SOUTH ASIA INTELLIGENCE REVIEW
Weekly Assessments & Briefings
Volume 2, No. 32, February 23, 2004

Data and assessments from SAIR can be freely published in any form with credit to the South Asia Intelligence Review of the
South Asia Terrorism Portal

ASSESSMENT

NEPAL

Escalating Body-count
Guest Writer: Deepak Thapa
Kathmandu-based Journalist and Editor; author of Understanding the Maoist Movement of Nepal

Six months after the ceasefire between the Government and the rebel Communist Party of Nepal - Maoist (CPN-M) broke down (on August 27, 2003), the fighting has bogged down to a stalemate with neither side making any headway. In the countryside, Government presence is still limited to the district headquarters and a few armed garrisons. And although the security forces - under the unified command of the Army - have been making forays into areas outside the secure zones, they have not been able to hold any territory permanently. For its part, neither has the 'People's Liberation Army' of the Maoists been able to prevent incursions by Government troops into areas supposedly under their control.

This seesaw battle has come at a large human cost. Of the almost 9000 people killed in violence related to the CPN-M-led 'people's war' begun in 1996, the outbreak of fresh fighting since August 2003 accounts for almost a quarter: nearly 1500 people (ostensibly Maoists) have been killed by the security forces; over 300 soldiers and policemen have lost their lives; and civilian victims are also in the range of 300. According to the human rights group, INSEC, the rate of killings during this last stage has been a mind-boggling 12.2 per day, an escalation unparalleled in the eight years of fighting.

Notwithstanding the military impasse, the Maoists are as active as ever. In a defiant move in January, they began creating 'autonomous people's governments' to correspond with ethnic or regional homelands. Among these are the 'Magarant Autonomous People's Government' in the Maoist heartland of western Nepal, inhabited largely by Magars, the largest ethnic group of Nepal; and the 'Madhesi Autonomous People's Government' for the Tarai plains that stretch across the southern part of Nepal. (Unfortunately for the Maoists, a member of the former, Suresh Ale Magar, and the head of the latter, Matrika Prasad Yadav, were arrested in India on their way to a rally in New Delhi, and immediately handed over to the Nepal Army.)

It seems clear from the two years of the Army's engagement in the fighting that its role cannot go beyond containment. The security forces have begun venturing into Maoist areas in an apparent bid to counter the impression that Maoist 'governments' are at work in areas outside direct Government control. But these actions have not been able to inflict much damage on a guerrilla force that simply retreats in the face of superior firepower; the military strength of the Maoists remains pretty much intact.

The Government has tried to encourage desertions from the rebel side under an amnesty plan, but in the two months since the scheme was announced, fewer than 500 rebels have taken up the offer. Also, in what appears to be a desperate move, the Government is planning to experiment with setting up village defence committees by arming villagers with basic weapons; but it is facing an uphill task in this as a result of severe criticism from within and outside the country.

The Government of Prime Minister Surya Bahadur Thapa, appointed in June 2003, is currently fighting on three fronts - the Maoists; his own party, which wants him to quit; and the alliance of five parties that want an end to the rule by proxy by King Gyanendra through a handpicked Prime Minister. The Opposition parties have been threatening to launch a movement against the monarchy itself, if the King does not revert to being a constitutional monarch. Anti-government rallies are routine, and the streets of Kathmandu ring with anti-monarchy slogans, the likes of which have never been heard before. But, instead of being conciliatory, the King has made it very clear that he is not going to limit himself within the boundaries laid out in the Constitution. Nepal is bracing up for a new round of protests, as the political parties re-think their agitation strategy.

The Maoist writ still runs largely throughout the country. Bandhs (general strikes or shutdowns) called by them are never defied. The most challenging was the three-day bandh called in western Nepal to coincide with a public felicitation of King Gyanendra in Nepalgunj in early February. Despite the unprecedented security, the Maoists were able to set off a few bombs in this regional centre, as well as to ensure compliance of the people with their bandh order. The countrywide shutdown on February 12, on the eve of the 9th anniversary of the 'people's war', was equally successful, as was another on February 17 in the region around Kathmandu.

