US embassy cable - 03KATHMANDU2318

C O N F I D E N T I A L SECTION 01 OF 03 KATHMANDU 002318 
 
SIPDIS 
 
STATE FOR SA/INS 
LONDON FOR POL - GURNEY 
NSC FOR MILLARD 
 
E.O. 12958: DECL: 11/23/2013 
TAGS: PGOV, PREL, IN, NP, Government of Nepal (GON) 
SUBJECT: NEPAL:  MORE MURMURINGS, BUT HOW MUCH MOVEMENT 
TOWARD BROADER GOVERNMENT? 
 
REF: KATHMANDU 1768 
 
Classified By: AMB. MICHAEL E. MALINOWSKI.  REASON:  1.5 (B,D). 
 
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SUMMARY 
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1.  (C)  Once again, political circles in Kathmandu are 
reporting signs that King Gyanendra may be considering 
another initiative to broaden multi-party participation in 
the government.  The Palace reportedly has sent initial 
feelers out for separate meetings with the heads of the two 
largest political parties.  The King's confidant and business 
reporter, among others, told the Ambassador that King 
Gyanendra, though satisfied with the performance of Prime 
Minister Surya Bahadur Thapa so far, might replace him if the 
parties were to forward an acceptable consensus candidate. 
Who that candidate might be remains unclear.  What does seem 
clear, however, is that neither G.P. Koirala or Madhav Nepal, 
the heads of the two largest political parties, appears to be 
in the running.  Several sources assert that Communist Party 
of Nepal - United Marxist Leninist (UML) leader Madhav Nepal 
may be gradually coming to accept the idea that he will not 
be chosen, and may see making a deal with the Palace, along 
with some of the other parties, as his best hope of shoring 
up his own party's dwindling popular support.  End summary. 
 
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SIGNS OF AN OPENING? 
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2.  (C) Political insiders in Kathmandu are once again 
reporting signs that King Gyanendra may be considering 
another overture to mainstream political parties to join an 
interim government.  Party and Palace sources have told us 
that the King had sent messages to the heads of the two 
largest parties, Communist Party of Nepal - United Marxist 
Leninist (UML) General Secretary Madhav Nepal and Nepali 
Congress President G.P. Koirala, indicating his willingness 
to meet separately with each.  On November 19 Prabhakar Rana, 
the King's confidant and business partner, confirmed to the 
Ambassador that the King, while generally satisfied with the 
performance of Prime Minister Surya Bahadur Thapa, 
acknowledges that his hand-picked appointee has thus far been 
unable to persuade members of other political parties to join 
his government.  If anything, the parties and the Palace are 
farther apart than ever, Rana opined.  The King recognizes 
that any initiative to bring the estranged parties into the 
government must come from him, Rana told the Ambassador. 
While the King reportedly said that he does not want to 
"change Prime Ministers every six months" (Thapa has been in 
office for five months; his predecessor, Lokendra Bahadur 
Chand, lasted eight), he nonetheless might consider replacing 
Thapa if the parties can agree on an acceptable candidate and 
commit to joining the government. 
 
3.  (C)  Since obtaining consensus from all seven parties 
might be difficult, if not impossible, the King, according to 
Rana, has indicated a willingness to consider a consensus 
candidate from just some of the parties.  Since it might be 
even more difficult for the parties to agree on a member from 
just one party for Prime Minister, Rana continued, it might 
be necessary to select a non-partisan person, such as an 
independent politician or a retired Chief Justice, as a 
candidate.  As examples, Rana cited three possibilities (all 
of whom held Cabinet posts during the autocratic Panchayat 
era):  former Panchayat Prime Minister Kirti Nidhi Bista, 
Rajeshwore Devkota, and Keshar Bahadur Bista (now a nominal 
member of the Nepali Congress). 
 
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MADHAV MORE MODERATE; 
G.P. STILL INTRANSIGENT 
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4.  (C)  According to Rana's assessment, the political 
parties do not want to face elections under the Thapa 
government and are seeking a face-saving "out" to their 
ongoing protest against the Palace and government.  UML 
leader Madhav Nepal seems the most amenable to joining a new 
government, Rana reported, because his party is losing 
supporters, both through murder and defecions, to the Maoists 
at the grass-roots level.  (Note:  In recent statements to 
the press, Nepal has declared that he would accept the 
reinstatement of former Prime Minister Sher Bahadur Deuba as 
a way out of the political stalemate.  End note.)  If the UML 
decides to join a new government, Rana calculates that the 
National Democratic Party (RPP), the Nepali Congress 
(Democratic), headed by former Deuba, and the Terai-based 
Sadbhavana Party,  would follow suit. 
 
