Oxygen Burning

The Himalayan kingdom’s agony isn’t over yet. Twelve major companies remain closed. Top of the list is Surya Kiran in which India’s itc has a 69 per cent share, and alone contributes four per cent to Nepal’s revenue. The Nepal government has tried to convince these companies to reopen, promising adequate security, but they remain reluctant to risk lives and losses against threats from the Maoists.

Their closure predates the siege the Maoists had imposed on Kathmandu. It all began on August 16 with bomb explosions in the tennis courts of the plush Soaltee Hotel. The target was specially chosen to undermine the tourism industry which had been on an upswing. Also, the Soaltee Crowne Plaza was among the 12 companies whose business operations the Maoists had threatened to stop because of their ‘anti-labour’ policies. With guests evacuated, the 12 targeted companies in an emergency meeting decided to stop all operations from the following morning.

Perhaps this decision emboldened the Maoists to announce Kathmandu’s economic blockade. They declared that truckers ferrying goods from India to Kathmandu on Prithvi Raj Marg would be targeted, as also those that ply on Kodari Marg that connects the capital to Tibet. These two highways are the country’s lifeline: apart from 7,00,000 tonnes of petro-products, 65 per cent of Nepal’s total imports pass along the Prithvi highway. Obviously, Kathmandu had ample stock not to let the siege pinch its citizens overmuch.

"Their siege has flopped," gushed deputy PM Bharat Mohan Adhikary at the Maoist’s decision to lift the siege on August 24. Yet, Adhikary’s elation may prove premature. For one, the closure of 12 companies is a setback to Nepal’s economy. Two, sources say the Maoists could issue a second list of companies asking them to close down or countenance attacks. Three, foreign companies have engaged agencies to undertake risk assessment; any negative report, say sources, could impact severely on Nepal’s industry.

Hitherto, the Maoists have been stridently opposed to American companies, repeatedly attacking Coke bottling units in Kathmandu and Chitwan. In fact, last year, a team from Coke’s headquarters in Atlanta had come down to consider closing down its two plants. But the move was abandoned after US ambassador Michael Malinwoski pleaded against it, arguing that Coke’s departure would be tantamount to succumbing to the ‘terrorists’.

So why did the Maoists target Indian companies this time round? Though the Maoists have targeted Indian goods carriers and businessmen following the arrest of their senior leader Mohan Baidya in Siliguri a few months back, Indian authorities here do not believe that the Maoists are concertedly acting against India. Their reason: of the 12 ‘anti-labour’ companies, only Surya Nepal with Rs 480 crore (300 crore in Indian rupees) has a major Indian interest; Soaltee has only a nominal share of the Oberoi group.

Yet, instability in Nepal could be inimical to India’s business interests. Of the 800 joint companies registered in Nepal, 300 boast of Indian participation. They together account for 38 per cent of the total foreign investments here, and directly employ 45,000 people. The scale of indirect employment is incalculably enormous. Again, two Indian companies, Arti Strips and Dabar Nepal, together contribute 13 per cent of Nepal’s total exports.

On August 25, prime minister Sher Bahadur Deuba spoke to a business delegation, urging a rethink by those who has stopped operations. He had "something effective" in mind. But it was a short-lived bid: the same day, the Maoists attacked three Surya Tobacco retailers in Parsa, 280-odd km south of Kathmandu.

Business houses here want the government to lift the tag of ‘terrorists’ from the trade union wing of the Nepal Communist Party-Maoists, believing the insurgents would then allow them to operate their businesses. The lifting of the terrorist tag is one of the three Maoist demands; the other two are investigation into the killings of ncp-Maoist leaders and disclosure of the whereabouts of arrested ‘comrades’. Home minister Purna Bahadur Khadka told Outlook, "The government is keen on a negotiated settlement with the Maoists, but won’t budge under these tactics."

But there’s intense disagreement over the process of negotiations. The insurgents have asked for United Nations mediation, and Secretary-General Kofi Annan has expressed his willingness to do so. Nepal, however, knows this isn’t acceptable to India, allergic as it is to international or third-party mediation in its backyard.

Many here feel India is playing a dual role—declaring Maoists ‘terrorists’, yet sheltering top insurgent leaders on its territory. This perception was bolstered during last week’s crisis because of the reporting in Indian media. An agency report said New Delhi was planning to ‘bread-bomb’ Kathmandu, Sri Lanka style; another newsreport claimed India and Nepal had undertaken joint military operations against the insurgents. These ‘plants’ were seen as symptomatic of India’s big brotherly attitude which assumed Kathmandu couldn’t survive without New Delhi’s help. As deputy prime minister Adhikary told Outlook, "Is the media of a friendly country expected to feed absolutely false news?" His ire is understandable. What isn’t is Kathmandu’s eagerness to have 12 companies to begin operations. For, this is surely not the end of story.