PM DEUBA ON THE CURRENT CRISIS: WORRIED, BUT

S E C R E T SECTION 01 OF 02 KATHMANDU 000731

SIPDIS

LONDON FOR POL/RIEDEL
NSC FOR MORIARTY

E.O. 12958: DECL: 04/11/2012
TAGS: PREL PTER PGOV PHUM PREL PINR NP
SUBJECT: PM DEUBA ON THE CURRENT CRISIS: WORRIED, BUT
POSITIVE

REF: A. KATHMANDU 710

B. STATE 63807

C. KATHMANDU 708

D. KATHMANDU 672

Classified By: AMBASSADOR MICHAEL E. MALINOWSKI, REASONS 1.5(B),(D)


1. (S) Summary. Prime Minister Deuba expressed gratitude for
international assistance to Nepal during an April 12 meeting
with U.S. and U.K. Ambassadors. To continue recent "positive
steps," Deuba was hopeful that a White House meeting could be
arranged during his upcoming visit to the U.S. Reviewing
developments overnight, Deuba confirmed a Maoist attack on
security forces in western Nepal and that India had
extradited eight suspected Maoists to Nepal. Deuba hopes
India will "talk sense" to visiting former Prime Minister
Koirala, and added that he had not approved a meeting between
Koirala and Maoist representatives. Deuba continues to worry
about efforts by Koirala to unseat him. The PM enjoys good
relations with the King, who took pains to assure him of
Palace support for democracy. Nepal's National Security
Council is now operational; next, Deuba hopes to
institutionalize ways of combating public corruption. Post
concludes that high-profile exposure during Deuba's upcoming
trip to the U.S. will help him both fend off spoilers and
crystallize international support. End Summary.

Deuba Grateful for Foreign Assistance
--------------


2. (C) Ambassador and UK Ambassador Ronald Nash breakfasted
with Prime Minister Sher Bahadur Deuba at the British
residence April 12. Reviewing the current situation in
Nepal, Deuba judged that "not all things are bad." He
expressed great gratitude for the support he had received
from the U.S. and British governments, and specifically
acknowledged the presence in country of the U.S. military's
PACOM assessment team and a team from the U.S. National
Guard. Deuba appreciated that Assistant Secretary Rocca had
included Nepal on the agenda in her recent talks in New
Delhi. He also referred to helpful statements made by the
U.K. State Minister when he had come through Kathmandu
recently. Nepal's Foreign Secretary had just concluded good
talks in Washington (Ref B) and London, and would travel to
Moscow in coming weeks. The PM's own recent visit to Delhi
had gone well, he judged. Prime Minister Deuba hopes he can
travel to Washington to meet with the President in May, with
the aim of building on what he termed "positive steps" in the
bilateral relationship and the struggle against terrorism
(Ref C).

Maoists Continue Attacks, Target Infrastructure
-------------- --


4. (C) Deuba related that casualties would be high in an
April 11 series of attacks when Maoists overran two police
posts in western Nepal's Dang district (Septel). Nepal's
security forces are stretched thin due to the need to guard
the country's infrastructure, which the Maoists continue to
attack, Deuba said.

India Turns Over Maoists
--------------


5. (S) Confirming press reports on India's hand-over of eight
wounded Maoists to Nepal, Deuba noted that the Indians had
acted on information provided by Kathmandu (Septel). Deuba
described the Maoists as low-level. (Note: At a
U.S.-sponsored reception April 11, Chief of Army Staff Rana
also made this claim to Ambassador.) (We note this is the
first such action on India's part, and may have been the
result of the series of U.S., U.K., and Nepalese visits to
New Delhi.)

Koirala to India
--------------


6. (C) Deuba hopes the Indians can "talk some sense" into
former Prime Minister G.P. Koirala during Koirala's upcoming
visit to India (Ref A). Asked by Ambassador about rumored
plans for a meeting in India between Koirala and Maoist
leader Baburam Bhattarai, Deuba replied that he had not
authorized talks between the former PM and the Maoists.
(Note: COAS Rana told Ambassador April 11 that the Royal
Nepalese Army (RNA) had caught wind of plans for a
Koirala-Bhattarai meeting in India, and would have Koirala
under surveillance during his trip in order, presumably, to
discredit the former PM. End Note.)

Former PM's Shadow
--------------


7. (C) Deuba stated that G.P. Koirala continues to try to
oust him (Ref A). Deuba is "quite worried" about this. He
sees option in dissolving the government and calling for new
elections to give him six more months, at least. The
Ambassadors asked the Prime Minister whether elections could
be held under current security conditions, pointed out the
added expense to an already-strapped treasury, and that an
election would further stretch Nepal's security assets.

Opposition Aiming for 7-10 Split
--------------


8. (C) Deuba does not think the main opposition party,
CPN-UML, is working to unseat him at this time. Rather, the
opposition seeks to fragment the ruling Nepali Congress Party
(NCP). After Deuba was unseated by G.P. Koirala in 1997,
CNP-UML leader Madhav Nepal approached him about joining
forces. Deuba had declined.

Relations with King
--------------


9. (C) The PM's visit to western Nepal with the King and the
COAS (Ref D) had been "positive" and had boosted morale,
Deuba said. He added that his relations with the King are
good, though he understood that Koirala had problems with the
current King. The King had assured Deuba that he supports
the present democratic system.

Pending Security Measures
--------------


10. (C) Deuba told the Ambassadors he had called an all-party
meeting for April 15 to discuss ways of heading off the
upcoming general strike, or "bandh," scheduled for April
23-27. He plans to hold political rallies and similar events
to get people into the streets. The PM also pointed out that
Nepal's newly formed National Security Council had begun to
function. One of the NSC's functions is to investigate human
rights abuses, he noted, and the head of the NSC himself will
handle the human rights portfolio.

New Measure to Control Endemic Corruption
--------------


11. (C) Asked about corruption in his administration, Deuba
stated that he knew that at least half of his cabinet members
were corrupt, but his government would fall if he moved to
get rid of them. A survey of office-holders' property was
underway; this would be used as a benchmark later on to see
who had acquired substantial property during their term of
office. Deuba also noted that a new anti-corruption bill had
been passed by the lower house of Parliament. (Note: A vote
in the upper house could come as early as the evening of
April 12, the Parliament Secretariat told us.)

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


12. (C) During breakfast, Deuba's obvious pleasure at growing
international support for Nepal and India's cooperation in
the return of the wounded Maoists was tempered by his
distress over the overnight attacks in western Nepal.
Although his position looks secure for now (Ref A),he faces
enormous challenges in the days to come. Meetings at the
highest level in Washington will raise his standing both at
home and abroad and ensure a measure of continuity as Nepal
grapples with the increasingly menacing Maoist insurgency.
MALINOWSKI