C O N F I D E N T I A L SECTION 01 OF 03 KATHMANDU 001005

SIPDIS

LONDON FOR POL/RIEDEL

E.O. 12958: DECL: 05/22/2012
TAGS: PGOV PREL PHUM PTER ASEC PINR NP GON
SUBJECT: PARLIAMENT DISSOLVED; ELECTIONS CALLED FOR
NOVEMBER; PM KICKED OUT OF PARTY

REF: A. KATHMANDU 996

B. KATHMANDU 995

C. KATHMANDU 740 (EXDIS)

Classified By: Ambassador Michael E. Malinowski, Reasons 1.5(b),(d)


1. (C) Summary. Nepal's King on May 22 announced the
dissolution of Parliament and called elections for November
13 after a faction of the ruling party refused to support
Prime Minister Deuba's attempt to extend the state of
emergency. The ruling party then kicked out the PM May 23.
Three Ministers resigned May 23, and the PM will likely
appoint a new Cabinet. Deuba's move was constitutional,
experts judged, but raises many questions including what
happens if circumstances prevent elections from being held
and whether the emergency can be extended. After dissolution
Parliament's upper house takes on many of the roles of the
lower house, including deciding on the emergency, but Deuba
does not likely have the votes there to secure an extension.
Alternatively, the emergency could be extended by executive
fiat. The army says recent developments will have no effect
on their operations. Deuba has tried to make the best of a
bad situation, but will be under tremendous pressure to bring
about positive change in the coming months to justify his
actions. End Summary.

Parliament Dissolved, Elections Slated, PM Excommunicated
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2. (SBU) On the recommendation of Prime Minister Sher Bahadur
Deuba's Cabinet, Nepal's King Gyanendra dissolved the lower
house of Parliament late on May 22 and set fresh elections
for November 13. His announcement followed an inconclusive
and hastily convoked meeting of Nepali Congress Party (NCP)
Members of Parliament earlier in the evening. The MPs
convened after a stormy meeting of the Party's Central
Working Committee (CWC) - dominated by supporters of Deuba's
political rival, NCP President and former PM Girija Prasad

("G.P.") Koirala - which decided not to support Deuba's
efforts to extend the state of emergency in effect since
November 26, 2001. (Note: According to PM Deuba, he acted
to preempt a no-confidence motion reportedly planned for the
afternoon of May 23 (Septel). End Note.) Another CWC
meeting held May 23 decided to strip Deuba of his NCP
membership.

Three Ministers Resign; New Cabinet a Possibility
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3. (C) Late in the day Post learned that three Ministers had
resigned: Ram Sharan Mahat at the Finance Ministry; Amod
Prasad Upadhyaya at Education and Sports; and Rajendra Kharel
at Women, Children and Social Welfare. Tirtha Man Shakya, a
lawyer and former Chief Secretary (Nepal's highest-ranking
civil servant), confirmed that after dissolving Parliament
the PM is free to dismiss his cabinet and appoint "anyone off
the street." Speculation is rife in the capital about who
will be brought in to serve in an interim cabinet.

Deuba's Gambit Constitutional
--------------


4. (C) As related Ref C, Deuba was constitutionally within
his rights to dissolve Parliament and call for new elections.
The King, as constitutional monarch, was then compelled to
accede to the PM's request. Under the current 1990
constitution, a precedent was set when former Prime Minister
G.P. Koirala dissolved Parliament and called for new
elections in 1994 after members of his own party withdrew
their support on a key policy vote. The Supreme Court upheld
Koirala's 1994 move, but subsequent attempts to dissolve
Parliament by a minority government PM in 1995 and a
coalition government PM in 1998 were blocked by the Court
because these PMs moved after no-confidence motions were
already underway. In acting before a no-confidence motion
could be tabled, Deuba seems to have taken into account the
Court's inevitable scrutiny on this count.

