FOLLOW-ON TO THE CONFERENCE ON NEPAL IN LONDON:

C O N F I D E N T I A L SECTION 01 OF 05 KATHMANDU 002045

SIPDIS

MANILA FOR ADB
LONDON FOR POL - RIEDEL

E.O. 12958: DECL: 10/24/2012
TAGS: PREL EAID NP
SUBJECT: FOLLOW-ON TO THE CONFERENCE ON NEPAL IN LONDON:
DONOR REPS IN KATHMANDU ENDORSE CONTINUING SUPPORT DESIPITE
MAOIST CRISIS


Classified By: DEPUTY CHIEF OF MISSION ROBERT K. BOGGS. REASONS: 1.5 (
b, d)


1. (C) Summary. The British Embassy in Kathmandu convened a
meeting on October 11 of representatives of bilateral and
multilateral donors to Nepal as a follow-up to the London
meeting on Nepal in June. Despite continuing donor
disquietude about Nepal's political and security problems,
there was fundamental consensus among the 22 donors that the
international community should recognize the constraints
imposed on the Government of Nepal by the Maoist insurgency
and not impose unreasonable preconditions for continuing
developmental assistance. This meeting is being viewed by
the British Embassy as the activation of an "International
Contact Group" that will meet periodically to maintain the
momentum and coordination begun in London. Reservations by
the Indian and Chinese Governments have forced the FCO to
revise its initial proposals for a more elaborate
architecture of multilateral dialogue on Nepal. End summary.


2. (C) The British Embassy in Kathmandu took advantage of the
visit to Kathmandu of Undersecretary of State of the UK, Mike
O'Brien, to convene a meeting of 22 bilateral and
multilateral donors and representatives of the Nepalese
Government and military. The meeting was billed as a
follow-up to the International Meeting on Nepal held in
London in June 2002 although this meeting's abbreviated
length (two hours) necessitated a much more general, less
comprehensive discussion than had occurred in London. There
was little discussion of specific developmental aid since the
June meeting and no discussion of security assistance by any
of the participants. Mike O'Brien made clear that his
Embassy intended to issue a Chairman's Statement at the
conclusion of the meeting which would attempt to capture the
spirit of the meeting, but which would not be a formally
cleared, multilateral document. (See para 10 for the final
version of the Chairman's Statement.) Several
representatives specified that the meeting must be considered
informal, since they had no authorization from their capitals
to participate in a more structured contact group.


3. (C) Ambassador Malinowski set the tone of the subsequent
discussion by pressing for an appropriately strong
condemnation of Maoist tactics, including terrorism, human
rights abuses against civilians, and destruction of economic
and social infrastructure. He said that he had received
repeated assurances from GON leaders that the Government was
willing to negotiate with the Maoists when the climate for a
fruitful political process had been created. The Ambassador
reiterated the interest of the US in social and political
reform, including the reduction of corruption, but argued
that unreasonable preconditions should not be imposed on
Nepal during this time of crisis. He acknowledged that the
operations of the GON security forces do sometimes obstruct
the free flow of food to insurgency-affected areas, but the
root cause of this was Maoist depredations. He urged the
donors not just to complain about or solely criticize GON
actions or inactions, but to be prepared to work with the GON
in efforts to effectively combat the insurgency and to
develop -- like the U.S. and the UK -- new programs to
specifically help the GON counter the Maoists. USAID/NEPAL
Director Joanne Hale called upon the donor community to join
the US in strengthening the rural justice system, the lacunae
in which tend to be filled by Maoist summary courts. Hale
also described USAID plans to rebuild, through quick
income-generating programs, rural infrastructure destroyed
by the Maoists and to rehabilitate child victims of Maoist
violence. Hale pledged USAID's willingness to work with
other donors on our new programs.


