UPDATE ON NEPAL'S MAOIST INSURGENCY, APRIL 11-18

UNCLAS SECTION 01 OF 03 KATHMANDU 000707

SIPDIS

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

E.O. 12958: N/A
TAGS: PINS PTER CASC PGOV NP
SUBJECT: UPDATE ON NEPAL'S MAOIST INSURGENCY, APRIL 11-18

REFERENCE: (A) KATHMANDU 0692
(B) KATHMANDU 0677

SUMMARY
--------------


1. On April 16 the Government of Nepal (GON) finally
announced its six-member team for peace talks with the
Maoists (Ref A). Baburam Bhattarai and the Maoist
negotiating team met with Narayan Singh Pun, government-
appointed peace talks coordinator, for "goodwill" talks on
April 13, following the release from jail of two Maoist
Central Committee Members. Minister Pun said other Central
Committee Members still imprisoned would be released as
peace talks progressed. In a series of meetings with the
business community, Maoist ideologue Baburam Bhattarai sent
conflicting messages about his party's economic policies.
Maoists reportedly abducted ten people and continue to
extort money. The All Nepal National Independent Students
Union-Revolutionary (ANNISU-R),the Maoist-affiliated
students' group, protesting the hike in gasoline prices,
went on a rampage on April 15, setting fires and destroying
documents. The militant students were also among eight
student groups who called for an educational strike, or
bandh, on April 17, in which schools throughout the nation
were forced to close (Ref B). Victims of the Maoist
insurgency issued a joint statement on April 13 demanding
that the GON punish Maoist criminals, and accusing the GON
of giving undue respect to Maoist leaders. They warned of
their own revolution if they are denied a place in the peace
talks. End Summary.

GON ANNOUNCES PEACE TALKS TEAM; STILL NO DATE
-------------- -


2. The GON announced on April 16 that Badri Prasad Mandal,
the Deputy Prime Minister, will head the government's
negotiating team for peace talks with the Maoists (Ref A).
Narayan Singh Pun, Minister of Physical Planning and Works,
who had been coordinating the peace process since the
declaration of the ceasefire on January 29, will stay on as
a team member. The four other members are Upendra Devkota,
Minister for Health, Science and Technology; Ramesh Nath
Pandey, Minister for Information and Communication; Kamal
Chaulagain, Minister of Labor and Transport Management; and
Anuradha Koirala, Assistant Minister for Women, Children and
Social Welfare. A vernacular publication has reported that
the Royal Palace has appointed a Royal Nepal Army (RNA)
intelligence committee to coordinate the peace talks.
Quoting an unnamed source, the publication said the
committee had already met several times to advise the GON.


3. Reactions from the Maoists and political parties to the
formation of the government's team was mixed. Maoist talk
team leader Baburam Bhattarai reportedly welcomed the
announcement, and declared that the Maoists were ready to
hold dialogue with the King if necessary. Krishna Bahadur
Mahara, spokesman and member of the Maoist negotiating team,
told the local press that the announcement was
"commendable," but again criticized the length of time the
GON had taken to form the team. Arjun Narsingh KC,
spokesman for the Nepali Congress (NC),said the team was
comprised of members of the illegitimate government, and
Pradeep Nepal, spokesperson for the Communist Part of Nepal-
United Marxist Leninist (CPN-UML),expressed concern that
the peace talks agenda be made public.


4. Mahara reportedly told the local press on April 16 that
the Maoists want peace talks to be completed within the next
few months. He warned against any delay by the GON, and
threatened that the insurgents would return to the jungle if
the GON tried to prolong the ceasefire without holding peace
talks. Minister Pun countered that it is impossible to set
a deadline for the conclusion of the peace talks, but
declared that the process will "take a long time."
GON RELEASES MAOIST LEADERS
--------------

5. The GON satisfied another of the demands made by the
Maoists and released two of their Central Committee Members
from military custody on April 13. According to press
reports, the two leaders, Dhoj Khadga and Rekha Sharma, were
flown to Kathmandu in Minister Pun's private helicopter.
The Maoists had demanded the immediate release of a total of
five Central Committee Members as a precondition to peace
talks. Mahara said that while the Maoists were happy with
the development, they would continue to press for the
release of the remaining three leaders. Minister Pun
reportedly has said the other releases would come gradually
as the peace talks progressed.

