NEPAL: COST OF THE MAOIST INSURGENCY

UNCLAS KATHMANDU 002306

SIPDIS

STATE FOR SA/INS; STATE FOR INR; LONDON FOR POL/GURNEY;
NSC FOR DORMANDY; USAID FOR ANE/SA: BUNDY

E.O. 12958: N/A
TAGS: PREL PTER ECON EAID EFIN NP
SUBJECT: NEPAL: COST OF THE MAOIST INSURGENCY

REF: 04 KATHMANDU 002367

SUMMARY
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1. The effect of the ongoing Maoist insurgency is
palpable in every sector of Nepal's economy. The
estimated economic cost of the conflict, since 1996 when
it started, is more than USD 2.3 billion. Insurgents have
destroyed public and private property worth USD 71
million. The conflict has reduced the flow of foreign
direct investment (FDI) to its lowest figure in 10 years.
Recent Maoist bombings and forced closures of schools and
industries have put the lives of thousands of workers and
students in jeopardy. END SUMMARY.

COSTS OF THE MAOIST CONFLICT
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2. The estimated economic cost of the conflict is more
than USD 2.3 billion. Although the Maoist insurgency
started in 1996, it escalated and began to seriously
affect the economy in 2001, when the Maoists embarked on a
strategy of armed attacks against security forces and
government infrastructure. Maoist insurgents have
systematically destroyed power installations,
telecommunications facilities, bridges, government
buildings and facilities, banks, schools, health posts,
and hospitals. The resulting loss of physical
infrastructure and property exceeds USD 71 million.


3. According to media reports and various domestic and
international agencies, more than 12,000 people have lost
their lives as a result of the conflict. According to the
UNDP, more than 200,000 families have been internally