NEPALI CONGRESS PARTY REVOKES PM'S MEMBERSHIP;

C O N F I D E N T I A L SECTION 01 OF 02 KATHMANDU 001055

SIPDIS

STATE FOR SA/INS
LONDON FOR POL - RIEDEL

E.O. 12958: DECL: 05/27/2012
TAGS: PGOV NP GON
SUBJECT: NEPALI CONGRESS PARTY REVOKES PM'S MEMBERSHIP;
EMERGENCY EXTENDED

REF: A. (A) KATHMANDU 1037

B. (B) KATHMANDU 1036

C. (C) KATHMANDU 1008

D. (D) KATHMANDU 1007

Classified By: AMB. MICHAEL E. MALINOWSKI. REASON: 1.5 (B,D).

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SUMMARY
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1. (C) Prime Minister Sher Bahadur Deuba was expelled from
the Nepali Congress Party for three years on May 26. As a
counterattack, Deuba plans to call a party General
Convention, with the possible aim of deposing Nepali Congress
Party President G.P. Koirala from his post. On May 27 King
Gyanendra re-imposed the state of national emergency, which
had expired on May 25, by royal ordinance until August 27.
Deuba has not yet formed a new Cabinet and told the
Ambassador it may be a few weeks before he is able to do so.
He reiterated to the Ambassador his commitment to holding
free and fair elections by the November 13 scheduled date.
Behind-the-scenes efforts to mend the rift between the PM and
Party President Koirala continue, but for right now the
oldest, largest party in the country seems remains polarized.
End summary.

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NEPALI CONGRESS NO MORE
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2. (SBU) As expected, on May 26 the Central Working
Committee (CWC) of the Nepali Congress Party revoked Prime
Minister Sher Bahadur Deuba's party membership after he
defied its directive not to seek extension of the state of
emergency. The expulsion, which will remain in effect for
three years, follows the May 23 suspension of Deuba's party
membership, and is only the most recent step in the unfolding
confrontation between Deuba and Nepali Congress Party
President G.P. Koirala.


3. (SBU) Accusing the Party leadership of
"short-sightedness" and "jealousy," Deuba retaliated by
announcing that he might try to convene a party General
Convention. (Note: The General Convention meets every five
years. However, the Party President must call an
out-of-cycle General Convention if 25 percent of the
Convention's 1,500 members sign a petition calling for such a
meeting. End note.) The PM has signaled that he might try
to use the special session of the General Convention to bring
a no-confidence motion against Party President Koirala.
(Note: Two-thirds of the membership is required to carry
such a motion. It is not clear if Deuba would have the
support within the party to carry such a vote. End note.)

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EMERGENCY EXTENDED
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4. (U) Also as expected, on May 27 King Gyanendra
re-instituted, by royal ordinance, the state of national
emergency that had lapsed the previous day. The Prime
Minister was forced to rely upon a royal ordinance to
resurrect the emergency since neither house of
Parliament--with the Lower House dissolved late May 22 and
the Upper House prorogued on May 24--was in session when the
emergency expired. Under the Constitution, the reinstated
emergency may last for only an additional three months--until
August 27. (Note: A Parliamentary extension would have
bought the Government an additional six months. End note.)

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A RETROFITTED CABINET?
NOT YET
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5. (C) Deuba has made no move yet to refit his Cabinet--a
Cabinet whose bloated size and general inefficiency proved a
source of constant criticism for the PM from both inside and
outside his party, as well as from donors, including us. The
PM's much-anticipated May 24 televised address to the nation
focused primarily on his reasons for seeking an extension to
the emergency--and thus for defying his party's orders--and
his decision to dissolve Parliament and call for new
elections. Only two of the 39 members of his Cabinet have
tendered resignations, one of whom--former Finance Minister
Ram Sharan Mahat--has already signaled his willingness to
rejoin a new Cabinet (Ref B). (Women, Children and Social
Welfare Minister Kharel has rescinded his May 24 offer to
resign and is back in.) At a May 27 dinner, the PM told the
Ambassador he may have to defer addressing the question of a
new Cabinet for at least a few weeks as his attention is
riveted on more urgent matters, such as ensuring that free
and fair elections take place as scheduled by November 13.

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COMMENT
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6. (C) Party President G.P. Koirala's support is generally
deemed more solid among party rank-and-file out in the
districts. Thus Deuba's threat to convoke a General
Convention--if indeed he could garner the signatures to do
so--may be no more than a feint in the continuously
escalating tit-for-tat between the PM and his rival that now
threatens to split Nepali democracy's founding party. While
some party insiders, such as former FinMin Mahat, continue to
hold out hope that behind-the-scenes efforts may help defuse
the confrontation, the rapid chain of events over the past
weeek has not been especially promising. With each
successive move, the antagonists raise the stakes still
higher--and back themselves further and further into
increasingly narrow corners. Koirala's strident claims of an
anti-democratic conspiracy in Deuba's actions (Ref A) can
only exacerbate the rift. That said, both combatants' sense
of political survival--and the realization that neither can
do well in the upcoming elections if the Nepali Congress
splits--may yet succeed in keeping the strife-ridden party
together.
MALINOWSKI