The fear psychosis is present everywhere. Although the Maoist supremo, Prachanda, had given the undertaking that political opponents would not be targeted, the Maoists have continued with assassinations. This was underscored most forcefully when the president of the Maoist Victims' Association, Ganesh Bahadur Chilwal, was gunned down in downtown Kathmandu on February 15. The Association had been at the forefront of protests against the Maoists but, since the killing of the president, three office-bearers have quit.

Maoist leaders had also warned, during the ceasefire, that, should hostilities begin anew, Kathmandu would also be sucked into the morass of violence. In the first few weeks after the talks broke down, it was clear that the Maoists were targeting the capital, but the attacks soon petered off, mainly as a result of the security forces being able to smash the Maoist network operating in Kathmandu. But the Maoists have since regrouped, as is obvious from their renewed activities. Explosions have rocked the heart of the city and although casualties have been minimal so far, the threat looms over the capital.

Apart from the bandh the day before, the 9th anniversary of the 'people's war' on February 13 was peaceful enough. That is a date that is etched deeply in Nepali public consciousness. Last year, it was a different sentiment that greeted the anniversary. A ceasefire had just been declared and the various protest programmes of the Maoists had been called off. Peace seemed imminent and hopes soared high. One year later, it is back to the killing fields in Nepal.

PAKISTAN

A Merchant Army
Guest Writer: Rahul Bedi
Delhi Correspondent, Jane's Defence Weekly

Besides ruling Pakistan and controlling its nuclear, defense and foreign policies, the military is also that country's largest and most profitable business conglomerate. This is at least part of the reason why its stranglehold over the country's politics and its vested interests in the nation's continuous militarisation, will not cease. Pakistan, it is useful to recall, expends over a third of its annual budget on the Defense, and its military has historically defined the country's direction and destiny through periods of both democratic and military rule, to the detriment of civil governance.

Today, nearly 1,200 serving and retired military officers - mostly from the army - run a web of banks, transport, road building, communication and construction businesses worth billions of dollars, which comprise the Army's commercial empire.

More specifically, the 'Fauji' or solider foundations also own and operate a private airline, countrywide transport corporations, hundreds of educational institutions, power plants, steel, fertilizer and cement factories, and even produce consumer goods like sugar, electronic items and breakfast cereals. Some of these commercial operations have also been directly involved in gun-running and drug smuggling, generating huge hidden resources for Pakistan's campaigns of terrorism and subversion in Afghanistan and India.

Security sources disclose that personnel drawn from these Foundations worked with the Inter Services Intelligence Directorate (ISID) and the extremist Islamist organizations training, arming and motivating Mujahideen cadres to fight the Soviet occupation of Afghanistan through the 1980's.

A few years later they raised and installed the Taliban in Kabul, providing the Islamic militia financial and logistic support till it was displaced by the US in 2001.

Analyst Satish Kumar who edits India's National Security Annual Review said the Pakistan Army is not only the largest real estate owner, but also the country's 'biggest' commercial player. "It is not just a defense force, but a ruling class oligarchy with substantial economic interests to safeguard" Kumar stated, adding that it is unlikely that the military will relinquish this role in the foreseeable future.

Military juntas have ruled Pakistan directly for more than for half its life after independence in 1947, appropriating large tracts of hugely expensive urban land at throwaway prices to establish grandiose housing colonies. During Pakistan's erratic experiments with democracy, the Army headquartered at Rawalpindi, the garrison town adjoining the capital Islamabad, has exercised thinly veiled control over the civilian administrations, significantly strengthening its financial empire. Pakistani's joke that if every serving and retired military officer protects his own property, their country would be one of the best defended in the region.

The Army's business interests broadly fall into three categories: those controlled directly by the Chief of Army Staff; the formalized military sector, like ordnance and state-owned armament factories managed by the defense ministry; and the four 'charitable trusts' (Fauji Foundations) that operate autonomously like private corporations in which serving and former Servicemen run factories and manufacturing units producing a range of goods and services.

The first group includes the National Highway Authority (NHA) and Frontier Works Organisation (FWO), each headed by a two-star General; and the Special Communications Organisation amply supported by the Signal Corps and the National Logistics Cell that operates a significant, if seldom discussed, country wide trucking operation.

Aided by the Army Engineering Corps, the army's road building conglomerate constructed the precipitous Karakoram Highway in the 1980's connecting Pakistan to military and nuclear ally China, besides laying down roads across the country.