4. (C) The Russian and Australian Ambassadors and the Danish
Representative agreed that the Chairman's Statement should
give stronger emphasis to the Maoists' destruction of
infrastructure. The German Ambassador too agreed that the
Chairman's Statement should place stronger onus on the
Maoists as the root cause of many of Nepal's current
problems, but felt that some criticism of the GON was
justified. The Norwegian Ambassador--usually a vocal critic
of the GON--acknowledged that progress on reforms was being
achieved due to the dedicated efforts of some civil servants
and members of civil society, but expressed concern that
governmental corruption is being aggravated by Maoist
extortion. Although the Government's counterinsurgency
operations did place unfortunate restriction on the movement
of food and medicines to some areas, she said, the morale of
the security forces is important and should be bolstered by
increased development expenditure in the rural areas. The
Indian Charge emphasized the importance of supporting Nepal's
fledgling democracy and constitutional monarchy. The donor
community should do nothing, he warned, to lower the morale
of the Nepalese people, Government or security forces. He
urged the donor community to reiterate its support for the
security and development of Nepal. The Chinese Ambassador
predictably warned against foreign interference in the
internal affairs of the Kingdom.


5. (C) The representatives of three leading multilateral
donors--the IBRD, UNDP, and ADB--expressed striking unanimity
on the following points:

-- Nepal is now in the throes an unprecedented economic and
developmental crisis;

-- Donors should not give the impression that the GON bears
primary responsibility for this crisis, since this would only
strengthen the hand of the Maoists;

-- The international community must recognize the devastating
impact that the Maoist insurgency is having on the capacity
of the government to deliver social services and implement
development programs;

-- Donors should not try to dictate a schedule for GON
negotiations with the Maoists nor set unrealistic political
preconditions for the continuation of developmental support.


6. (U) The GON was represented by several senior Foreign
Ministry officials, a member of the National Planning
Commission, and a major general working in the National
Security Council Secretariat. The ranking Foreign Ministry
representative presented the donors with the Government's
"Action Plan to Exppedite Reforms." The major general argued
forcefully for more international resources to rehabilitate
surrendered Maoists and the victims of Maoist violence.


7. (U) List of Attendees:

Mr. Michael Malinowski, US Ambassador
Mr. Ruediger Wenk, Delegation of the EU Charge d'Affaires
Dr. Giap Dang, EU Delegation
Ms. Carla Hogan Rufelds, Canadian Cooperation Office
Mr. Louis Simard, Canadian Cooperation Office
Mr. Crispin Conroy, Australian Ambassador
Mr. Kazumi Suzuki, Japanese DCM
Mr. Saburo Sato, Japanese Embassy
Mr. Shota Kamishima, Japanese Embassy
Mrs. Ingrid Ofstad, Royal Norwegian Ambassador
Mr. Ashok Kumar, Indian Charge d'Affaires
Mr. Gert Meinecke, Royal Danish Charge d'Affaires
Mr. Ruediger Lemp, German Ambassador
Mr. Ulf Wernicke, Director, GTZ
Mr. Claude Ambrosini, French Ambassador
Ms. Amandine Pobe, French Embassy
Mr. Valery Nazarov, Russian Ambassador
Mr. Wu Congyong, Chine Ambassador
Mr. Jan de Witte, SNV Nepal
Mr. Peter Koch, Dutch Ambassador (SNV)
Mr. Kenichi Ohashi, World Bank (IBRD)
Ms. Joanne T. Hale, Director, USAID
Mr. Robert K. Boggs, US DCM
Mr. Henning Karcher, UNDP
Mr. Anton Hagen, SDC (N) Swiss
Mr. Asko Luukkainen, Finnish Charge d'Affaires
Mr. Gyan Chandr Acharya, Joint Secretary, Europe and America
Division, MFA
Dr. Shankar Sharma, National Planning Commission
Maj-Gen Rookmangud Katawal, National Security Council
Secretariat

SIPDIS
Professor Sridhar Khatri, Institute of Foreign Affairs
Mr. Madhav Ghimire, Ministry of Foreign Affairs
Dr. Rambhaktar Thakur, Joint Secretary, MFA
Mr. Sukhwinder Singh, IMF
Ms. Erika Joergensen, WFP
Mr. Richard Vokes, Asian Development Bank
Mr. Bruno Georges, as observer for Belgian Delegation


8. (C) Comment. The tenor of the October Donors' Meeting in
Kathmandu essentially replicated that of the June meeting in
London. The local donor representatives are deeply concerned
about the continuing deterioration in Nepal's economic
situation, which they attribute primarily to the Maoists.
Although they hold the GON responsible for administrative
lapses and political infighting, they do not want to issue
public statements or set political preconditions that would
encourage the Maoists to believe that international opinion
is shifting in their favor. They were particularly cautious
about making political statements on October 11, the same day
that the King announced his appointment of a new prime
minister and a number of new cabinet ministers. Many donor
representatives are concerned about the series of political
missteps by the elected government that led the King to
dissolve the Cabinet on October 4, and are reporting
pressures from their capitals to justify continued
development assistance in the face of Maoist violence and
constitutional issues in Kathmandu. The donor community is
united, however, in giving the King the benefit of the doubt
as his new government takes steps against governmental
corruption and tries to establish a modus vivendi with the
political parties that would provide a common front in future
negotiations with the Maoists.


