with the King and political
parties, an interim cabinet that would include Maoist leaders
and a constituent assembly that would overhaul the
constitution, with special attention to severing the King's
authority over the army.


6. (S/NF) Although Maoist anti-American rhetoric has tapered
off in the last two weeks, that rhetoric in the recent past
targeted the Maoists' formal inclusion on the U.S.
Government's terrorist watch-list as well as U.S. military
and economic support to the GON. In a press release on June
29, Pushpa Kamal Dahal, alias Prachanda, Maoist supreme
leader, declared that there was a "serious conspiracy from
within and outside the country" to derail the peace process.
Leftist newspapers and surrogate covert Maoist supporters
have reported that the U.S. is encouraging the GON to take a
hard-line approach to negotiations with the Maoists, falsely
suggesting that the U.S. is pushing the GON towards breaking
the cease-fire.

-------------- --
Maoist Fund-Raising Objectives: Guns or Butter?
-------------- --


7. (S/NF) The insurgents' aggressive campaign of fund-raising
through extortion could have a number of objectives. First,
the Maoist leadership could be building up its war chest in
anticipation of a break in the cease-fire and resumption of
hostilities. Post has received information that the Maoists
continue to seek and import arms and ammunition and have the
financial wherewithal and capacity to use explosives albeit,
still at a fairly unsophisticated level. Second, the RNA
reports that the Maoist leadership's financial needs have
increased because it has been obliged to begin offering
salaries comparable to those of the RNA in order to retain
its mid- and low-level cadres. The Army leadership tells us
that its information indicates that the Maoist organization
is under stress due to low morale, a lack of resources and
the perception by the rank and file that the leadership is
faltering. Third, the Maoist leadership could be building
up its treasury in order to buy political respectability and
to assist its effort at a 'soft landing' within the political
mainstream. Another possibility, supported by some
intelligence, is that the Maoists will pursue both military
capability and political respectability simultaneously by
sending its military wing underground while pursuing
political advantage as a legitimate party.

--------------
Splits Within the Maoist Camp?
--------------


8. (C) The Maoist organization is structured with a Central
Committee of roughly 50 members and smaller District
Committees led by District Commanders. How the insurgents
approach recruitment, training and extortion at the district
level depends largely on the personality of the District
Commander. Consequently, in some districts, there have been
few incidents of abduction or forceful recruitment, while in
others there have been many. However, in all districts, even
those considered less Maoist-affected, local Maoists have
held mass gatherings and continue to collect money through
taxes and extortion.

9. (S/NF) There appears to be some disconnect between the
district-level Maoist rhetoric and that at the national
level. In Chitwan, for example, during their mass meetings,
local Maoists reportedly have expressed deep commitment to
the peace process and unwillingness to return to the jungle.
However, national-level rhetoric continues to be hard-line,
reasserting that the Maoists are willing and able to resume
guerrilla warfare. In late June, the Maoist supreme leader
Prachanda declared that there would be a "great disaster" if
the peace negotiations were disrupted. One worrisome
consequence of this disconnect is that it is not certain that
all the district commanders would obey a central order to
disarm if a political settlement were reached in Kathmandu.


10. (S/NF) There may be some increased strain also within the
Maoist Central Committee. The political leadership headed by
Dr. Baburam Bhattarai reportedly is more interested in
working with the disaffected political parties and becoming
part of the political mainstream than the military arm led by
Ram Bahadur Thapa (alias Badal) and the Maoist supreme
commander Pushpa Kamal Dahal (alias Prachanda). However,
reports from the field indicate that the Maoist military
cadres, with some exceptions, are continuing to execute
orders faithfully from the politburo. Post believes that
there is a strong possibility that the Maoist leadership
could stage a falling-out between the political and military
wings, thereby allowing the political leadership to continue
its dialogue with the GON while the military wing uses terror
and violence to reinforce the Maoist position, a la tactics
used by the IRA/Sein Fein and the Palestinian Liberation
Organization. RNA leaders suggest that they are aware of
this possibility and are prepared to counteract it, but have
not specified how.

--------------
Grim Prognosis for Peace Process
--------------


11. (S/NF) The dramatic increase in violations of the code of
conduct by the Maoists, the delay in peace talks, the
intransigence of the legal parties, increasingly negative
rhetoric by the Maoists, and possible dissonance within the
Maoist hierarchy are putting growing pressure on the
cease-fire. Some suspect that top Maoists are in hiding
already for fear that Prime Minister Thapa's new government
intends to break the cease-fire unilaterally and seize the
Maoist leadership. The government is coming under increased
pressure from a growing number of victims of the Maoist
extortion campaign to put a stop to it. That likely would
result in the arrests of some key Maoists including some
known leaders. For talks to resume, the Maoists have
indicated that Thapa's government must confirm in advance its
acceptance of agreements allegedly reached during the second
negotiating round. However, because there are no written
records of those talks, controversy continues, particularly
over whether the previous GON negotiating team agreed to
limit the RNA to within 5 kilometers of its barracks.


12. (S/NF) All sides--the Maoists, RNA, National Police and
Palace--have made statements or are acting in ways that could
aggravate the fragility of the cease-fire. RNA leaders have
warned that they are prepared to implement martial law in the
far west and east of the country if the cease-fire breaks.
On July 6, the Inspector General of Police issued an arrest
warrant on extortion charges for Kumar Dahal (alias Vijay),
the Maoist commander in the Kathmandu Valley who claimed
responsibility for the murders of two Embassy security
personnel in December 2001 and November 2002. If the arrest
takes place, the Maoists might use it as an excuse to break
the cease-fire, claiming a direct attack on the party
leadership. Meanwhile, King Gyanendra appears willing to
take a more assertive role. In a private conversation with
the Ambassador, the King suggested that if Prime Minister
Thapa is unable to win the cooperation of the political
parties, he could be forced to consider a range of possible
options." The only prognosis on which there is much
agreement among our best contacts is that the future of peace
negotiations looks increasingly grim.
MALINOWSKI