And while the Communications Organisation, working with the Signals Corps, wires up the country, especially Pakistan-administered Kashmir to the mainland, the Logistics Cell is possibly the army's most profitable operation.

Established by Pakistan's former dictator, General Mohammad Zia-ul-Haq in the late 1970's, the Cell's trailer trucks would pick up armaments and ordnance, including assault rifles and Stinger missiles, the Soviet Union's eventual bete noire in Afghanistan, from the southern port city of Karachi.

These armaments were offloaded from ships chartered by America's Central Intelligence Agency, which backed Kabul's 'unholy war' against Moscow. These convoys ferried their lethal cargo to the North West Frontier Province and neighbouring Balochistan, bordering Afghanistan, to Mujahideen groups fighting the Soviet Army.

After 1996, this massive fleet of trucks, controlled mostly by Pashtun tribesmen, was effectively used by the Inter Services Intelligence (ISI) Directorate to supply the Taliban with weapons, fuel and food. The trucks and their plucky drivers played a major role in establishing Taliban control, an operation that has been only sparsely documented.

Intelligence sources said these trailers also transported heroin from numerous laboratories in several of the tribal Agencies along the Pakistan-Afghan border to various cities like Karachi, from where the narcotic makes its way to the West. Pakistani sources reveal that the heroin-loaded convoys were provided unprecedented security and were rarely, if at all, checked en route.

But the Fauji or Solider Foundation, the largest industrial conglomerate with an annual turnover of $ 500 million and profits of over $ 41 million is the 'jewel' in the Army's crown. Headed by a three-star General, it provides ' womb to tomb ' facilities for nearly nine million retired servicemen that include re-settlement and re-employment schemes in military-run cement, power, fertilizer and sugar factories. It also grants retired soldiers land in villages along the line of control (LoC) strung across Pakistan's eastern frontier with India, providing the disturbed region with a trained reservoir of manpower in the event of hostilities. Having retired soldiers in the border regions also makes it easier for the Pakistani Army to infiltrate armed militants across the LoC into Kashmir to fuel the ongoing insurgency.

The Army Welfare Trust, managed by General Headquarters (GHQ), employs around 6,000 former soldiers and runs the Askari Commercial Bank, one of Pakistan's most profitable Banks. Like his predecessors, the Chief of Army Staff General Pervez Musharraf who also doubles as President, heads the Bank 's governing board, which comprises senior officers. The Trust runs around 25 other projects worth around Rs. 17 billion ($ 354 million).

Former Pakistan Air Force officers run the 26-year old Shaheen Foundation, with an annual turnover of Rs. 600 million, that operates Shaheen Airways, the country's profitable and only 'private' airline. Naval officers are in-charge of the Bahria Foundation that manages around 20, mostly civilian, projects also at great profit.

This is, at least in part, why the Pakistani Army is reluctant to make way for a civilian administration. Its economic and, by extension, political interests lie in perpetuating the bazaar they control. Beyond internal supervision, moreover, there is no public accountability for the moneys the Army controls. Worse, private enterprise and overseas investment is also hostage to military diktats. Though Pakistan's Gross Domestic Product (GDP) has, over the past year, registered a six per cent growth, this has mainly been due to the inflow of American money funnelled to Islamabad for its 'help' in the global war against terrorism, or other financial relief packages from international lending institutions. This is an aspect that strategists need to take into account while dealing with 'Pakistan PLC'.

INDIA

Manipur: Rebels in Top Gear
Wasbir Hussain
Associate Fellow, Institute for Conflict Management, New Delhi; Consulting Editor, The Sentinel, Guwahati

Northeast India's Manipur State is virtually under siege, as heavily armed rebels escalate their campaigns of intimidation and violence. During the past fortnight, rebels have announced the award of 'capital punishment' to a Lok Sabha Member of Parliament (MP) from the State; bombed the residence of a Minister; ambushed a Superintendent of Police who was on patrol on a road over which the State Chief Minister was to pass; and accused a Minister and his brother of swindling Government development funds to the tune of Rs. 1.5 million.

