KATHMANDU, Dec 12: Nepal said on Wednesday it needed financial support from international donors to fund its battle against Maoists trying to overthrow the constitutional monarchy in the Himalayan kingdom.

“We are doing the home work for the exact amounts but we have already sounded our requirements for support to donors,” Finance Minister Ram Sharan Mahat said.

Nepal declared a state of emergency last month and ordered its army to crush rebels of the Communist Party of Nepal (Maoist) after they pulled out of four-month-old peace talks and launched a string of deadly attacks on security posts.

The Maoists, who derive their inspiration from Peru’s Shining Path guerrillas, are campaigning to set up a communist republic in the world’s only Hindu kingdom.

Mahat said Nepal, among the poorest nations in the world, had to divert about four billion Nepali rupees (52.3 million dollars) to fight the guerrillas from funds earmarked for development projects in villages.

Over 80 per cent of Nepal’s 23 million people live in villages.

Nearly half of all Nepalis live on a daily wage of less than a dollar and Western donors provide over 60 per cent of the cost of economic development projects in the country.

GROWTH HURT: In July, Nepal allocated 14.22 billion Nepali rupees for defence and the police for 2001/02 (mid-July to mid-July), an increase of over 68 per cent from 8.42 billion a year ago.

Mahat said the additional burden on defence would further widen the budget deficit that stood at 4.7 per cent of the gross domestic product in 1999/2000, the latest year for which figures are available.

The Maoist insurgency has hit tourism, a major source of income after exports and foreign aid.

“All this will definitely force the economic growth rate down from last year’s level of six per cent,” Mahat said.

Key donors to Nepal, including the United States, Britain, Japan, India and China, have backed the government crackdown on the rebels.

But diplomats said they were concerned about possible human rights violations by troops.

INDIAN COPTERS: India has donated two helicopters and arms to help Nepal’s government crush a Maoist insurgency, Indian embassy sources said on Wednesday.

The two five-seater Cheetah helicopters, which were built in the Indian city of Bangalore under a license from a French company and used by the Indian army, arrived in Nepal on Tuesday, the sources said.—Reuters/AFP