FOREIGN SECRETARY APPEALS FOR IMMEDIATE AID

UNCLAS SECTION 01 OF 02 KATHMANDU 000402

SIPDIS

SENSITIVE

STATE FOR SA/INS

LONDON FOR RIEGEL

E.O. 12958: N/A
TAGS: PREL EAID PGOV ETRD NEPAL'>NP
SUBJECT: FOREIGN SECRETARY APPEALS FOR IMMEDIATE AID

REF(S): A) 01 KATHMANDU 1675; B) KATHMANDU 0378

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SUMMARY
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1. (SBU) SUMMARY: On Feb. 21 Foreign Secretary Madhu
Raman Acharya called the Ambassador to the Foreign
Ministry to appeal directly for immediate assistance in
the wake of the Maoist attacks on Achham (Ref B). He
said the Ministry hopes to send a delegation, at the
secretary level, to Washington to make its case directly

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to the USG. The Ambassador reiterated USG support for
the Government of NEPAL (GON) and reviewed the progress
of USG efforts to beef up both military and development
assistance. He advised the proposed delegation travel
to Washington after the visit of the assessment team
from PACOM in April. End summary.

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WE APPRECIATE THE SENTIMENT . . .
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2. (U) On Feb. 21 Foreign Secretary Madhu Raman
Acharya asked to meet with the Ambassador at the MFA.
Joint Secretary for the Americas Gyan Chandra Acharya
and Undersecretary Prahlad Prasai also attended. The
Ambassador opened the meeting by extending condolences
for the Feb. 17 Maoist attacks in Achham District (Ref
B). The Foreign Secretary thanked the Ambassador for
the statement issued by A/S Boucher the previous day,
and for the Ambassador's own comments, carried in the
local press Feb. 21, condemning the attacks.


3. (SBU) The Ambassador reiterated USG support for
Government of NEPAL (GON) efforts to address the
increasingly violent insurgency, and reported that the
USG is still reviewing possible programs to expand both
military and development assistance. The USG is hoping
to be able to provide at least an additional USD 3
million in development funds for this year, and a
possible USD 6-9 million the following year. At least
USD 2 million in military aid for this year now seems
possible, he said. A supplement to the budget with
additional funds for NEPAL is also being contemplated,
he said, but cautioned that such a process may be
complicated and lengthy.

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. . . BUT WHERE'S THE MONEY?
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4. (SBU) Although its bureaucratic processes take
time, the USG wants to help NEPAL, the Ambassador
concluded, and is very concerned by the flare-up in
violence in an already volatile region. He noted
Secretary of State Colin Powell brought this message to

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the GON during his Jan. 18-19 visit. Secretary Acharya
responded that the Powell visit had raised hope for more
USG aid. He said he understands that the USG is
reviewing the requests, but stated that the Foreign
Ministry must demonstrate to the NEPALi public that it
is being proactive in seeking tangible support from
friendly nations. To this end, he proposed sending an
MFA delegation, headed by him, to Washington to make its
case.


5. (SBU) The Ambassador suggested the delegation also
include representation from the Royal NEPAL Army (RNA)
and the Ministry of Finance to help make a concerted
pitch for the need for increased aid. He proposed the
delegation wait until after the visit to NEPAL of the
assessment team from PACOM in April. With the
assessment team's findings in hand, the delegation could
arrive in Washington with a firmer idea of NEPAL's needs
and requirements. Besides the Department of State, the
delegation should also visit USAID and the Department of
Defense, the Ambassador noted.

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AND LET'S NOT FORGET GARMENTS
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6. (SBU) The Foreign Secretary suggested that, in
light of the increasingly serious situation NEPAL faces,
the USG might be more generous in its allocation of
garment quotas. The Ambassador noted that the Finance
Minister had brought up the same subject with
Undersecretary Larson during his Jan. 18-19 visit, and
that a response from U/S Larson is on its way. The
Ambassador indicated that there seems to be little hope
of increased quota--especially since NEPAL has not used
up all of its quota in a number of categories--but
suggested that the proposed delegation to Washington
also include someone from the Ministry of Commerce to
raise the topic.

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GUNS AND GHEE
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7. (SBU) The Ambassador raised an article that
appeared in the local press citing a report from the
Indian newspaper The Asian Age that speculated
explosives used by the Maoists in the attacks in Achham
may have been supplied by extremist groups, like the
People's War Group and the Maoist Co-ordination Centre,
based in India. The article quoted a Calcutta police
DIG stating he had seen evidence of arms being sent to
Kathmandu and outlying districts. The Foreign Secretary
said the GON frequently hears rumors of such connections
between the Maoists and groups in India, but had as yet
"no concrete evidence."


8. (SBU) The Foreign Secretary said talks aimed at
renewing the bilateral trade treaty between India and
NEPAL had ended inconclusively for now, although both
sides have "narrowed down" their areas of difference.
Joint Secretary Acharya said that while the Indians had
originally requested to review treaty provisions for
five products they claimed had undergone a "surge" in
exports to India (Ref A),they were now proposing more
comprehensive, "across-the-board" changes in the treaty.

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COMMENT
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9. (SBU) Our interlocutors in the GON seem to
appreciate that USG funding processes take time, and
that we are serious about trying to help. That said,
the horrific attacks in Achham have obviously put
pressure on all branches of the GON. For the MFA, this
pressure translates into urgent appeals for assistance
to likely foreign donors.

Malinowski