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KATHMANDU, Jan 17 (AFP) - Nepal's Prime Minister, Sher Bahadur Deuba, said Thursday development in South Asia was being held back by terrorism.

Deuba, who is fighting a Maoist rebellion in Nepal, said much needed resources were being put into maintaining security rather than into alleviating poverty.

"The development efforts in the region have been hindered by terrorism as we are forced to divert our already scarce resources to maintain peace and security," Deuba said as he opened a two-day conference of the Centre on Integrated Rural Development for Asia and Pacific (CIRDAP) in Kathmandu.

"This has been a matter of growing concern for all of us."

He said the solution was to address the problem of insurgency through better development.

"The Nepalese government is working to address the insurgency problem on two fronts -- providing greater security to the general public and measures to remove socio-economic insurgency breeding grounds through increased level of developmental activities," Deuba said.

"These developmental activities target backward regions and disadvantaged groups."

CIRDAP, which was established in 1979 and has its central office in Dhaka, groups 13 countries: Afghanistan, Bangladesh, India, Indonesia, Laos, Malaysia, Myanmar, Nepal, Pakistan, the Philippines, Sri Lanka, Thailand and Vietnam.

In November Nepal's government declared emergency rule in order to combat renewed violence from the Maoist rebels who had broken a four-month ceasefire.

The left-wing guerrillas have been fighting to replace the constitutional monarchy with a republic since 1996.

Other countries in South Asia are also facing insurgencies. In Sri Lanka, Tamil Tiger rebels are fighting for an independent homeland in the north and east of the island for the Tamil minority. More than 60,000 people have died in the fighting since 1972.

India faces a Muslim separatist insurgency in Kashmir, which has killed more than 35,000 people since 1989. There are also a number of separatist rebel groups operating in northeastern India.

Ministers dealing with rural development attended the two-day conference which focused on ways to improve the lives of millions of poor in the region.

Mya Maung, director general of CIRDAP, said he hoped the organisation could play an important role in promoting regional cooperation in order to fight poverty and boost rurual development.

"Despite the economic progress made by CIRDAP member countries, 950 million people suffer from chronic poverty with an income of less than one US dollar a day," he said.

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