NEPAL: UPCOMING NEGOTIATIONS WITH MAOISTS PRESENT

C O N F I D E N T I A L SECTION 01 OF 03 KATHMANDU 001559

SIPDIS

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

E.O. 12958: DECL: 08/12/2013
TAGS: PTER PGOV NP
SUBJECT: NEPAL: UPCOMING NEGOTIATIONS WITH MAOISTS PRESENT
INCREASED RISKS AND OPPORTUNITIES

REF: A. KATHMANDU 1552

B. KATHMANDU 1423

C. KATHMANDU 1216

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

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SUMMARY
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1. (C) The third round of negotiations between the
Government of Nepal (GON) and Maoist insurgents, scheduled to
take place on August 17 in the southwestern city of
Nepalgunj, could prove a watershed in the fitful peace
process. We expect this round to be more substantive--and
thus potentially more problematic--than the two earlier
sessions held under the previous interim government. The
Maoists will likely find the newest team of GON negotiators
better prepared, more proactive and less yielding than its
predecessor. If the Maoists believe that they will be unable
to wring further concessions from the GON through
negotiations, hardliners within the insurgent leadership
could push to break the ceasefire. The role of India could
be decisive in pressuring the Maoists to stay in talks. It
will be important for the USG and others in the international
community to express strong public and private support for
GON efforts in the peace process. End summary.

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A LEANER, MEANER GON TEAM
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2. (C) The August 17 round of talks between the Government
of Nepal's (GON) new negotiating team and its Maoist
counterpart likely will prove both more substantive and more
contentious than either of the two previous sessions (held on
April 27 and May 9) under the government of former Prime
Minister Lokendra Bahadur Chand. Throughout the course of
the earlier rounds, Chand's five-person team, hobbled by
internal political rivalries, inexperience, and, perhaps, a
lack of clear direction from the Palace, failed to develop
either a comprehensive set of goals for the negotiations or a
cohesive strategy aimed at obtaining them. This flaccid
negotiating style, unfortunately, played into the hands of
the more aggressive Maoist talk team, whose numerous, often
lengthy demands dominated the agenda, which a passive GON
side often accepted without any counter-proposals of its own.
The political cost of this ad hoc, disorganized approach to
negotiating became painfully apparent in the May 9 round when
the GON team let itself be bulldozed into agreeing to a 5 km
restriction for Royal Nepal Army (RNA) soldiers--only to have
to repudiate the ill-advised concession publicly after a
storm of protest from the indignant and unconsulted RNA
leadership.


3. (C) The new two-man team appointed by PM Surya Bahadur
Thapa seems better prepared, better focused, and to be taking
greater initiative than its feckless predecessor. GON
negotiators (Information Minister Kamal Thapa and Finance
Minister Prakash Lohani) held a series of informal meetings
with Maoist leaders before setting a date for fresh talks.
While agreeing to fulfil some concessions made in the
previous two rounds (i.e., the release of certain Maoist
prisoners),the GON team held firm on rejecting other,
additional demands, such as personal participation of the
King in the peace talks, restrictions on the RNA, and
abrogation of an antiterrorism training agreement with the
USG (Ref B). Rather than allowing unrealistic Maoist demands
drive the agenda, the Thapa/Lohani team has seized the
initiative by preparing its own set of political proposals
intended to respond in part to key Maoist demands (Ref A).
The ill-defined framework for the previous rounds made it
easy for the Maoists to hijack the discussions by inserting
unrealistic surprise demands and threatening to break off
talks unless they were met. The establishment of a Peace
Secretariat within the GON (Ref C),which has drafted a set

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of procedures for the talks that the GON will ask the Maoists
to endorse at the August 17 meeting, should help keep the
agenda within stipulated boundaries, lessening chances for
the insurgents to commandeer the discussions.

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MAOIST NEGOTIATING TACTICS:
DEMAND, DENY, DECAMP
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4. (C) The Maoists clearly used the 2001 ceasefire to
rebuild their depleted strength and prepare for the next
stage of more intense conflict--taking on the RNA. Not
surprisingly, many--including many in the RNA--believe that
the insurgents' behavior during the current ceasefire, which
has seen Maoist extortion, intimidation, recruitment, and
training shoot into overdrive, suggests they are equally
insincere in pursuing a peaceful settlement this time. Some
see the recent uptick in Maoist violations of the
ceasefire--especially the abductions and murders of RNA
soldiers--as an attempt to provoke the security forces into
breaking the peace first. Negotiations, some believe, are
just one part of a long-term Maoist strategy to gain power by
alternately wresting political concessions from the GON
through talks and tactical advantage through armed conflict.
According to this view, the Maoists decided to accept a
ceasefire last January primarily in order to rebuild
diminished popular support and because they had determined
that the GON was prepared to grant them significant
concessions, and will continue negotiations only as long as
they perceive they can gain political advantage from
participating. The Maoists' confrontational negotiating
techniques--demand the maximum advantage, deny the slightest
concession, and repeatedly threaten to walk out on the
flimsiest of pretexts--has served them well thus far, cowing
the previous GON team into granting substantial commitments
(release of prisoners, restricting the RNA) without gaining
anything in exchange.


