Maoist rebels turn to extortion to keep struggle alive

Extortion Maoist rebels in Nepal is threatening hundreds of businesses still struggling to cope with months of political unrest, officials said yesterday.

They said about two dozen industries had been forced to close in the southern town of Birgunj and many others would follow suit if rebels did not stop making threats.

"The Maoists are demanding huge sums of money and intimidate the management to close plants," Bijay Sarawagi, chief of the local unit of the Federation of the Nepalese Chambers of Commerce and Industries said.

Birgunj a major business town 150 km south of the capital Kathmandu. It is home to about 500 industries producing iron goods, hydrogenated vegetable oil and clothes and employing about 50,000 workers.

Sarawagi groups of Maoists come into the factories, demand work or higher wages for their cadres or force the factory to close.

"If this continues all 500 factories will be forced to shut down," he said.

A trade union affiliated to the rebels has denied issuing threats or collecting money by force from industries, but business groups say extortion continues despite a truce that is in force.

News said Prime Minister Girija Prasad Koirala called the rebel chief Prachanda on the telephone yesterday and urged him to stop the harassment. The Kantipur newspaper reported Prachanda -- whose real name is Pushpa Kamal Dahal -- said he would issue an order to his cadres to halt the extortion demands.

Since launching their insurrection in 1996, the rebels have extorted money from people and businesses to support their fight. The practice has continued despite the announcement of a cease-fire earlier this month and an agreement to enter peace talks with Nepal's new government.

On Saturday, the Nepali Congress party, the nation's largest political group, urged the Maoists to stop extortion.

Maoists been extorting money to fund their war against monarchy since they began the fighting in 1996.

Last month, the Maoists declared a ceasefire after King Gyanendra gave in to weeks of street protests and handed power back to political parties.