US embassy cable - 05NEWDELHI2717

C O N F I D E N T I A L SECTION 01 OF 04 NEW DELHI 002717 
 
SIPDIS 
 
E.O. 12958: DECL: 04/10/2015 
TAGS: PGOV, PREF, PREL, PHUM, KDEM, IN, NP, BT, CU, UNHCR, Bhutan 
SUBJECT: RGOB NON-COMMITTAL ON SUPPORT FOR UNCHR RESOLUTION 
AGAINST CUBA, RESOLVED ON FURTHER DEMOCRATIZATION 
 
 
Classified By: DCM Robert O. Blake, Jr., for Reasons 1.4 (B, D) 
 
1.  (C) Summary:  In an April 7 meeting with Bhutanese 
Foreign Secretary Neden Zangmo, DCM urged the Royal 
Government of Bhutan (RGOB) to support a UNCHR resolution 
against Cuba noting that Bhutan's vote could be decisive. 
The FS was non-committal citing the support Cuba had provided 
Bhutan in the ongoing Bhutanese refugee matter.  The FS also 
noted that the Bhutanese Parliament is expected to ratify the 
Chemical Weapons Convention (CWC) in June, and explained that 
the December 22, 2003 disturbances in the refugee camps in 
Nepal and the introduction of Bhutan's draft constitution had 
slowed Bhutan's implementation of its commitment to 
repatriate Category 1 refugees from Nepal.   In a later 
meeting with the UNDP resident representative, the res rep 
said most Bhutanese oppose the draft constitution's proposed 
introduction of a multi-party system because of skepticism 
about the recent checkered history of multi-party democracy 
in Nepal and Bangladesh.  The editor of Bhutan's national 
newspaper, Kuensel, agreed but predicted that the King is so 
trusted that he is likely to convince the Bhutanese people to 
approve the constitution, perhaps as a gift to the King in 
2007 on the 100th anniversary of the Monarchy.  End Summary. 
 
 
Meeting with Foreign Secretary 
------------------------------ 
 
2.  (C) DCM opened the meeting by welcoming the strong 
relations between the U.S. and Bhutan, expressing 
appreciation in particular for Bhutan's ratification of the 
Article 98 Treaty.  The Foreign Secretary responded that 
while Bhutan does not have diplomatic relations with the Perm 
5, it nonetheless depends on the goodwill and friendship of 
the United States and other Perm 5 members.  She noted that 
she herself had participated in a 1990 International Visitors 
Program visit to eight states in the United States that she 
had benefited a great deal from. 
 
Tourism/Construction Now Employer of Choice 
------------------------------------------- 
 
3.  (C) DCM asked the Foreign Secretary about Bhutan's top 
priorities.  FS responded that providing youth employment is 
the RGOB's major challenge.  Whereas previously young 
graduates could count on a job in the civil service, the King 
had capped the civil service size at 17,000 positions to keep 
government small, compact and efficient.  This meant that the 
bulk of new job opportunities would need to come from the 
private sector.  Asked which industries could provide new 
jobs, the FS identified construction and tourism as key 
sectors.  She noted proudly that 3,000 tourists had visited 
Bhutan in the first quarter 2005 compared to 9,000 for all of 
2004.  The RGOB's priority remained to attract a relatively 
low volume of high spending tourists.  DCM commented that the 
new Aman resorts in Bhutan had attracted widespread favorable 
press in the U.S. that would help Bhutan in this goal. 
 
