US embassy cable - 02KATHMANDU1988

C O N F I D E N T I A L SECTION 01 OF 03 KATHMANDU 001988 
 
SIPDIS 
 
STATE FOR SA/INS 
LONDON FOR POL - RIEDEL 
 
E.O. 12958: DECL: 10/10/2012 
TAGS: PGOV, PINR, NP, Government of Nepal (GON) 
SUBJECT: NEPAL KING NAMES NEW PM, MEMBERS OF CABINET 
 
REF: (A) KATHMANDU 1955 AND PREVIOUS 
 
Classified By: DCM ROBERT K. BOGGS.  REASON: 1.5 (B,D). 
 
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SUMMARY 
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1.  (C) On October 11 King Gyanendra appointed National 
Democratic Party Leader Lokendra Bahadur Chand as Prime 
Minister.  Chand, who has been PM three times before, will 
head a caretaker government until national elections can be 
held on an unspecified date.  Biographic information on Chand 
follows in Paras 5-7 below.  The King also made a number of 
appointments to Chand's Cabinet that include some figures 
from the autocratic Panchayat era.  Other appointments 
reflect an apparent effort to broaden inclusion of various 
groups in the caretaker government.  The choice of Chand as 
interim PM appears to meet the political parties' requirement 
that the Prime Minister be a political figure while 
reflecting the conservative political preference of the 
Palace.  The members of the New Cabinet seem to meet the 
King's "clean image" criterion (Reftel).  The Nepali Congress 
and the Communist Party of Nepal - United Marxist Leninist 
(UML), the two largest parties in the country, tell us that, 
contrary to their expectations, they had no input into the 
King's announcement of the Cabinet.  End summary. 
 
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CHAND AS PM AGAIN 
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2.  (U)  On October 11--the day before the onset of the 
weeklong Dasain holiday--King Gyanendra appointed National 
Democratic Party Leader Lokendra Bahadur Chand as Prime 
Minister.  Chand, who has been PM three times before (twice 
under the former autocratic Panchayat regime and once for a 
seven-month stint after the restoration of democracy), will 
head an interim government named by the King.  That 
government will remain in place until national elections, 
indefinitely postponed because of adverse security 
conditions, can be held.  Clause 38 of the Constitution bars 
Chand (and nearly all other members of the newly-named 
Cabinet) from occupying their posts for more than six months 
because they were not members of the previous Parliament.  In 
addition to holding the post of PM, Chand will also hold the 
Royal Palace, Defense, Forest and Soil Conservation, and 
General Administration portfolios.  Chand may have selected 
in part to satisfy other party leaders' demand that the new 
PM be a political person (Reftel).  The conservative National 
Democratic Party (known in Nepal by the acronym RPP) is 
considered close to the Palace.  Many former figures 
associated with the partyless, pre-democracy Panchayat regime 
are now members of the RPP. 
 
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CABINET MEMBERS 
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3.  (U) In the same announcement, the King named Badri Prasad 
Mandal, Acting President of the Nepal Sadbhavana Party, which 
is based in the Hindi- and Bihari-speaking communities of the 
lowland Terai area of southern Nepal, as Deputy Prime 
Minister.  Mandal will also hold the Agriculture and 
Cooperatives and the Local Development portfolios.  (Note: 
Mandal is the only member of the new Cabinet who held a seat 
in the recently dismissed Parliament.  End note.)  Narendra 
Bikram Shah, a former Foreign Secretary (1986-1992) and UN 
Perm Rep (1995-1999), has been given the Foreign Affairs 
portfolio, while Dr. Badri Prasad Shrestha, a former Vice 
Chairman of the National Planning Commission during the 
Panchayat era, has been named Minister of Finance and 
Minister of Education and Sports.  Other Cabinet posts have 
been awarded to Gore Bahadur Kapangi (Women, Children, and 
Social Welfare), a member of the minority Magar community; 
Dharma Bahadur Thapa (Home, Justice, Law and Parliamentary 
Affairs), another Panchayat-era figure with a hard-liner 
reputation and a reputed close friend of the King; Dr. 
Upendra Devkota (Health, Science and Technology), a 
neurosurgeon with left-wing but otherwise nonpartisan 
leanings; Gopal Dahit, Assistant Minister for Population and 
Environment; and Anuradha Koirala, head of the 
internationally respected anti-trafficking NGO Maiti Nepal 
(Assistant Minister for Women, Children and Social Welfare). 
(Note:  The King had originally suggested a 15-person 
Cabinet.  Thus other names may be forthcoming.  End note.) 
One media source commented that all new Cabinet members seem 
to fulfill the required "clean image" stipulated by the King 
as a criterion for participation in the interim government 
(Reftel). 
 
 
4.  (U) In his radio address naming the new Cabinet, King 
Gyanendra charged the interim government with certain 
specific responsibilities, including creating a national 
consensus to improve security in the country.  He instructed 
them to uphold multiparty democracy by holding free and fair 
local and national elections.  The new Cabinet was also 
directed to to control corruption; to strengthen financial 
discipline and transparency; and to promote friendly 
relations with neighboring countries and allies. 
 
