arrow-line asset-bg bars-line calendar-line camera-line check-circle-solid check-line check-solid close-line cursor-hand-line image/svg+xml filter-line key-line link-line image/svg+xml map-pin mouse-line image/svg+xml plans-businessplans-freeplans-professionals resize-line search-line logo-white-smimage/svg+xml view-list-line warning-standard-line

Death and Revolutionary Taxes: Maoist Extortion in Asia

Maoist militants in Asia continue to fund their operations through so-called “revolutionary taxes,” underscoring the persistent threat of far-left extortion in the Philippines, India and Nepal, writes Rob Attwell.

Fundraising, Maoist Style

In 1929, under intense pressure from a Nationalist Kuomintang military offensive, Chairman Mao Zedong, leader of the Chinese Communist Party (CCP), wrote a “fundraising letter” to the merchants of Jiangxi Province. In the letter, Mao demanded that the merchants provide the CCP with shoes, socks, cloth and USD 5,000 (around USD 73,500 in today’s money) to pay its soldiers’ salaries. Mao backed up these demands with threats of violence, saying “if you ignore our requests, it will be proof that [you] merchants are collaborating with the reactionaries…. In that case, we will be obliged to burn down all the reactionary shops. Do not say that we have not forewarned you.”

Although Maoist extortion of this nature declined in China after the CCP’s 1949 victory over the Kuomintang government, the practice remains prevalent elsewhere in Asia. With a decline in Chinese support for global revolutionary warfare after Mao died in 1976, non-Chinese Maoist insurgent groups began to rely on extortion as their primary source of funding. Many of these groups, which are still active in parts of Asia, euphemistically refer to extortion as “revolutionary taxes.”

Modern Maoism

Contemporary Maoist groups operating in Asia include the following:

The New People’s Army (NPA). Active across the Philippines, the NPA began its anti-government insurgency in 1969. To date, the fighting has caused nearly 50,000 deaths. In June 2019, the group threatened to attack the PHP 18.7 billion (USD 365 million) Kaliwa Dam construction project in Quezon Province, which happens to be funded by a Chinese overseas development agency. While the NPA says it is targeting the dam over potential environmental damage and the alleged failure to consult indigenous groups living in the affected area, Philippine authorities allege that these recent threats were prompted by the refusal of construction companies working on the project to make extortion payments. The NPA frequently demands that firms, often in the construction, energy and mining sectors, pay “revolutionary taxes.” They also demand that residents in conflict zones provide them with food and other supplies. Exact figures regarding NPA extortion earnings are unavailable. Philippine authorities say these earnings vary region by region, amounting to millions of USD in annual revenue. In the Panay region, for example, officials estimate that the NPA generates between PHP 30 million and PHP 40 million (USD 583,000 to USD 777,000) in annual revenue through extortion.

The Naxalites. India’s Maoist movement, locally referred to as the Naxalites, has waged an anti-government insurgency since 1967, resulting in tens of thousands of deaths. The Naxalites are concentrated in the so-called “Red Corridor,” which stretches across much of central and eastern India and includes, among others, Chhattisgarh, Jharkhand, Odisha and Bihar states. Most recently, the group killed five Indian police officers during an ambush in Jharkhand State in June 2019 and injured dozens more in a series of roadside bombings in May. Despite the presence of higher profile conflicts in India, notably the ongoing dispute over Kashmir, Indian security officials consistently describe the Naxalite insurgency as the country’s biggest internal threat. Like the NPA in the Philippines, the Naxalites fund their activities through extortion and often target the construction, mining and energy sectors. Indian officials estimate that the Naxalites generate USD 28 million in annual revenue through extortion, although Prime Minister Narendra Modi’s  2016 demonetisation policy has reportedly had a detrimental impact on their earnings.

Communist Party of Nepal (CPN). Between 1996 and 2006, Maoist insurgents waged a militant campaign against the former royalist government resulting in nearly 20,000 deaths. After the war ended, the Maoist movement fractured into numerous parties before being incorporated into the civilian government. Some militant factions, however, increasingly view Maoist participation in democratic politics as a betrayal of revolutionary ideals and urge a return to armed conflict. The CPN under the leadership of Netra Bikram Chand, or “Biplav,” is one of these groups. CPN militants were responsible for a series of deadly bombings at several small local businesses in Kathmandu in May 2019 and outside the offices of a state-run telecommunications firm in February 2019, which together killed five people. The CPN regularly demands extortion payments from local businesses and privately run schools. While figures regarding its earnings are unavailable, some local municipalities report that CPN cadres demand that local governments pay the group up to two percent of their annual budgets.

Maoist groups resort to a variety of violent means to enforce payment.

Non-Payment Triggers Violence

If victims are unwilling or unable to pay, Maoist groups resort to a variety of violent means to enforce compliance. In the Philippines and India, NPA and Naxalite militants regularly sabotage heavy equipment. Arson attacks are especially common, and militants sporadically take staff hostage. Meanwhile, in Nepal, CPN members stage rudimentary improvised explosive device (IED) attacks to intimidate businesses and local government officials into paying. While Maoist militancy may seem like a relic of the Cold War, it remains a persistent threat to commercial operators in the Philippines, India and, increasingly, Nepal. In the former two countries, Maoists have been fighting their respective governments for over 50 years, while in Nepal, the postcivil war government is facing increased violence from more radical factions. Throughout their histories, these groups have funded themselves through “revolutionary taxes” and it seems likely that Maoist extortion will continue to pose a challenge in these three countries.

S-RM’s GSI is the simplest way to get a fresh perspective on the security risks affecting you, your work, and your travel.