US embassy cable - 02KATHMANDU1626

UNCLAS SECTION 01 OF 02 KATHMANDU 001626 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR SA/INS 
DEPARTMENT PLEASE ALSO PASS TO USAID 
LONDON FOR POL - RIEDEL 
 
E.O. 12958: N/A 
TAGS: PGOV, EAID, NP, Government of Nepal (GON) 
SUBJECT: NEPALI GOVERNMENT HANDS LOCAL GOVERNMENT OVER TO 
BUREAUCRATS 
 
REF: KATHMANDU 1387 
 
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SUMMARY 
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1.  (SBU)  Having allowed the terms of all locally elected 
officials to expire as of July 16 (reftel), the Government of 
Nepal (GON) has announced plans to transfer local bodies' 
functions and authority to civil servants until elections can 
be held in April and new representatives installed in July. 
GON officials--reportedly including the Prime Minister 
himself--have acknowledged that the decision not to extend 
the local bodies' terms was politically motivated.  The 
Opposition, which controlled the majority of the local 
bodies, has already signaled its displeasure with the GON 
plan.  Several donors, especially those with large programs 
committed to strengthening local governments, have expressed 
frustration with the GON action and threatened to withhold 
funding.  The re-election next year of these critical 
elements of grass-roots democracy is likely to require 
substantial moral and material support from the international 
community.  End summary. 
 
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CIVIL SERVANTS TO TAKE OVER LOCAL BODIES 
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2.  (U)  On August 15 the Cabinet decided to appoint civil 
servants to assume the responsibilities and functions of 
locally elected officials, whose terms were allowed to expire 
July 16 (Reftel).  The Cabinet's decision not to extend the 
five-year terms of the local bodies for another year had left 
Nepal's 75 District Development Committees (DDCs), 58 
municipalities, and 3,912 Village Development Committees 
(VDCs) with no functioning government--and thus no ability to 
recieve and disburse funds--for a month. 
 
3.  (U)  The August 15 announcement followed an abortive 
effort by the Government of Nepal (GON) to elicit an 
all-party consensus on how to administer local government in 
the absence of locally elected bodies.  All Opposition 
parties, with the exception of the National Democratic Party 
(RPP), boycotted an August 11 all-party meeting called by the 
GON on the subject. 
 
4.  (U)  According to the Cabinet's plan, civil servants from 
ministries with offices at the local level (Agriculture; 
Home; Education; Health; Physical Works; Local Development; 
and Women, Children, and Social Welfare) will take the place 
of elected local bodies officials.  Each DDC will be replaced 
by a seven-member team of civil servants, headed by the Local 
Development Officer (LDO) in the role of the DDC Chairman; 
each municipality by a five-member team, with the 
municipality's Executive Officer sitting in for the mayor, 
and each VDC by a three-member team, with the VDC Secretary 
subbing for the VDC Chairman.  (An earlier plan to include 
members of civil society organizations in these newly formed 
bodies was nixed.)  Ganga Dutta Awasthi, Joint Secretary for 
the Ministry of Local Development, acknowledged that the 
Maoists had disrupted the operations of many rural VDCs--700 
VDC offices have been destroyed in the course of the 
insurgency--but he expressed confidence in the GON's ability 
to recruit adequate numbers of bureaucrats to serve in these 
remote areas.  The Ministry already has applied to the Civil 
Service Commission to fill 350 vacant VDC Secretary slots. 
 
5.  (U)  Awasthi emphasized the temporary nature of the new 
arrangement, which will remain in place until new local 
elections can be held next year. The GON has committed to 
hold these elections by April, he noted.  Since local 
elections are a lengthy and cumbersome process--DDCs can only 
be elected after VDCs are in place--the new local bodies are 
unlikely to be in place until July 2003 at the earliest, he 
conceded. 
 
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OPPOSITION, SOME DONORS UNHAPPY 
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6.  (SBU)  The Cabinet decision to allow the local bodies' 
terms to expire unleashed a firestorm of criticism from the 
Opposition, as well as from several donors.  Jhala Nath 
Khanal, a Standing Committee Member of the Communist Party of 
Nepal - United Marxist Leninist (UML), which controlled the 
majority of such bodies, denounced the move as 
"anti-democratic."  Democratically elected officials at the 
village level occupy the front lines against Maoist 
insurgents, he argued, and are thus often targeted for 
intimidation and assassination.  By letting democratically 
elected local bodies expire, Khanal charged, the Nepali 
Congress government has achieved by bureaucratic fiat exactly 
what the Maoists have been trying to accomplish through their 
campaign of terror and murder:  the abolition of local 
democratic government. 
 
7.  (SBU)  Nor is the UML sounding the only note of 
discontent.  Several donors with  projects aimed at 
strengthening local government, including the Germans, Swiss, 
Dutch, Danes, and UNDP, have all expressed dissatisfaction 
with the GON decision, with some--most notably the Germans 
and Swiss--threatening to freeze disbursements for some 
projects.  Awasthi said those donors reacted too hastily, 
noting that the GON decisions both to allow local bodies to 
expire and to assume responsibility for the functions of 
those bodies after their expiration were fully in accord with 
the Local Self-Governance Act.  He believes the new 
bureaucratic arrangement will persuade these donors to resume 
disbursements.  The local head of the German aid agency, 
however, told emboff his organization will likely bypass the 
new official local bodies, working instead with user groups 
and other community organizations.  The Swiss aid director 
said his agency was still considering how to respond to the 
GON plan.  A World Bank official said that his organization 
was considering whether to withhold some budgetary support 
from the central government as a way of expressing its 
disapproval for the move. 
 
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POLITICAL MOTIVATION? 
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8. (SBU)  Adding to the donors' displeasure is the GON's 
explicit acknowledgement that party politics played a 
substantial role in the decision not to extend the local 
bodies for one year.  Officials at the National Planning 
Commission and the Ministry of Local Development have told 
emboffs that the PM and his Cabinet feared the 
Opposition-dominated local bodies would divert funding to 
support UML candidates in the upcoming national elections. 
(The Prime Minister himself reportedly admitted these motives 
to a group of donors during a recent meeting on the budget.) 
 
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COMMENT 
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9.  (SBU)  Faced with the imminent expiration of local 
bodies, the PM had two choices consistent with Nepali law: 
allowing them to lapse or extending their term for one year. 
He chose the former, primarily for admittedly partisan 
reasons.  Unfortunately, this decision follows others--the 
dissolution of Parliament, the extension of a state of 
emergency that suspends nearly all civil rights--that leaves 
Nepal's young democracy in a particularly precarious 
condition with no elected representatives at any level of 
government.  Filling the year-long vacuum at the local level 
with bureaucrats is a pale substitute, especially since civil 
servants owe their allegiance to their respective line 
ministries, rather than to local residents whose interests 
they should be advocating.  Pressure from foreign missions, 
including this one, reportedly persuaded the GON leadership 
to commit to holding local bodies elections by April.  These 
elections, like the parliamentary elections scheduled for 
November, are likely to require substantial administrative 
and financial support from the international community. 
 
 
 
MALINOWSKI