US embassy cable - 04KATHMANDU1319

C O N F I D E N T I A L SECTION 01 OF 03 KATHMANDU 001319 
 
SIPDIS 
 
DEFT FOR SA/INS 
 
E.O. 12958: DECL: 07/14/2014 
TAGS: PREL, PTER, PINS, PINR, PREF, BH, PK, NP, India Relations 
SUBJECT: NEPAL: DEPARTING INDIAN AMBASSADOR OFFERS HIS 
VIEWS ON NEPAL 
 
REF: KATHMANDU 1030 
 
Classified By: Ambassador James F. Moriarty; Reasons 1.4 (b/d) 
 
 1. (C) SUMMARY:  In a meeting with Ambassador Moriarty on July 
13, outgoing Indian Ambassador to Nepal (and future Indian 
Foreign Secretary) Shyam Satan stressed that a negotiated 
settlement with the Maoists resulting in multiparty democracy 
could only be achieved if there were political unity between the 
parties and the Monarchy.  Negotiations should only be resumed 
when the Maoists are genuinely ready to compromise.Third-parties 
could help the process, but premature and unbalanced involvement 
would further strengthen the Maoists' hand.  To help pressure the 
Maoists, India had increased its assistance to Nepal over the 
past six months, and would continue to do so.  Successful arrests 
of Maoists in India were the result of the improved security and 
intelligence relationship.  Meanwhile, the coalition government 
was a stepforward and a blow to Maoist plans.  On the larger 
South Asia front, Satan indicated that India had become directly 
involved in the Bhutanese refugee issue, and hoped New Delhi's 
rappraochement with Pakistan would continue. 
END SUMMARY. 
 
================================ 
NEPAL'S DOMESTIC POLITICAL SCENE 
================================ 
 
2. (C) Saran complimented Prime Minister Deuba's success in 
forming a broad-based coalition of mainstream political parties. 
India had strongly pressured King Gyanendra to bring the parties 
back into the political process, and although it appeared the King 
would step back in if he believed things were going awry, the 
results were thus far positive.  Prior to resuming negotiations 
with the Maoists, the legitimate political forces should agree 
that the desired outcomes must be a negotiated settlement resulting 
in multiparty democracy under a constitutional monarchy.  The next 
piece to the puzzle was to get Girija Prasad Koirala and his Nepali 
Congress to join the government.  This would complete the inclusion 
of the larger mainstream political parties in the governing process, 
and would create a formidable and unified pro-democratic force in 
opposition to the Maoists.  Since the formation of the four-party 
government in early July, Koirala had flirted with the Maosists, 
Satan stated, but as Koirala had no status and nothing to offer 
them, ultimately Koirala would have to join the government or risk 
becoming irrelevent.  During his recent visit to New Delhi, Indian 
officials, includi ng the Foreign Minister, had consistently urged 
Koirala to join the coalition.  (NOTE:  Satan was categorical that 
India had not encouraged contact between Koirala and the Maoists, 
but added "we were aware that there was telephone contact between 
them while Koirala was in India."  END NOTE). 
 
3. (C)  Turning to the Monarchy, Satan described the King as a 
bright man and sharp tactician, but was unsure whether the King 
possessed a longer-term strategic vision for Nepal.  Still, the 
King had correctly brought the parties back into the political 
process, and was at least doing what he believed best for the 
country. The Crown Prince, on the other hand, was a disaster and 
an embarassment.  (NOTE:  Local media reporting following the 
weekend of July 10 carried two stories related to Crown Prince 
Paras, one describing a drunk and "infuriated royal family member" 
firing a pistol into the air outside a disco after a celebration 
for the King's Birthday on Friday; the other, describing security 
forces almost opening fire on the Crown Prince after he crashed his 
speeding car near an intersection in Pokhara early Sunday morning. 
END NOTE). 
It was hard to ever imagine him sitting on the throne, and even the 
Royal Nepal Army had expressed discomfort at that thought. 
 
================================== 
THE INSURGENCY AND THE WAY FORWARD 
================================== 
 
4. (C) Satan believed that a complete military victory over the 
Maoists was not possible, particularly given the physical terrain 
of Nepal.  While a negotiated settlement was therefore required, 
however, the Maoists believed they were still gaining ground and 
would thus not engage in good-faith negotiations. 
(Satan had been told that in the last round of negotiations, the 
government had even accepted the Maoist's fundamental demand of 
holding a constituent assembly as long as the fundamentals of 
multiparty democracy and constitutional monarchy remained 
non-negotiable; the Maoists had, however, walked away from this 
concession.)  Until the Maoists were forced to realize they could 
not win, they would not be willing to make any meaningful concessions. 
Maintaining military pressure on the Maoists and avoiding political 
factionalization --that could give the Maoists something to exploit 
-- was critica1.  The constellation of anti-Maoist forces was coming 
together; pressure was building through the formation of the coalition 
government and the military was making some progress. 
 