The rebels' sway in this frontier State of 2.3 million people can be gauged from the fact that as many as five insurgent groups active in the Imphal Valley, dominated by the majority Meitei community, are in the Indian Ministry of Home Affairs' (MHA) list of proscribed organizations under the Prevention of Terrorism Act (POTA): the Kangleipak Communist Party (KCP), Kanglei Yawol Kanna Lup (KYKL), People's Liberation Army (PLA), People's Revolutionary Party of Kangleipak (PREPAK), and the United National Liberation Front (UNLF). Besides, at least nine other rebel groups are active in Manipur, making the State Northeast India's rebel heartland.

The turn of events in the past few weeks has reinforced the near total collapse of state authority in Manipur. Thounaojam Chaoba Singh, Lok Sabha MP and the Bharatiya Janata Party's (BJP) Manipur unit president, was awarded the 'death sentence' by the KYKL for his alleged 'activities' against the rebel group during the 1999 parliamentary election campaign. On January 29, 2004, the KYKL asked the State BJP to expel Singh by February 15 or be prepared to 'face action.'

Singh's response to the rebel move was both surprising and representative of the general state of insecurity in the State. He went public to seek 'pardon' from the KYKL and urged the rebel group to 'reconsider its decision' on the award of 'capital punishment.' According to media reports, he urged the KYKL 'to excuse him for any incident that had taken place before the 1999 Lok Sabha elections, which might have caused harm or hurt the sentiments of the KYKL.' While seeking pardon, Singh, however, made it clear that other party leaders in the State had no powers to remove him from the post of the State BJP president, and that they were all 'innocent.'

The very fact that Singh, despite being an MP from the BJP that heads Prime Minister Atal Behari Vajpayee's ruling coalition at Delhi, had chosen to assuage the 'hurt feelings' of a rebel group by seeking forgiveness, goes to indicate that a vast section of people who matter in Manipur have no faith in the capabilities of the State Government to protect their lives.

On its part, the beleaguered State Police hurriedly put in place some additional security cover around Singh and advised him against avoidable public appearances. The MHA, according to the State's acting police chief, C. Peter, had sent in express instructions to the Manipur Government to provide Central Reserve Police Force (CRPF) cover to the BJP MP, a directive that has been complied with. Bhorot Singh and three other BJP MLAs in the State have also been provided extra security guards. Such steps are, of course, routine precautionary measures that the authorities draw up from time to time, and would be normal under circumstances of an enhanced threat perception.

That the rebels increasingly call the shots in the State is illustrated further in an unprecedented event in August 2003, when a top Indian Administrative Service (IAS) officer, I.S. Laishram, then the State's Revenue Commissioner, surrendered himself to the KYKL. The outfit had asked Laishram to surrender by September 10, 2003, and face 'trial' for alleged corruption during his tenure as Education Commissioner. Earlier, in March 2003, suspected Kuki rebels waylaid the two-vehicle convoy of Chandel Deputy Commissioner T.K. Singh and kidnapped him after disarming his eight security guards without any resistance.

On February 15, 2004, suspected UNLF rebels attacked the residence of Food and Civil Supplies Minister Ph Parijat Singh in Imphal, the State capital. No one was injured as the grenade failed to explode. Parijat Singh later claimed that the UNLF had demanded Rs. three million from him. Manipur's acting police chief Peter told this writer that the UNLF has sought between Rs. Two and Three million from some ministers in the State. Rebels making extortion demands on ministers and the ministers themselves admitting to having received such demands are unheard of in the rest of India.

Groups like the KYKL, formed in 1994 with an aim, among other things, of purging Manipuri society of its evils, including the drug menace, have succeeded in securing the confidence of sections within the State's civilian population largely because of the prevailing corruption in the Government machinery and the lack of direction in the State due to political instability. The PLA has similarly embarked on moves to clamp down on corruption and other social ills. The masses appear to be fed up with the absence of good governance and lend tacit support to the rebels' action against those accused of corruption.

The Government too takes the rebel charges seriously. On February 18, 2004, the outlawed PLA charged State Family Welfare Minister Bijoy Koijam and his younger brother of swindling Rs. 1.5 million out of funds allocated by the federal Government for some population control schemes. Within less than 24 hours, Manipur Chief Minister O. Ibobi Singh convened an emergency meeting of his Cabinet and directed the Chief Secretary, the highest-ranking bureaucrat in the State administration, to conduct a probe to ascertain the truth.

