Former rebels talk of diplomacy, co-operation Even as the last votes were being counted in Nepal's election, the ideologues of the victorious Maoist party were hunkered down at their chairman's comfortable residence mapping out the nation's future. The Maoists are comfortably ahead in the vote for a 601-member constituent assembly, whose first job will be to abolish the 240-year-old monarchy. They won 120 seats of 240 up for grabs in the first-past-the-post part of the election. A further 335 seats will be chosen by proportional representation, under which the Maoists have garnered about 30 per cent of the vote, or more than 100 more seats. The remaining 26 seats will be allocated by the new government. The Maoists won on a ticket of radical change, but analysts say they must tread a careful diplomatic course between India and China and revive the economy. Oddly enough, the ultra-leftists' secret weapon is capitalism. 'It is clear that without making some capitalist economic development we cannot go to socialism, so our economic policy will be basically a capitalist economy,' said Chandra Prakash Gajurel, a member of the Maoist's Central Committee. The Maoists' pragmatic views on a 'transitional economy' seemed to settle a financial sector initially spooked by their landslide. Within a week, Nepal's stock market - which represents mostly banking interests - recovered from a 9 billion rupee (HK$1.12 billion) post-poll crash. Maoist leaders say they will focus on agricultural productivity, as well as creating jobs through tourism, IT and hydropower. They must also rebuild infrastructure. Mr Gajurel says his party will develop relations with all 'friendly countries' and try to balance its delicate geopolitical position between regional giants China and India. 'We'll maintain equidistance with our two big neighbours,' said Mr Gajurel, who is in charge of the Maoist's international affairs. One of the Maoist's campaign pledges, however, was to review 'unequal treaties', a pointed reference to the 1950 Indo-Nepal Treaty of Peace and Friendship. The controversial agreement defines the rights of citizens to move across the mostly open border, and covers bilateral trade and security. It has been the source of numerous diplomatic disputes over the years. 'We'll not unilaterally dissolve the treaty but we'll consult the Indian side,' Mr Gajurel said. 'We have already talked to them before and they are ready for a review because the treaty was signed 58 years ago and the situation has drastically changed.' Another sensitive issue will be whether the United States, which had armed the Royal Nepalese Army, takes the Maoist party off its terrorist watch lists. The tag prevents American aid programmes from directly benefitting the Maoists and will need to be reviewed if the US is to work with a Maoist-led government. On Tibet, there is no uncertainty in their position. 'We are very clear that Tibet is part of China and we'll not allow activities for the free-Tibet movement on our soil - it is not in the country's interests,' Mr Gajurel said. China may have given the Maoists their name and inspired their philosophy, but Mr Gajurel believes 'no revolution in the world can be a photocopy of another revolution'. He said his party had learnt from the lessons of 'successful' revolutions such as China and Russia, as well as 'unsuccessful' ones, such as Cambodia's Khmer Rouge.