5. (C) Several obstacles could derail this progress, Satan cautioned. 
For example, while there would clearly be roles for outside powers to 
play in the future, external involvement and any pressure to force 
premature negotiations would be disastrous.  Unless the Maoists were 
willin g to make concessions and the government was fully prepared 
intellectually to undertake negotiations, negotiations would fail or 
an externally-forced settlement might lead to an eventual Maoist 
takeover of Nepal.  Most European capitals were probably aware of 
this danger, Satan believed, but the UN's Political Department was 
extremely problematic.  Representatives from the UN Political 
Department had been in regular contact with the Maoists and were 
focused on keeping the channel open and on brokering a deal.  Afraid 
to alienate the Maoists, UN Political Department representatives 
refused to criticize the horrendous human rights abuses the Maoists 
had engineered, while at the same time being hypercritical of the 
government.  Given this history, it was doubtful whether the UN could 
ever play a mediating role in the conflict. 
 
6. (C) Satan stressed that the Maoists represented a problem for both 
India and Nepal: India therefore had and would continue to increase 
its military and intelligence assistance to Nepal.  Over the past six 
months, for example, security and intelligence forces on both sides of 
the border were improving cooperation, and a recently established 
defense cooperation body to oversee the hardware, training and 
intelligence in the bilateral security assistance relationship would 
also help.  While the Nepalis had initially been skeptical of Indian 
intentions and reticent to share intelligence, improved intelligence 
sharing had led to the arrests of high-level Maoists in India, 
creating many true believers in the GON.  Now the GON was enthusiastic 
about the cooperation, and each of the three Nepali army divisions 
along the border were feeding intelligence directly to a counterpart 
Indian intelligence center.  "Instead oflooking for a needle in a 
haystack, we now have the intelligence necessary to make arrests," 
Satan stated.  (NOTE: Saran stated that he had sent a strong 
recommendation to the GOI to give the U.S. access to Maoist Kumar 
Dahal as requested Reftel.  END NOTE). 
 
================== 
BHUTANESE REFUGEES 
================== 
 
7. (C) Saran stated that the Bhutanese refugee camps in Nepal were 
becoming a breeding ground for Maoists and further delay in 
resolving the refugee problem represented a security threat to India. 
As a result, India was pressuring both sides to find a compromise 
on the language of the GON's report on the December 22 incident at 
the Khundunabari refugee camp.  Unfortunately, NGO's and UNHCR 
representatives taking an absolutist and uncompromising approach to 
the problem had made India's efforts towards compromise more difficult. 
 
======== 
PAKISTAN                                       . 
======== 
 
8. (C) Soon-to-be Indian Foreign Secretary Satan cold the Ambassador 
that India was worried about a recent increase in infiltrations in 
Kashmir, concerned it might signal a Musharraff decision to appease 
fundamentalists in Pakistan following the sacking of Prime Minister 
Jamali.  Nevertheless, Satan made it clear that India hoped the 
rapprochement with Pakist an would continue if at all possible. 
 
======= 
COMMENT 
======= 
 
9. (C) COMMENT: Saran had an excellent relationship with this Embassy 
and proclaimed his eagerness to continue working closely  with the U.S. 
in his new position.  His assessment of Nepal's political lands cape 
at the end of his busy tour here is valuable, and largely tracks with 
our own.  The formation of the Deuba-led coalition government appears 
to have weakend the Maoist position, and any further possible 
coalescing of pro-democratic forces -- such as the entry of Koirala's 
Nepali Congress into the coalition -- would further reduce Maoist 
options.  However, while we will try to nudge  Koirala in that 
direction, the likelihood of his joining the Nepali Congress Party to 
the coalition is anything but clear.  Should Koirala remain outside 
the government, his machinations will only strengthen the Maoist 
resolve not to compromise. Meanwhile, Satan's concerns vis-a-vis the 
Crown Prince are reflected in every quarter in Nepal; ordinary Nepalis 
quietly loathe Paras, and it is debatable whether he will ever become 
King. END COMMENT. 
MORIARTY