Royal Road Show to Consult People on Draft Constitution 
--------------------------------------------- ---------- 
 
4.  (C) Regarding constitutional reform the FS placed the 
draft constitution in the context of the King's policy to 
steadily devolve power from the monarchy to democratic 
institutions.  The draft constitution was now being 
circulated to every household in Bhutan after which the King 
plans to visit every district to hear the views of his 
people.  The constitution's highlight is the creation of 
multi-party system.  The FS noted that the introduction of 
the constitution had been delayed by the 2003 campaign 
against the ULFA.  She predicted the King's consultations 
would take at least a year, possibly longer.  She confessed 
to a certain personal apprehension about the introduction of 
political parties since she and most Bhutanese reposed great 
confidence in the King and concern about the experience of 
political parties in other parts of South Asia (see below for 
UNDP comments that many Bhutanese share this apprehension). 
Indian Hydro Projects Boost Economy 
----------------------------------- 
 
5. (C) With respect to the economy the FS commented that 
growth continues between 5-6% annually.  She noted that the 
coming on line of the Tala hydro power project in 2006, 
funded through a mixed credit from the Government of India 
would give a further boost both to growth and exports, of 
which power was by far the most important.  The FS candidly 
noted the Bhutanese hydro power projects had boosted Bhutan's 
per capita income to $800, but that most families were poorer 
than this figure implied.  (Comment: CIA's Factbook cites a 
$1,300 per capita GDP. In any case, this figure  will climb 
dramatically in the next few years as new hydro projects come 
on line. End Comment.) 
 
6.  (C) DCM inquired about the RGOB's progress in its 
campaign against ULFA.  The FS hailed the success of the 2003 
campaign in removing all 30 camps from Bhutanese territory. 
She reported that the RGOB continues to have regular 
counter-terrorism meetings with India to monitor the ULFA 
threat.  As to the situation in Bangladesh, she noted that 
Bangladesh is Bhutan's largest trading partner after India 
and that instability there does have an impact on Bhutan. 
 
Complications For Repatriating Bhutanese Refugees 
--------------------------------------------- ---- 
 
7.  (C) Turning to Nepal the DCM noted that the United States 
is disappointed with the lack of progress in repatriating 
Bhutan Category 1 refugees from the refugee camps in Nepal. 
The FS responded that Bhutan remains committed to 
repatriating Category 1 refugees but that the December 22, 
2003 incidents in the camps had slowed down the process.  She 
further noted that Nepal also had to agree and that Bhutan 
had heard nothing from the Nepalese.  She added that Bhutan 
is at a delicate juncture with the introduction of a new 
constitution and can ill afford instability at this sensitive 
stage.  She noted that FM Wangchuk had explained this in a 
recent call with AS Rocca, in which they had agreed that the 
State Department would instruct Ambassador Mulford to meet 
with Bhutanese Ambassador Tshering in Delhi on both Bhutanese 
refugees and Cuba human rights issues. 
 
UNCHR Vote on Cuba 
------------------ 
 
8.  (C) DCM expressed appreciation for Bhutan's abstention on 
the 2004 Cuba UNCHR resolution and predicted another very 
close vote on April 14-15.  He outlined evidence that Cuba's 
human rights record had deteriorated in the last year and 
urged Bhutan to support a resolution condemning Cuba for its 
abysmal record.  FS replied that even an abstention poses a 
very difficult problem for Bhutan because of the support Cuba 
has extended Bhutan on the Bhutanese refugee issue.  The DCM 
reiterated that Bhutan's vote would be critical to the United 
States and many other countries and could be decisive. 
 
9.  (C) Before leaving DCM urged that Bhutan ratify the 
Chemical Weapons Convention as soon as possible.  The FS 
noted that she expects the Bhutanese parliament to ratify the 
CWC in June. 
 
Meeting with UNDP 
----------------- 
 
10.  (C) DCM subsequently met for a wide-ranging discussion 
with UNDP Resident Representative Renata Lok Dessallien 
(protect) who has lived in Bhutan for three years.  DCM again 
began by hailing the warm but limited relations between the 
U.S. and Bhutan.  Dessallien laughed and said Bhutan has its 
hands full managing relations with India and China, and is 
understandably reluctant to establish relations with the Perm 
5.  She explained that India is active at all levels in 
Bhutan, sometimes excessively so.  She noted, for example, 
that when the King had asked foreign governments and 
international institutions such as the UNDP for advice on the 
draft constitution three years ago, India immediately 
dispatched constitutional advisors to Bhutan and made clear 
that it would not look favorably on Bhutan receiving 
assistance from other countries.  As a result, the UNDP had 
worked quietly behind the scenes to arrange for informal 
advice that took place under the Indian radar. 
 
