US embassy cable - 05NEWDELHI2951

C O N F I D E N T I A L SECTION 01 OF 02 NEW DELHI 002951 
 
SIPDIS 
 
E.O. 12958: DECL: 04/19/2015 
TAGS: PREL, KDEM, PTER, NP, IN, India-Nepal 
SUBJECT: REGIONAL DIALOGUE WITH A/S ROCCA: NEPAL 
 
Classified By: PolCouns Geoff Pyatt.  Reasons 1.4 (B, D) 
 
1.  (C) Summary: During their April 18 Regional Dialogue 
discussion, A/S Rocca and MEA officials reviewed recent 
developments in Nepal, with the GOI offering a pessimistic 
assessment of the King's intentions.  (See septel for 
Bangladesh and Sri Lanka portions).  Following the Indian 
Ambassador's April 15 meeting with the "unconcerned" King 
Gyanendra, MEA Joint Secretary Ranjit Rae (Nepal, Bhutan) was 
concerned that the Palace had no plan for a return to 
democracy in Nepal.  Despite the "security stalemate," Rae 
did not think the Maoists could prevail, and was doubtful 
that China or Pakistan would step in to supply the RNA.  He 
described the political parties as "seriously divided" and in 
need of a common agenda, and the country's economic outlook 
as increasingly bleak.  A/S Rocca stressed our commitment to 
see democracy restored, suggesting the US and India should 
coordinate messages to the political parties in an effort to 
develop a reconciliation agenda.  End Summary. 
 
Indian Ambassador: King "Unconcerned" 
------------------------------------- 
 
2.  (C) Rae led off the discussion with a readout on Indian 
Ambassador Shiv Shankar Mukherjee's 80 minute April 15 
meeting with King Gyanendra.  The King, who did most of the 
talking, restated his commitment to multiparty democracy, but 
Rae doubted his sincerity, and said that the meeting resulted 
in no forward movement.  The confident and relaxed King 
informed Mukherjee that the situation in Nepal had improved, 
and referred to international insistence on democracy in 
Nepal as a "passing phase."  Explaining that detentions were 
necessary for security reasons, and that the RNA is not 
involved, the King noted his intention to strengthen 
counterterrorism efforts and the need for the parties to 
clarify their position on terrorism, democracy, and other 
issues. 
 
Security Stalemate 
------------------ 
 
3.  (C) A/S Rocca laid out US policy on Nepal, specifically 
that our primary objective was not to allow the Maoists to 
gain the upper hand.  She explained that military assistance 
is suspended, and asked Rae where India thought the "tipping 
point" was in the military situation.  Describing the 
military situation in Nepal as a "stalemate," Rae emphasized 
that since the February 1 coup, security in the country had 
declined.  While the Maoists are not in a position to take 
and hold urban centers (he noted that only 40 percent are 
armed), they are capable of making their presence felt.  The 
RNA has been in a "reactive" mode, and has not moved 
forcefully to take on the insurgents.  Despite that, the Army 
was stronger than it used to be, in part because of decisions 
by the Palace to let the RNA call the shots with district 
administrations.  New Delhi had assessed that the RNA could 
sustain itself for three months after the GOI ceased military 
support.  Rae explained that New Delhi had suspended its 
program to train 10,000 Nepali police after the last batch of 
500 returned home. 
 
4.  (C) Rae predicted that Pakistan and China would not 
support the GON militarily, but expressed concern that 
continued USG supply of non-lethal equipment would send an 
unintended positive signal to the King.  Rae highlighted the 
King's upcoming trips to China and Jakarta for the Bandung 
Conference anniversary, at which the GOI is undecided on a 
meeting between PM Manmohan Singh and Gyanendra.  On 
rescheduling the SAARC Summit, Rae would not be drawn out on 
the specific linkage between India's attendance and the 
King's policies. 
 
Parties Should Not Join the Maoists 
----------------------------------- 
 
5.  (C) Commenting on the political situation, Rae stated 
that agitation was still limited to Maoist party cadres, with 
little evidence of broadening support.  Within the parties, 
which are "seriously divided," younger members tend to favor 
cooperation with the Maoists, which the insurgents are 
pressing for to gain legitimacy.  The Indian message to the 
parties was one of caution against such an association, Rae 
noted, remarking that the parties need to decide on a common 
agenda for reconciliation and what they want to fight for. 
The Maoists have guns and the parties do not, he noted.  Rae 
expressed disappointment that the King was using the 
interregnum to consolidate his power through the appointment 
of District Commissioners that report directly to him, and 
other moves to revive direct administration. 
 
Don't Forget the Economy 
------------------------ 
 
6.  (C) Rae said the increasingly bleak economic outlook in 
the country since February 1 was less of a focus for the 
international community, but also very important.  While life 
in Kathmandu was "normal," a series of Maoist strikes had 
been effective in other parts of the country.  Indian 
businesspeople were complaining to the GOI, and hotel 
occupancy rates had plunged to 10-15 percent. 
Support the Reconciliation Process 
---------------------------------- 
 
7.  (C) A/S Rocca said we are waiting to hear about the 
King's "roadmap" when we reach the 100-day mark, but did not 
as yet have any indication that there is such a roadmap, and 
suggested that the US and India should continue to coordinate 
messages to the political parties in their effort to come up 
with an agenda for reconciliation.  Rae agreed, pointing out 
that privately that had been GOI policy.  Rae told A/S Rocca 
that for now the GOI would continue to call for an end to the 
emergency and media restrictions, along with cooperation 
between the Palace and parties, but would resist calls for 
the GOI to endorse any particular formulation for reviving 
the democratic process. 
 
Comment 
------- 
 
8.  (C) This conversation reflected the deepening level of 
candor in the US-GOI exchange on Nepal, and the high priority 
that New Delhi places on our collaboration in that area.  It 
was clear from the Indian presentation that the MEA remains 
deeply disappointed with the King's lack of movement towards 
democracy, and is far from a decision to normalize their 
assistance relationship. 
 
9.  (U) A/S Rocca has cleared this message. 
BLAKE