NEPAL: MAOISTS ISSUE CONCILIATORY STATEMENT;

C O N F I D E N T I A L SECTION 01 OF 02 KATHMANDU 002048

SIPDIS

STATE FOR SA/INS AND S/CT

E.O. 12958: DECL: 10/21/2013
TAGS: PTER CASC ASEC BEXP NP
SUBJECT: NEPAL: MAOISTS ISSUE CONCILIATORY STATEMENT;
ACTIONS CONTRADICT SUPPOSED NEW POLICY

REF: A. KATHMANDU 2020


B. KATHMANDU 1964

Classified By: AMB. MICHAEL E. MALINOWSKI. REASON: 1.5 (B,D).

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SUMMARY
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1. (C) In an October 21 press statement, Maoist leader
Prachanda announced that the insurgents would no longer
attack infrastructure, political party workers, members of
the security forces on leave, and assistance projects, except
those funded by "American imperialists." The statement,
which summarizes decisions taken at a recent Politburo
meeting, likely reflects growing Maoist awareness of the
increasing unpopularity of their violent and destructive
tactics among their purported supporters in underdeveloped
rural areas. A Maoist attack on a local government office
building in Bhaktapur District in the early morning hours of
October 22 directly contradicts the supposed new policy and
calls into question the Maoists' sincerity in implementing
it. Besides threats against local Coca-Cola and
Colgate-Palmolive operations, the Maoists have repeatedly
threatened and attempted to extort money from Pepsi
distributors in Nepal. The singular swipe at U.S.-funded
assistance programs, moreover, strengthens the case for a
possible designation of the Maoists under E.O. 13224 on
terrorist financing. End summary.

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A KINDER, GENTLER PRACHANDA?
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2. (U) Late on October 21 a number of local media
representatives received an e-mail message, purportedly from
Maoist leader Prachanda, announcing several policy changes,
which were reportedly decided at a recent Politburo meeting
held at an undisclosed location. Claiming that the Maoists'
military "capabilities have improved . . .(so that) from the
hills to the Terai and in all rural areas the old state power
has ended," the statement declares that "all sabotage against
the Village Development Committee buildings (the smallest
unit of local government; Maoists have destroyed or damaged
one-third of all such structures in the country),
telecommunication towers, empty army barracks and police
posts and other physical infrastructure will be
discontinued." Instead, such infrastructure will be
"protected, promoted and mobilized in the interests of the
people. (Disciplinary) action against the enemies of the
people and spies for the old regime will not be undertaken
by the People's Army itself but rather through the people's
constitutional and legal process. . . . No physcial
punishment will be given to lower-level personnel of the army
and police while they are on leave; instead they will be
persuaded to quit their posts and work for the people. Their
families will be protected. Likewise, no action will be
taken against political leaders and party workers in the
rural areas on the basis of their political beliefs. . . .
Action against anyone found guilty of being an informant will
be initiated according to the people's constitutional
process." With respect to extortion, the statement claims
that common people will be allowed to give "donations"
voluntarily, while big businesses, industrialists, transport
operators and organizations will be assessed a fixed "tax."
No attacks will be made on NGO and INGOs "other than those
run by American imperialists." Non-US-funded aid projects
will be allowed to continue "in coordination with the local
people's government."


3. (U) The statement notes that the Maoists will "formally
appeal" to the United Nations and other countries, especially
India and China, to "extend support" to the insurgents, "who
had gained the trust of the citizens." It announces the
appointment of Politburo member and former negotiator Krishna
Bahadur Mahara as spokesman, whose responsibilities include
"suppressing the false publicity of the old state power," and
concludes by reporting the Politburo's resolve "to prepare
for counterattack against enemies."

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ACTIONS SPEAK LOUDER THAN
POLITBURO PRONOUNCEMENTS
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4. (U) While the Maoist leadership was scrupulous in
circulating news of its revised policy directives to major
media outlets, it was apparently less diligent in getting the
word out to its operatives in the field. At about 0400 local
time on October 22, suspected Maoist insurgents bombed and
set fire to a Village Development Committee building in
Bhaktapur District.

5. (C) The Maoists' "tax" on "big businesses" and
"industrialists" will likely include U.S. investments and
distributors of U.S. products. Besides repeated threats and
extortion demands directed against local representatives of
Coca-Cola and Colgate-Palmolive (Ref A),the Maoists have
also targeted local distributors of Pepsi products. On
September 17 a Pepsi sales manager and seven other employees
traveling in Rupandehi District were robbed at gunpoint and
their vehicle set on fire. The attackers reportedly shouted
anti-American slogans. On October 9 suspected Maoists robbed
and beat the driver of another Pepsi truck in in
Sindhupalchowk District (Ref B),torching the vehicle. The
local manager reports that his company has received at least
five extortion demands since July.

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COMMENT
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6. (C) The savage killings of mainstream political party
activists, soldiers on leave, and members of servicemen's
families, their exorbitant and excessive extortion demands,
their senseless destruction of vital infrastructure, and
their interference with popular aid programs have seriously
eroded the insurgents' base of support among their purported
constituency--the rural poor. This supposed softening of
Maoist tactics may reflect no more than the Politburo's
realization that unrestrained, random violence has cost it
valuable political capital among the very members of Nepali
society in whose interests the Maoists claim to be fighting.


7. (C) Comment Continued: Nonetheless, we expect the
Maoists (and perhaps others in the donor community and civil
society) to cite this declaration as a reason to forestall a
possible designation of the Maoists under E.O. 13224 on
terrorist financing. We think this would be a mistake. We
seriously question whether the Maoists' commitment to
implementing this "new" policy extends beyond the
rhetorical--especially given the Oct. 22 attack on the VDC
building, which directly contravenes those directives. The
decision to assess a "tax"--without even the polite fiction
of such a levy being a "voluntary donation" on large
businesses indicates that U.S. investments like Coca-Cola can
expect continued harassment, extortion, and threats that will
render their continued operation increasingly difficult.
Moreover, the Maoists' singling out of US-funded aid
activities shows that they remain committed to undermining
our development assistance programs--one of our most
important foreign policy objectives in Nepal. We continue to
believe that a designation of the Maoists under E.O. 13224 is
justified.
MALINOWSKI