5.  (C)  Nepali Congress President and former Prime Minister 
G.P. Koirala remains problematic, however, Rana said.  G.P. 
has two major liabilities that make him unacceptable as a 
candidate for PM:  his advanced age and his insistence on 
grooming his daughter (who has never run for office and is 
not even a member of the Central Committee) to take over the 
party leadership.  Only the Indians, with their long-standing 
influence over the party, can help bring G.P. on board, Rana 
stated.  Rana indicated that he plans to raise the subject 
with other embassies and seek their support for the King's 
(possible) initiative. 
 
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RPP ALSO HOPEFUL 
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6.  (C) On November 25 the Ambassador met with Pashupati 
Shumshere Rana, President of the National Democratic Party 
(RPP).  The RPP president echoed Prabhakar Rana's assessment 
that a new "opening" for engagement between the Government 
and the parties has recently arisen.  The RPP president 
credits the second-tier, "dissenting" leadership within the 
UML for helping encourage this opening through their growing 
awareness that Madhav Nepal is not a viable candidate for 
Prime Minister.  Rana claimed that the dissenters have 
managed to persuade 11 out of 14 UML Central Committee 
members that it is better for the party to make a deal with 
the Palace--and thereby obtain some participation in a new 
government--than to insist on a candidate it knows will not 
be accepted.  He predicted that the UML dissenters will be 
able to persuade the remaining Central Committee 
members--who, of course, include Madhav Nepal--to take this 
more pragmatic approach.  Once the UML decides to join a new 
government, the RPP, Nepali Congress (Democratic), and the 
Nepal Sadbhavana Party will do so too, Rana said.   The 
consensus candidate for Prime Minister is unlikely to be a 
party leader, Rana noted, but might come from within the 
second or third tiers of the leadership.  Alternatively, he 
suggested, the candidate could be someone from outside--a 
technocrat or retired civil servant or other non-partisan 
figure.  The parties could either choose a consensus 
candidate or forward a slate of suggested candidates to the 
King for him to choose from.  The Nepali Congress, headed by 
G.P. Koirala, Rana agreed, is unlikely to join a new 
government under almost any circumstances. 
 
7.  (C) Other sources have reported similar discussions to us 
over the past week.  Both Kirti Nidhi Bista and Keshar 
Bahadur Bista confirmed to the Ambassador that they had heard 
talk of a new government being formed around a non-partisan 
figure (although both said they had not been asked by anyone 
to be that figure.  Keshar Bista said he would take the job 
if asked; Kirti Bista said no one has asked).  Radha Krishna 
Mainali, a UML "dissenter" (so much a dissenter that his 
party membership has been suspended for a year)  described a 
comparable scenario to the Ambassador on November 18.  He 
reported having received "signals" from Palace intermediaries 
that the King might be considering forming a new government 
under a "non-party political person" as Prime Minister.  (We 
note that Mainali is one of the few people we can think of 
who fits this somewhat self-contradictory prescription.) 
Another prominent businessman with ties to the Palace and a 
well-informed political observer have both predicted that 
Madhav Nepal, while still grappling with the realization that 
he is unlikely to get the King's nod as PM, is too much of a 
political pragmatist to miss an opportunity to make a deal 
with the Palace.  According to these sources, Nepal knows 
that he is losing party cadres at the local level to the 
Maoists and is thus the most motivated, among all the other 
party leaders, to come to terms with the Palace.  None of our 
contacts expressed any misgivings about the viability of a 
government whose two principal partners are communists and 
royalists. 
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COMMENT 
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8.  (C)  Since the King dismissed the Deuba government in 
October 2002, we have periodically heard reports--many of 
them from Prabhakar Rana--of hopeful signs of rapprochement 
between the parties and the Palace--most recently in 
September when the parties were about to launch a coordinated 
protest against the King's "activism" (Reftel).  None of 
these reported signs, obviously, has proven fruitful. 
Proposals to name a non-party person as PM are also 
familiar--PM Chand was supposed to have been such a 
figure--and are equally unlikely to attract support from the 
party leaders, unless they can be assured that the compromise 
PM will offer no competition when elections are eventually 
called.  We have more faith in Madhav Nepal's pragmatism than 
in his statesmanship.  While it seems unlikely to us that he 
would agree to step aside--especially in order to make way 
for his rivals in the second rank--to save the nation, he 
might do so to save his party, and thus his own longer-term 
political future.  The Government has come under increased 
pressure recently from some donors to restore democracy and 
to broaden political participation in the government.  We 
hope that the murmurings of a possible "opening" between the 
Palace and the parties are not simply an effort to deflect 
such criticism and attention. 
 
MALINOWSKI