Skepticism on Multi-party Democracy 
----------------------------------- 
 
11.  (C) DCM remarked that he had detected skepticism on the 
part of Bhutanese officials regarding the King's intention to 
introduce a multi-party system into Bhutan.   Dessallien 
responded categorically that there is not a single interest 
group in Bhutan that favors radical political change.  She 
said the whole country has been "buzzing" since the draft 
constitution was released on March 26.  Most Bhutanese that 
she had spoken with had questioned where in South Asia 
multi-party democracy had succeeded, citing the problems in 
Nepal, Bangladesh and even India where Bhutanese see a 
functioning democracy marred by growing corruption and very 
slow decision making.  She said the King is banking on 
convincing his countrymen on the need for further devolution 
of power to guard against capricious actions by the Monarchy 
such as those by the King in Nepal.  (Note: In a subsequent 
lunch with the editor of Bhutan's national newspaper, 
Kuensel, the editor agreed with Dessallien's views but 
predicted that the King is so trusted that he is likely to 
convince the Bhutanese people to approve the constitution, 
perhaps as a gift to the King in 2007 on the 100 anniversary 
of the Monarchy.  End Note)  Highlighting other elements of 
the King's efforts to preserve good governance Dessallien 
cited the King's strong efforts to punish corruption in 
government and establish special commissions to address 
corruption and human rights.  She also praised the penal code 
passed in 2004. 
 
Economic Challenges:  Raise Literacy, Diversify Economy 
--------------------------------------------- ---------- 
 
12.  (C) Dessallien said Bhutan is making good economic 
progress but faces important challenges.  She expressed 
concern about low literacy and the poor quality of primary 
education.  She was less concerned about employment, since 
unemployment is only about 5%.  Bhutan's greater challenge is 
to diversify its economy.  The country faces structural 
obstacles because of its small market and low economies of 
scale that provide few opportunities for private companies. 
She noted that some Bhutanese hope to develop niche markets, 
such as call centers but also explained that Bhutan's unique 
ethos of "gross national happiness" and its Buddhist 
philosophy sometimes take priority over private initiatives. 
A private American effort to establish a small company in 
Bhutan to manufacture and market fly fishing hooks and flies, 
for example, had foundered when Bhutanese groups had pointed 
out to the government that such equipment would kill fish 
(fishing is heavily restricted in Bhutan). Project advocates 
countered that most fly fishermen catch and release their 
fish, but this argument did not carry the day. 
 
Cable TV ) Too Much of a Good Thing? 
------------------------------------ 
 
13.  (C) DCM asked how the introduction of cable television 
and the internet in 1999 had affected Bhutanese society. 
Dessallien responded that while internet usage was still 
relatively small, many Bhutanese households now had access to 
cable and that the sudden introduction of half naked models 
on Fashion TV, Indian soap operas and western movies had had 
a revolutionary and (many Bhutanese people believe) negative 
impact.  Drug use, sexually transmitted diseases and AIDS all 
were on the increase, although precise figures are not 
available. 
 
US Scholarships Needed 
---------------------- 
 
14.  (C) DCM asked how the United States might usefully help 
Bhutan if funds become available.  Dessallien responded that 
there is universal admiration in Bhutan for America's higher 
education system and that scholarships were in great need and 
would have a lasting and sustained impact on Bhutan.  She 
cited Australia's strong program over many years to provide 
scholarships for Bhutanese.  Asked how the Australians screen 
potential applicants with no staff on the ground, Dessallien 
responded that the Royal Civil Service Commission does a good 
and unbiased job of doing so. 
MULFORD