NEPAL: KING NAMES NEW PRIME MINISTER

C O N F I D E N T I A L SECTION 01 OF 02 KATHMANDU 001033

SIPDIS

STATE FOR SA/INS
LONDON FOR POL - GURNEY
NSC FOR MILLARD

E.O. 12958: DECL: 06/03/2013
TAGS: PGOV NEPAL'>NP GON
SUBJECT: NEPAL: KING NAMES NEW PRIME MINISTER

REF: KATHMANDU 1011

Classified By: CDA ROBERT K. BOGGS. REASON: 1.5 (B,D).

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SUMMARY
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1. (C) On June 4 King Gyanendra named former National
Democratic Party President and four-time former Prime
Minister Surya Bahadur Thapa to head a new interim
government. The Palace is reportedly seeking the
participation of other mainstream political parties in the
Cabinet. Many observers blame Indian intervention for
scuttling the nomination of Madhav Kumar NEPAL, General
Secretary of the Communist Party of NEPAL - United Marxist

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Leninist (UML). Although the five political parties that had
been agitating against the King are withholding official
statements until after a joint meeting on June 5, initial
reactions from the three largest have been universally
negative. An updated biography of Thapa will be sent septel.
End summary.

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CONSENSUS OR NOT,
WE HAVE A CANDIDATE
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2. (C) At 5:00 p.m. local time on June 4, the National News
Service announced that King Gyanendra had appointed former
National Democratic Party President and four-time former
Prime Minister Surya Bahadur Thapa as the "consensus
candidate" to head a new interim government. (Note: Three
of Thapa's four terms as PM were during the autocratic
Panchayat era. End note.) Prabhakar Rana, confidant and
business partner of King Gyanendra, had alerted the Charge
that morning of the impending announcement, adding that
several other Cabinet posts might be named at the same time.


3. (C) Rana expressed confidence that the NEPALi Congress
would join a Cabinet headed by Thapa. The party had never
been "internally comfortable" with its backing of Communist
Party of NEPAL - United Marxist Leninist (UML) General
Secretary Madhav NEPAL, Rana said, and has since indicated to

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the Palace that it might join an all-party government headed
by Thapa. (Note: We have since heard that at least one
renegade member of the NEPALi Congress, who has been on the
outs with party leadership for some time, may be tapped. End
note.)


4. (C) Charge was also contacted by N.N. Yadav, a member of
the factionalized NEPAL Sadbhavana Party. (Note: The
Sadbhavana Party, which commanded all of five MPs in the
former Parliament, split after its Acting President, Badri
Prasad Mandal, joined the interim government under former
Prime Minister Chand. Mandal's faction--which can still lay
claim to recognition by the Election Commission--commands
just two of the five former MPs. End note.) Yadav predicted
that the political parties will support Thapa's nomination,
citing his creditable record as a democrat. NEPAL's
candidacy as PM was never a real possibility, Yadav said,
because of Indian opposition to him. Thapa, in contrast,
enjoys substantial Indian support, Yadav claimed.


5. (C) UML Central Committee member Jhala Nath Khanal told
poloff that the UML is obviously displeased by the King's
decision to disregard its leader's nomination. The King may
also make several of his own appointments to the Cabinet, he
predicted glumly. (Note: Police sources say they expect UML
Central Committee member K.P. Oli, who opposed NEPAL for the
party leadership, to be named as Deputy Prime Minister.
NEPAL and Oli are personal and political rivals. End note.)
If so, the UML will not agree to take part in the new
all-party government. The Palace may attempt to entice party
members into the new government, but the parties would then
revoke those renegades' membership, Khanal said. The party's
Standing Committee will decide its official position later
this evening.


6. (C) NEPALi Congress spokesman Arjun Narasingh K.C. told
poloff that his party would not participate in a government
under Chand. A Thapa government appointed by the King will
offer "the same old scenario" as under the Chand government.
The five parties that had demanded an all-party government
and had proposed NEPAL's nomination will meet on June 5 to
plan next steps, K.C. said. NEPALi Congress (Democratic)
Central Committee member Sagar SJB Rana also informed poloff
that his party had decided to back NEPAL's nomination and was
thus equally unlikely to take part in a Thapa Cabinet. The
Palace never offered any explanation for why NEPAL's
nomination was not accepted, representatives of all three
parties reported.

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INDIA TAKES A NEIGHBORLY INTEREST?
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7. (C) Most sources contacted--with the exception of royal
confidant Prabhakar Rana--speculate that Indian influence was
the main reason that NEPAL's nomination was rejected and
Thapa's promoted. Many saw Thapa's mid-April visit to India
as significant. Some also cited the visit of former Indian
Ambassador to NEPAL K.B. Rajan, which coincides with the May
30 resignation of PM Chand and Thapa's June 4 appointment.
Another recent visitor to NEPAL, Professor S.D. Muni, an
Indian academic with long-time experience in NEPAL who
maintains links to MEA, had a lengthy meeting with Baburam
Bhattarai on April 25--directly after emboffs met him. When
asked why he thought NEPAL's nomination had not been
accepted, UML member Khanal immediately pointed to "the
visits by our neighbors." Other Palace sources claimed
strong Indian opposition to NEPAL had helped scuttle his
nomination. (Note: We have no way of knowing whether any of
these claims are true, but they have enough popular currency
to bear mentioning. End note.)

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COMMENT
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8. (C) Madhav NEPAL may have been unacceptable to the Palace
for a number of reasons, not the least of which may be the
prominent role he played in recent, near-daily protests
against the King. Despite receiving the backing of five of
the seven political parties whose consensus the King sought,
NEPAL had enough other opposition from influential
quarters--including, apparently, from the Indians, the
Maoists, and the Palace itself--to quash his candidacy.
Initial reactions from the biggest parties (the UML, the
NEPALi Congress, and the NEPALi Congress (D)) do not bode
well for efforts to form the all-party Cabinet sought by the
Palace, demanded by the parties, and hoped for by donors.


BOGGS