US embassy cable - 04KATHMANDU180

C O N F I D E N T I A L SECTION 01 OF 03 KATHMANDU 000180 
 
SIPDIS 
 
STATE FOR SA/INS 
LONDON FOR POL - GURNEY 
NSC FOR MILLARD 
 
E.O. 12958: DECL: 01/28/2014 
TAGS: PGOV, PTER, PREL, UK, IN, NP, Political Parties 
SUBJECT: NEPAL:  NO END IN SIGHT FOR POLITICAL IMPASSE 
 
REF: A. KATHMANDU 0046 
 
     B. KATHMANDU 0121 
     C. KATHMANDU 0122 
 
Classified By: AMB. MICHAEL E. MALINOWSKI.  REASON:  1.5 (B,D). 
 
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SUMMARY 
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1.  (C) During a January 29 meeting, the U.S., UK, and Indian 
Ambassadors agreed that there is little evidence that a 
breakthrough in the political deadlock between the Palace and 
the parties is imminent.  The three discussed possible 
long-term implications of the demonstrating student unions' 
call for an end to the monarchy (Ref C).  The Indian and 
British Ambassadors advised that both their governments are 
increasing development and military aid to Nepal.  The Indian 
Ambassador expressed concern at the recent tremendous influx 
of Nepalis, fleeing Maoist violence in the southern border 
area of the Terai, into India, noting that state governments 
in Bihar and Uttar Pradesh were beginning to complain to the 
central government.  End summary. 
 
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PARTIES AND PALACE: 
ROAD TO RECONCILIATION REMAINS ROCKY 
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2.  (C) As part of ongoing trilateral consultations, the 
Ambassadors of the U.S., UK and India met on January 29 to 
exchange views on recent developments in Nepal and share 
information on their respective policies and programs.  The 
three agreed that there seemed little immediate hope that the 
King's recent overture to the political leadership (Refs A 
and B) will help resolve the 15-month stalemate between the 
parties and the Palace.  Despite his insistence that he wants 
to focus on the "process" of forming a more representative 
government, rather than the "personalities" involved, the 
King has made clear that he is unlikely to accept any of the 
leaders of the three largest political parties (Nepali 
Congress President G.P. Koirala; Communist Party of Nepal - 
United Marxist Leninist General Secretary Madhav Nepal; or 
Nepali Congress (Democratic) President Sher Bahadur Deuba) to 
lead such a government.  Nor is National Democratic Party 
(a.k.a. RPP) Chairman Pashupati S.J.B. Rana a viable 
candidate, the three concurred, for two reasons.  First, he 
is a prominent scion of the former dynastic rulers of Nepal 
who attempted to crush the democratic movement more than 50 
years ago.  Second, it was his daughter whose star-crossed 
romantic involvement with the late Crown Prince Dipendra is 
popularly cited as the reason for the June 2001 Palace 
massacre.  With the top four politicians plainly out of the 
running, the Ambassadors noted, there appears to be no effort 
from either side to consult with one another on possible 
"second-choice" consensus candidates.  The parties had 
already rejected one such possibility--former Speaker of 
Parliament Taranath Ranabhat, who was apparently favored by 
the King.  The party leaders' own egoes and internecine 
jealousies make identifying an acceptable "second choice" 
from among party ranks extremely difficult, the envoys 
agreed.  The parties, moreover, are seeking a guarantee from 
the King that he will reduce his political intervention and 
reassume the role of a constitutional monarch--a commitment, 
the Ambassadors noted, the monarch may be unwilling to 
provide at this point. 
 