GOODWILL TALKS HELD
--------------


6. Following the release of two of its senior level
leaders, the Maoist negotiating team met with Minister Pun
on April 13 for "goodwill" talks. According to press
reports, the talks focused on implementing the code of
conduct. While Pun termed the talks "official," Krishna
Bahadur Mahara, Maoist spokesman, denied the discussions
were official, referring to them as "goodwill" talks.
Despite the disagreement, Pun said the talks were going
well.

BHATTARAI'S BUSINESS BLUNDERS
--------------


7. Baburam Bhattarai shifted his public relations focus
from political parties to the business community. His
conflicting statements, however, left many businessmen
wondering what the Maoist ideologue really meant. Bhattarai
met with representatives of over sixteen business
associations on April 14. He reportedly declared that the
Maoists want to free Nepal's industries from the "shackles
of Indian monopoly," and encouraged the audience to be self-
sufficient instead of being dependent on foreign aid. At a
subsequent meeting with other business leaders, however,
Bhattarai contradicted those nationalistic statements,
saying that the Maoists support a free and open market.
Bhattarai's doublespeak continued, with the senior Maoist
leader saying that his party's economic policy calls for an
open market in all sectors, except for those that should be
state controlled. While some business leaders have remarked
that Bhattarai appears to be flexible with his economic
ideas, others see this as another case of the Maoists not
knowing what they want or how to achieve it.

MAOISTS VIOLATE CEASEFIRE
--------------


8. Maoists reportedly abducted ten people from three
different districts in violation of the Code of Conduct
established on March 13. On April 14 the insurgents
abducted eight people from central Kavre District. One
managed to escape. Maoists reportedly have accepted
responsibility, claiming that the victims had been posing as
Maoists and extorting money from villagers. The district
level leader refused to say where the men were taken. A
former Village Development Committee Chairman too was
abducted by Maoists in southern Parsa District, as well as a
merchant from Mohattari District. Violence and extortion by
the Maoists apparently has continued despite the ceasefire
and code of conduct.

ANNISU-R RAGE FUELS PROTEST FIRES
--------------


9. The All Nepal National Independent Students Union-
Revolutionary (ANNISU-R),the Maoist-affiliated students'
group, along with other politically affiliated student
groups, went on a rampage on April 15, setting fires and
destroying documents at various government offices
throughout Kathmandu to protest upcoming college-level
student body elections. The militant student group had
demanded the postponement of the elections. (Note. Due to
the violent protests the elections, scheduled for April 23,
have now been postponed. The protests continue, however,
with some student groups now demonstrating against the
postponement. End Note).


10. ANNISU-R is among eight student groups who called for
an educational strike, or bandh, on April 17, which forced
the closure of schools throughout the country (Ref B).
Several other upcoming bandhs are scheduled for April 20,
23, 28 and 29. The nationwide strikes are meant to force
the closure of schools, businesses and transportation.

VICTIMS DEMAND JUSTICE
--------------


11. Local groups representing victims of the Maoist
insurgency issued a joint statement on April 13 demanding
that the GON punish Maoists guilty of crimes, and accusing
the GON of giving undue respect to Maoist leaders. Calling
Bhattarai a "leader of the terrorist group," representatives
said that the GON has forgotten that Bhattarai and his
fellow cadres have tortured and killed many people for the
past seven years. Representatives from the groups warned
that they would start their own revolution if the GON and
the Maoists dismissed their concerns. The groups are
insisting on representation at the peace talks, legal action
against those guilty of crimes, rehabilitation programs and
compensation for victims of crimes committed by the Maoists.

MALINOWSKI