DIPENDRA BADUWAL STANDSTILL: Manakamana Cable Car in Kurintar, hotels and numerous industries across the country have been closed because of threats from militant unions affiliated with the Maoists.

When the Maoist came into government, many had expected a better business environment and improved security. However, the private sector is reeling under threats and extortion from militant unions that they say is directed by the Maoists.

Biratnagar Jute Mill has been closed since 24 November. Hulas employees are on strike from this week. Asia Distillery shut down this week. Manakamana Cable Car has been closed down for two weeks and is losing Rs 1million a day. Even in remote Mugu, the Gamgadh hydroproject has been closed since two months. The list goes on.

Prime Minister Pushpa Kamal Dahal had to personally intervene to get the Maoist trade union to call off their indefinite closure of all 60 hotels in Nagarkot that started on Wednesday.

On 20 November, Colgate Palmolive became the latest multinational to close shop in Nepal, citing labour problems as one of its reasons.

The factory was sold to Nepali investors, but the workers didn't let the new management take over.

According to FNCCI, 20 entrepreneurs have been murdered, 53 businessmen kidnapped, 54 companies closed and there have been 62 shutdowns since elections in April.

In September, the cabinet decided to the raise minimum wage of unskilled worker from Rs 3,300 to Rs 4,600. The private sector says this will put them out of business, and is trying to negotiate. The dispute is over whether higher-earning workers should also get a raise in the same proportion.

Maoist Labour Minister Lekhraj Bhatta said negotiations were on and the minimum wage issue would be decided on Sunday. Asked if his party had political reasons to pressure the private sector, Bhatta admitted: "Of course, it is natural for a political party to try to extend its influence."

Rajendra Khetan, the ML assembly member whose brewery was also hit by strikes this week, says workers are being paid as per government rules. He says the current dispute is about politics and has nothing to do with labour. "If this goes on, forget about international investors, there won't be any domestic investment either," he said.

President of FNCCI, Kush Kumar Joshi told a business conference in Pokhara on Thursday that despite the Maoists coming to power, the environment for investment in the country had not improved. "The private sector has become the target of terror, extrortion and threats are becoming unbearable," he said.

Businessmen at the conference said the extortion and decline in business would mean they would no longer be able to pay taxes to the government. "If investors are scared away, the government will not be able to meet its job creation targets," Joshi said.

Indian foreign minister Pranab Mukherjee raised the issue of industrial security and threats against Indian multinationals operating in Nepal when he met Prime Minister Dahal on Tuesday.

The current spate of strikes is also caused by an intense rivalry between unions affliated to the Maoists and the UML. Bishnu Rimal, vice president of the UML-affiliated trade union, GEFONT, denied this. But sources said the Maoist unions broke an agreement with GEFONT not to strike in the tourism sector for three years in response to a party directive.