9. (C) Comment, continued. Since the October 11 confab at
the British Embassy, Ambassador Malinowski has consulted
repeatedly with his British counterpart Keith Bloomfield
about additional steps to maintain the momentum created by
the June meeting on Nepal in London. The October 11 meeting,
Bloomfield explained, might be considered the activation of
the most comprehensive of four multilateral working groups on
Nepal endorsed by the FCO. Unfortunately, he said, both the
Indian and Chinese Governments, with which the British
Government has consulted about its proposed four working
groups, have declined to participate in multilateral
discussions focussing narrowly on Nepali security or
political issues. Ambassadors Malinowski and Bloomfield
agreed that, despite Indian and Chinese misgivings,
international dialogue and coordination on Nepal should be
pursued as far as practicable. The British Embassy here is
consulting with FCO on a concept for a more limited
architecture of discussions. Embassy will keep Department
informed as this revised proposal takes firmer shape. End
comment.


10. (U) Final text of final British Chairman's Statement
(issued October 22):

Begin text:
"The international meeting on Nepal held in London in June
2002 noted the deep concern of the international community
over the conflict in Nepal, particularly the vicious Maoist
outrages as well as human rights abuses. The participants in
the meeting agreed that an integrated approach of security,
reform and development was necessary to address the conflict.
The meeting recognized that the basis for international
support for such an approach would be democratic political
leadership committed to tackling corruption and building
national consensus, whilst determinedly pursuing a strong
security response.

We note that since the meeting in June, the people of Nepal
have continued to suffer. We condemn the threat to democracy
posed by the continuing Maoist insurgency and the wanton
destruction of life and property by them and insist that
political change will not be brought about by violence. We
unreservedly condemn all acts of terrorism and abuses of
human rights. The community gives strong support to the
government which has begun to address reform and development
through the immediate action plan and to provide peace,
protection and security to all its citizens, and regrets that
the security situation did not allow local and national
elections to be held this year,

This meeting reviewed and welcomed progress and urges the
Government of Nepal and the international community to
continue implementing the London recommendations,
particularly in the following areas:

-- Security: The meeting welcomed recent security efforts
and supports the government's determination to show the
Maoists that they cannot win by violence;
-- Cross-Party Approach: By seeking to develop a cross-party
political process which ends the violence;
-- Corruption: The meeting welcomed the new anti-corruption
law and progress by the CIAA in investigating corruption
allegations and urges the Government to ensure legal action
is taken against those who breach a position of trust; those
who pay bribes are to be condemned as much as those who
receive them.
-- Development: Within security constraints by increasing
visible development efforts particularly in the mid- and
far-west of the country, including by improving the
circumstances of dalits, women and ethnic groups. There also
needs to be continued efforts to coordinate activities by the
development agencies to coordinate their efforts and to work
with the Nepalese Government;
-- Human Rights: The meeting welcomed the commitment of the
government to human rights and international humanitarian
standards and particularly the establishment of the human
rights cell in the Royal Nepal Army, and urges the government
to investigate thoroughly allegations of human rights
violations and seek the prosecution of offenders, as well as
redress and rehabilitation of victims;
-- Democracy: By setting quickly a timetable for elections
for local representative bodies and parliament;
-- Food and Medicine: By seeking to get food and medicine to
all areas of the country without artificial hindrances;
-- Reform: The meeting welcomed progress made and urges the
government to accelerate reform in key areas of central
government to enable the authorities to effectively tackle
the causes of the conflict, deliver services and support
democracy.

This meeting believes that continued progress on these points
is desirable particularly through:

-- practical support for a resolution of the conflict;
-- further support for reform and development in nepal;
-- support for post-conflict reconstruction in nepal.

This meeting agreed to convene further meetings to coordinate
help for Nepal in tackling the current crisis and long term
problems."
End text.





MALINOWSKI