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PARTIES PEEVED AT KING'S INTERVIEW 
----------------------------------- 
 
3.  (C)  King Gyanendra's January 26 interview with Time 
Asia, which received broad and generally unfavorable coverage 
in the local press, has aggravated the situation, the 
Ambassadors noted.  (Note:  The negative coverage focuses on 
the King's accusations that the parties do not speak for the 
people, have no accountability, and that their leaders' "lack 
of foresight" and disregard for their constituents led to the 
Maoist insurgency.  In addition, some local commentators and 
politicians believe that the King's statement that "the days 
of royalty being seen and not heard are over" suggests he 
intends to pursue a more active, extra-constitutional role. 
End note.)  The King's statements seemed a bit 
confrontational and provocative, rather than conciliatory, 
they agreed.  Indian Ambassador Shyam Saran said that former 
Indian Prime Minister Chandra Shekhar, who is in Kathmandu 
for a brief visit, offered a dismal read-out from his 
meetings with King Gyanendra and NC President G.P. Koirala. 
Shekhar indicated he found the King's attitude toward the 
parties hardening, while Koirala seemed "recalcitrant" and 
not disposed toward compromise. 
 
4.  (C)  Besides the King's well-publicized interview, 
prospects for reconciliation are also complicated by the 
near-daily protests against the King, carried out by the 
student wings of the two largest parties, presumably as 
proxies for the political leadership, the Ambassadors 
concurred (Ref C).  The students' recent calls for an end to 
the monarchy are of special concern, Saran said, not 
necessarily because they reflect widespread sentiment but 
because they raise a sensitive issue that, once vocalized, 
becomes increasingly difficult "to put back in the box."  In 
the meantime, the Maoists are watching recent developments 
with interest to see if the turmoil can be turned to their 
advantage, Saran continued, adding that the insurgents 
maintain contact with the EU and the Scandinavians.  UK 
Ambassador Keith Bloomfield expressed surprise at Saran's 
report, stating that he was unaware of any recent contact 
between EU officials and the Maoists. 
 
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MAOIST TERROR IN TERAI CREATES 
PROBLEMS FOR INDIAN BORDER STATES 
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5.  (C)  Saran reported that increased Maoist activity in the 
southern Terai plains is creating a surge of refugees into 
Indian states along the Nepali border, especially Uttar 
Pradesh and Bihar.  He added that the huge increase in 
cross-border traffic has prompted complaints from state 
governments struggling to cope with the influx.  Even 
comparatively wealthy Nepalis are leaving their homes to 
avoid Maoist extortion, he said.  The enforced "fund-raising" 
seems to be paying off, Saran observed, reporting that the 
Maoists, apparently flush with cash, are offering potential 
recruits Rs 2000 (approximately USD 27) in the eastern 
district of Sindhuli. 
 
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UK, INDIA INCREASE AID 
---------------------- 
 
6.  (C) The British and Indian Ambassadors reported that both 
their respective governments have decided to increase 
security and development assistance levels.  Saran noted that 
the Indian government will increase the amounts of INSAS 
rifles, ammunition, mobile command posts and anti-mine 
vehicles for the military.  Indian and Nepali security 
agencies recently held a very useful and productive meeting 
in Bangalore, Saran said, and intelligence cooperation is 
growing.  The Indian government has also committed to 
building an additional 1000 kms of farm-to-market roads in 
the Terai region, which will ultimately be linked to 
improving road networks in Uttar Pradesh and Bihar.  Indian 
railheads will be stretched to a number of Nepal's border 
towns, and a petrol pipeline will be built from the border to 
Kathmandu, thereby significantly lowering energy costs.  In 
addition, the Indian government has decided to move rail 
heads up to the Nepali border, a hopeful flicker of life for 
the long-delayed rail link between India and Nepal. 
 
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COMMENT 
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7.  (C)  The good news about our regular consultations with 
the UK and Indian envoys is that these exchanges confirm the 
similarity of our Missions' assessment of the domestic 
political situation.  The bad news is that that assessment is 
uniformly discouraging.  Despite our respective Embassies' 
good offices and best efforts, the mood of both the Palace 
and the parties seems increasingly uncompromising and 
recriminatory.  Unfortunately, the strident public positions 
taken by both sides--protests by surrogate student wings on 
the one hand and bluntly critical comments in a prominent 
international publication on the other--only harden 
positions.  Such high-profile stances are forcing both sides 
into corners from which each will find it difficult to come 
together. 
MALINOWSKI