A weak and seemingly apathetic police force, crippled by political interference, is another reason for this state of affairs. The inability of the State Police to nab the culprit behind the killing of eight-year-old Elizabeth Lungnila, daughter of Francis Ngazokpa, a minister in the Ibobi Cabinet, in November 2003, is a case in point. Ultimately, it were the rebels of the Isak-Muivah faction of the National Socialist Council of Nagalim (NSCN-IM), another rebel group operating in the Naga-inhabited hill areas of Manipur, who captured the main accused and is currently threatening to announce a verdict on him in accordance with the Naga customary laws!

In fact, Manipur is the only State in India's insurgency-wracked Northeast where a state police force had mutinied in recent years. In December 2000, an estimated 1,000 personnel belonging to the Manipur Rifles staged a 'guns down' stir to press the State Government to clear their arrears in their salaries. Manipur's then Police Chief, S. Grewal, is on record stating that the agitation by the Manipur Rifles had affected anti-insurgency operations in the State. The Manipur Rifles personnel, the backbone of the State's law and order machinery, have been demanding outstanding arrears of salary, due to them since 1996, leading to the unprecedented 'guns down' protest in 2000.

It is not surprising that Chief Minister Ibobi Singh cannot easily leave his base in Imphal these days. For instance, he did not attend a crucial meeting of the North Eastern Council (NEC), the regional planning body, at Shillong, capital of Meghalaya, last week. His Government was engaged in putting fire-fighting measures in place to get some respite from the rampaging insurgents, who, unlike many of their counterparts in the Northeast, are far from ready to talk peace.

NEWS BRIEFS

Weekly Fatalities: Major Conflicts in South Asia
February 16- 22, 2004

	Civilian	Security Force Personnel	Terrorist	Total
BANGLADESH	2	0	2	4
INDIA
Assam	1	0	1	2
Jammu & Kashmir	14	2	19	35
Left-wing Extremism	5	0	0	5
Manipur	0	2	0	2
Tripura	0	0	2	2
Total (INDIA)	20	4	22	46
NEPAL	8	9	86	103

Provisional data compiled from English language media sources.

INDIA

1,000 former BLT cadres to be recruited into paramilitary forces: The Union Ministry of Home Affairs has reportedly decided to recruit 1,000 surrendered Bodo Liberation Tigers (BLT) cadres into the paramilitary forces. While 550 cadres would be recruited in the Border Security Force (BSF), 300 and 150 would be recruited into the Central Reserve Police Force (CRPF) and the Assam Rifles, respectively. Sentinel Assam, February 18, 2004.

People's Conference pulls out of All Parties Hurriyat Conference: The Jammu and Kashmir People's Conference (PC) on February 17, 2004, broke away from the Abbas Ansari faction of the separatist All Parties Hurriyat Conference (APHC) as its Working Committee favoured Sajjad Lone as Chairman and expelled his elder brother Bilal Lone from the basic membership of the party. The wife of slain PC founder Abdul Gani Lone is reported to have favoured Sajjad while alleging that Bilal was being "taken for a ride" by the former Hurriyat chairman Abdul Gani Bhat. Addressing a press conference at the PC headquarters, Sajjad Lone said that the 22-member Working Committee had unanimously favoured Bilal Lone's expulsion from the basic membership. He also said that the PC executive council also decided to withdraw from the APHC faction led by Maulvi Abbas Ansari. Meanwhile on the same day, the People's Political Front (PPF), one of the participants in the January 22 Union Government-APHC talks, pulled out of the dialogue process while alleging that the Government was not serious about the talks. The PPF would not participate in the talks till there was a perceptible change in the ground situation in Jammu and Kashmir, PPF spokesperson Mohammad Musadiq said in a statement after a meeting of its executive committee in Srinagar. Daily Excelsior, February 18, 2004.

NEPAL

Insurgency toll crosses ten thousand: The Home Ministry spokesperson, Gopendra Bahadur Pandey, said that approximately 10,000 people have lost their lives during the course of insurgency in the last eight years. Speaking at the daily media briefing in Kathmandu on February 20, 2004, Pandey stated that 1,122 police personnel, 372 Royal Nepal Army soldiers and 172 Armed Police Force (APF) personnel were killed during this period. Over 6600 Maoists were killed in the offensives. He further disclosed that 1,175 civilians lost their lives in the last eight years. This year alone, 1,674 people lost their lives including 259 civilians, 130 policemen, 129 army soldiers and 56 APF forces whereas 1,100 Maoist guerrillas were killed in security operations. Nepal News, February 21, 2004.