But Raises Thorny Constitutional Issues
--------------


5. (SBU) Even so, Deuba's actions raise a number of
complicated constitutional issues. For example, Nepal's
constitution does not include a provision for what happens
when elections cannot be held within a specified period of
time, in this case six months, as may eventually be the case
given Nepal's widespread Maoist insurgency. Although Deuba's
actions to date have been constitutional, questions remain
about what would happen if the November 13 elections do not
come off or are contested. According to Tirtha Man Shakya,
simply setting a date was enough to fulfill the
constitutional requirement. Whether or not elections are
actually held on that date is immaterial. Shakya admitted,
however, that although he himself considered this view
legally sound, it was subject to review by the courts, who
may take a different view. He added that Nepal's
constitution is oddly silent on the subject of what measures
would have to be taken in the wake of a failure to hold
Parliamentary elections. Again, he said, this is a matter
for the courts to decide.

How to Hold Elections?
--------------


6. (C) How to hold elections within six months, as required
by the constitution, is the greatest challenge now facing
Nepal's democracy. The army has declared itself ready to
guarantee the security of the elections, but under emergency
conditions this task would be problematic at best. Shakya
suggested that the constitution provides one way out by
defining a quorum in Parliament as twenty-five percent of
members. Thus a partial election could be held - in as few
as 52 of Nepal's 205 constituencies - that would serve to
constitute a new body.

Upper House Takes Lower House Powers
--------------


7. (C) Some critics alleged that the emergency will lapse
because the bill to extend it has not yet been introduced
into the upper house, where it must "mature" for five days
before a vote can take place. Legal experts demurred,
however, stating that under the constitution the upper house
takes up the powers of the lower house when the latter has
been dissolved. Therefore, because the bill has already been
introduced and has matured in the lower chamber, the upper
house can go ahead and vote on it. (Note: Deuba's action
dissolved the lower house, the House of Representatives, but
the upper house - the National Assembly - remains in place.
The National Assembly has sixty members, including ten "of
high reputation" nominated by the King; 35 elected by the
lower house; and three each elected by local officials in
Nepal's five development regions. End Note.)

Emergency Unlikely to Pass Upper House
--------------


8. (C) Under the constitution, following the expiration of
the initial six-month period, the state of emergency can be
extended an additional six months by a two-thirds vote of
Parliament. Since the lower house has been dissolved, it
falls to the upper house to vote on an extension. As 23 of
the National Assembly's 59 sitting members belong to the main
opposition party, the CPN-UML, Deuba will be unable to extend
the state of emergency for the full six months without UML
support. (Note: Deuba told the Ambassador May 23 that he
does not believe that he has enough votes in the upper house
to get the motion approved (Septel). End Note.)


9. (C) However, by keeping the Assembly out of session, he
will be able to continue the emergency for an additional
three months by having the Cabinet ask the King to issue an
Ordinance to that effect. Alternatively, should the state of
emergency lapse the PM could have the King declare a new
emergency, starting the clock over again. Shakya judges that
in this way the government could declare successive
emergencies, with only a gap of a day - or even hours -
between them.

General: No Impact on RNA Operations
--------------


10. (C) Chief of General Staff Lt. Gen. Pyar Jung Bahadur
Thapa said that dissolution of Parliament and possible
expiration of the state of emergency will have "no immediate
impact" on Royal Nepalese Army (RNA) operations. General
Thapa did not want to speculate much beyond the near term,
however.

Comment
--------------


11. (C) Painted into a corner by the machinations of
political rivals, PM Deuba has tried to make the most of a
bad situation. By calling new elections he bought time to
clean house and continue the prosecution of the campaign
against the Maoists, who of late seem to be feeling the heat.
By his actions he has shown himself conversant with twelve
years of constitutional legal precedent, and he shows every
indication of continuing to use the law to his own advantage.
Deuba may have six months to a year in which to justify his
actions and make his mark - to get his country back on an
even political and economic keel. The pressure for him to
perform is now greater than ever, as his critics will take
every opportunity to drag him down.
MALINOWSKI