5. (C) For those who suspect the Maoists have no true
interest in a political settlement and are cynically using
the negotiations only to wring concessions from the GON, the
August 17 round of talks may prove a litmus test.
Unfortunately, neither the 2001 negotiations nor the two
rounds held earlier during the current ceasefire offer any
indication of how the Maoists may react to a more confident,
less accommodating GON posture across the table. The Maoists
are undoubtedly under pressure, both from hardliners within
their own organization and from restless, idle cadres in the
field to demonstrate that they can continue to make gains by
negotiating. Keeping the Maoists at the table will depend,
in part, on the nature of the political reforms the GON side
plans to offer the Maoists as a compromise (Ref A). Also
important will be whether the mainstream political parties
support the GON proposals and negotiating position. Finally,
whether India maintains the "pressure" cited by Maoist
negotiator Bhattarai as a principal reason that he agreed to
a third round (Ref A) will be crucial.

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IMPLICATIONS FOR U.S. POLICY
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6. (C) Many observers believe that if indeed the Maoists
break the ceasefire, the conflict can be expected to be even
more violent than before. It is thus more important than
ever that the USG, along with the rest of the international
community, express strong public and private support for GON
efforts in the peace process. Embassy's August 14 press
release applauding announcement of the third round (text
e-mailed to SA/INS) was well received by the GON (and, we
hope, by the Maoists as well). Other helpful measures could
include the following:

a) Negotiation Support: Many observers blame the GON's lack
of negotiating expertise for the lack of progress so far. We
will continue to pursue a source of USG funding (perhaps
beginning with reprogramming unobligated ESF funds ) for
quiet technical assistance to the Peace Secretariat and/or
GON negotiators. We would want to continue helping the
Secretariat to build its institutional capacity even if talks

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break down.

b) Political Parties: The Maoists had hoped to use the
ceasefire to win support from the mainstream political
parties--an effort that has clearly failed. At the same
time, however, the parties' opposition to the interim
government obviously undermines the GON position during the
negotiations. The parties--perhaps more than the Maoists
themselves--remain the wild card in the peace process,
potentially able to scuttle any settlement reached between
GON and insurgents if they feel it threatens narrowly defined
partisan (rather than national) interests. The GON
negotiators' pledge to share their political proposals with
the parties before the talks begin is an encouraging step
toward winning crucial multi-partisan support. We, along
with other key Embassies (such as the UK and India),should
redouble our efforts to persuade both the parties and the
GON/Palace to present a united front against the Maoists
during these sensitive negotiations.

c) Maintain Firm Posture toward the Maoists: The Maoist
leadership has publicly acknowledged that U.S. security
assistance played a pivotal role in persuading them to accept
a ceasefire. While publicly applauding efforts toward peace,
we should keep up our firm posture against Maoist violence
and terror. We will make clear both in public and private
communications that the Maoists must demonstrate their
sincerity by renouncing violence and ceasing threats against
American citizens and interests, including U.S.-sponsored
development projects. We will continue to press the GON to
raise, as it has promised to do in the August 17 session, the
safety and security of American citizens in its talks with
the Maoists. If the Maoists do revert to their past
terrorist practices, especially if they target U.S.
interests, interagency deliberations on whether they qualify
for U.S. anti-terrorist sanctions should resume.

d) International Support: The Maoists are acutely sensitive
to international opinion and would likely attempt to portray
any decision to break the ceasefire as having been "forced"
on them by the GON. Because of its overwhelming influence in
Nepal, India's posture during these negotiations is
absolutely crucial to dissuading the Maoists from breaking
the peace. We will urge our diplomatic colleagues in
Kathmandu--some of whom maintain contact with the Maoist
leadership--to stress through both public and private
channels that the Maoists must persevere in the peace
process. In particular, we will press our British and Indian
colleagues to maintain their own levels of security
assistance to the GON and urge the Indians to keep up
pressure on the Maoists. We recommend that parallel
demarches be made in Washington and in London and New Delhi.


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COMMENT
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7. (C) The tone set during the August 17 round may help
determine the longevity of a peace process that appears more
and more fragile. If the Maoists find enough political
advantage in the GON proposals to placate the hardliners in
their ranks, and if the Indians continue to exert helpful
pressure on the Maoists, negotiations will likely continue.
Absent either of these critical elements, we expect the road
toward peace to grow increasingly rocky.
MALINOWSKI