At least 60 Maoists killed during encounter in Kalikot district: At least 60 Maoist insurgents are reported to have been killed during an encounter that began on February 16, 2004, in the Kalikot district. The SFs also reportedly encircled around 1,000 insurgents in the area with Army helicopters. Nepal News, February 18, 2004.

PAKISTAN

Islamist extremists set ablaze nine schools in Gilgit: Unidentified persons are reported to have set ablaze a school in the Diamer district of Gilgit in the Northern Areas of Pakistan on February 20, 2004, raising the number of damaged schools to nine. According to Daily Times, the schools were either set ablaze or bombed since February 16. In the latest incident, a community girls' school was burnt down in the Thore valley of Diamer, 160 kilometers south of Gilgit causing no injuries, said police official Zahir Khan. Police is guarding 200 community schools being run under the Social Action Programme and funded by the World Bank to prevent further incidents, added Khan. Meanwhile, an unnamed official of the Northern Areas Home Department said that these incidents were occurring due to a decline in enrolment in seminaries and an increase in Government schools. He said that the area was under the influence of Islamist extremists who felt threatened about losing their support base in the district. Daily Times, February 21, 2004.

Country could be ostracized internationally for terrorist links, warns President Musharraf: President Pervez Musharraf warned on February 18, 2004, that Pakistan could be ostracised internationally if it did not address global concerns that it was a hub of terrorism and was involved in nuclear proliferation. "A movement should be launched against terrorism and extremism," he said at a conference of Islamic scholars in Islamabad. The President also said that Pakistan could face international sanctions, an attack on its tribal region, close to the Afghan border, and even on its nuclear assets if it failed to change its image. "We could face serious consequences if we don't play our cards right� If this impression that terrorism is continued from Pakistan ...then they would themselves start bombing," said Musharraf. He indicated that the military regime had told tribal elders to hand over foreign suspects hiding in the region. "If you surrender them, you will not be handed over to any other country. It is my promise," he added. On nuclear proliferation, he said that "Our vital national interest, our nuclear and missile programme... could be harmed physically� We have to assure the world that Pakistan is a responsible nation and was neither involved in the illicit proliferation of nuclear capability (at present) nor in the future." Dawn, February 19, 2004.

India and Pakistan reach agreement on framework for talks: India and Pakistan reached an agreement on February 18, 2004, on a framework for talks on bilateral issues including Kashmir, terrorism and nuclear weapons. Indian Foreign Secretary Shashank and his Pakistani counterpart Riaz Ahmad Khokhar, according to a joint statement, endorsed the agreement worked out at the Joint Secretary-Director General level dialogue held in Islamabad on February 16 and 17. They also decided that their Foreign Secretaries would hold talks on peace and security, including Confidence Building Measures (CBMs) and Jammu and Kashmir, in May or June 2004. In July, talks would be held on issues such as Siachen, Wullar Barrage/Tulbul Navigation Project, Sir Creek, terrorism and drug-trafficking, economic and commercial cooperation, and promotion of friendly exchanges. The joint statement further said that a meeting between the Director-General of the Pakistan Rangers and the Inspector-General of the Indian Border Security Force would be held in March or April while talks on nuclear CBMs are scheduled for the latter half of May. The discussions on drug trafficking and smuggling have been set for June. The Foreign Secretaries would meet for one day ahead of the two Foreign Ministers' meeting in August. Daily Times, February 19, 2004.

The South Asia Intelligence Review (SAIR) is a weekly service that brings you regular data, assessments and news briefs on terrorism, insurgencies and sub-conventional warfare, on counter-terrorism responses and policies, as well as on related economic, political, and social issues, in the South Asian region.

SAIR is a project of the Institute for Conflict Management and the South Asia Terrorism Portal.

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SOUTH ASIA INTELLIGENCE REVIEW Weekly Assessments & Briefings Volume 2, No. 32, February 23, 2004

SOUTH ASIA INTELLIGENCE REVIEW
Weekly Assessments & Briefings
Volume 2, No. 32, February 23, 2004