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BIO OF LOKENDRA BAHADUR CHAND 
------------------------------ 
 
5.  (SBU) Lokendra Bahadur Chand had previously been Prime 
Minister of Nepal on three separate occasions, including two 
tours as Prime Minister under the former Panchayat regime. 
He was the last Prime Minister under the Panchayat regime, 
resigning in April 1990 after only a few days in office, when 
the popular revolution against royal rule reached a 
crescendo.  Although once reviled as a royalist pupppet, 
Chand is now seen as an affable politician, who writes well 
and conducts himself with the decorum appropriate to an elder 
statesman.  The press is generally deferential to him, 
occasionally referring to him as "Mr. Clean." 
 
6.  (SBU) Chand served his third term as Prime Minister from 
March 1997 to October 1997.  While the head of an unlikely 
coalition of former revolutionaries and former royalists, he 
nevertheless was able to produce some results, including new 
agreements with India on air transport and land transit, a 
renewed invitation to Enron to develop the Karnali-Chisapani 
hydropower project, and basically free and fair local 
elections.  Still, his reputation as a leader is not strong. 
He is still seen by many as a man who can be manipulated by 
others.   He was born in Baitadi,  a remote western region 
bordering India, on March 15, 1939.  He studied in India, 
graduating in arts from Nainital College and later in law 
from Dehradun, and took an early interest in politics where 
he rapidly made his mark as a local politician.  Elevated to 
the national Panchayat in 1974, he became Vice Chairman in 
1975 and Chairman in 1980. He was reelected Chairman of the 
national Panchayat the following year, and, in 1983, was 
elected Prime Minister of Nepal.  He also handled the 
portfolios of defense and royal affairs, and reportedly 
enjoyed an excellent rapport with the late King Birendra.  He 
resigned in 1985 when internal power struggles undermined the 
national Panchayat. 
 
7.  (SBU)  Chand received his second chance at power when, in 
1990, the popular movement for restoration of multi-party 
democracy came to a head in Nepal in the waning days of the 
Panchayat regime.  In April 1990 he was appointed Prime 
Minister to mediate with the Nepali Congress and communist 
leaders of the movement.  However, the movement had already 
passed the point where mediation was possible.  It culminated 
with the restoration of a popularly elected parliament with 
multiple parties, and the end of Chand,s second brief spell 
in power.  Chand ran for Parliament again in 1999, but failed 
to gain either seat in the Baitadi district.  He is married 
to Subhadra Chand and has six children.  Chand has always 
been accessible to US officials. 
 
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PARTIES LEFT OUT IN THE COLD 
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8.  (C) Arjun Narasingh K.C., spokesman for the Nepali 
Congress Party, and former Nepali Congress MP and Finance 
Minister Dr. Ram Sharan Mahat both told us their party had 
been surprised by the King's announcement.  Mahat said the 
technocrat members of the Cabinet were good--but not the best 
that could be found.  Jhala Nath Khanal of the Opposition UML 
party told us that the King's 3:00 p.m. radio address was 
"180 degrees opposite" to what he had promised UML Leader 
Madhav Nepal in a private meeting just four hours earlier. 
In that meeting, Nepal had agreed to Chand as the "consensus 
candidate" for PM (the Nepali Congress leader had reportedly 
done so as well).  The King promised the new PM would then 
consult with the other parties on the composition of the rest 
of his Cabinet.  The UML was thus "shocked and surprised" 
that the King announced, along with the appointment of Chand, 
the apparently unilateral appointment of more than half of 
the Cabinet.  When asked if the UML would nominate members 
for the remaining portfolios, Khanal said it was unlikely. 
 
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COMMENT 
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9.  (C)  Leaders of other large political parties (like the 
Nepali Congress and UML) had expressed concern over the past 
few days that the King, despite seeking their indiviual 
counsel, would ultimately make his own choices for Prime 
Minister and the interim Cabinet.  The King did not accede to 
the parties' request that he meet them as a group to discuss 
Cabinet appointments (Reftel), and the parties never 
forwarded their suggestions for such appointments to him. 
The party leaders' dithering over the past week forced the 
King to stretch his original October 9 deadline for 
nominations by two days.  With the week-long Dasain holiday 
looming, the monarch doubtless felt that he had to appoint a 
government--with or without the parties' consent. 
Nonetheless, it is difficult to understand the King's 
apparent about-face with party leaders whose trust he will 
need to make this work.  Chand has been one of several names 
floated as a possible PM over the past week.  With his "Mr. 
Clean" image and his position in the third-largest party, the 
Palace may be gambling that the former Panchayat-era PM was a 
good compromise, if not the "consensus" candidate the other 
large political parties have been demanding (Reftel). The 
King has chosen a roster of past politicians and bureaucrats 
who are unlikely to challenge his authority. But the heavy 
representation of figures from the autocratic, pre-democracy 
Panchayat regime is unlikely to sit well with the other 
parties, who tag figures from that era, justly or unjustly, 
as anti-democratic.  As of COB October 11, there had been no 
public reaction from either the Nepali Congress or the UML 
regarding the King's announcement.  When they do speak 
up--and we assume it will be soon--their comments are likely 
to be critical. 
MALINOWSKI