NEPAL: MORE MURMURINGS, BUT HOW MUCH MOVEMENT

C O N F I D E N T I A L SECTION 01 OF 03 KATHMANDU 002318

SIPDIS

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

E.O. 12958: DECL: 11/23/2013
TAGS: PGOV PREL IN NP GON
SUBJECT: NEPAL: MORE MURMURINGS, BUT HOW MUCH MOVEMENT
TOWARD BROADER GOVERNMENT?

REF: KATHMANDU 1768

Classified By: AMB. MICHAEL E. MALINOWSKI. REASON: 1.5 (B,D).

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SUMMARY
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1. (C) Once again, political circles in Kathmandu are
reporting signs that King Gyanendra may be considering
another initiative to broaden multi-party participation in
the government. The Palace reportedly has sent initial
feelers out for separate meetings with the heads of the two
largest political parties. The King's confidant and business
reporter, among others, told the Ambassador that King
Gyanendra, though satisfied with the performance of Prime
Minister Surya Bahadur Thapa so far, might replace him if the
parties were to forward an acceptable consensus candidate.
Who that candidate might be remains unclear. What does seem
clear, however, is that neither G.P. Koirala or Madhav Nepal,
the heads of the two largest political parties, appears to be
in the running. Several sources assert that Communist Party
of Nepal - United Marxist Leninist (UML) leader Madhav Nepal
may be gradually coming to accept the idea that he will not
be chosen, and may see making a deal with the Palace, along
with some of the other parties, as his best hope of shoring
up his own party's dwindling popular support. End summary.

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SIGNS OF AN OPENING?
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2. (C) Political insiders in Kathmandu are once again
reporting signs that King Gyanendra may be considering
another overture to mainstream political parties to join an
interim government. Party and Palace sources have told us
that the King had sent messages to the heads of the two
largest parties, Communist Party of Nepal - United Marxist
Leninist (UML) General Secretary Madhav Nepal and Nepali
Congress President G.P. Koirala, indicating his willingness
to meet separately with each. On November 19 Prabhakar Rana,
the King's confidant and business partner, confirmed to the
Ambassador that the King, while generally satisfied with the
performance of Prime Minister Surya Bahadur Thapa,
acknowledges that his hand-picked appointee has thus far been
unable to persuade members of other political parties to join
his government. If anything, the parties and the Palace are
farther apart than ever, Rana opined. The King recognizes
that any initiative to bring the estranged parties into the
government must come from him, Rana told the Ambassador.
While the King reportedly said that he does not want to
"change Prime Ministers every six months" (Thapa has been in
office for five months; his predecessor, Lokendra Bahadur
Chand, lasted eight),he nonetheless might consider replacing
Thapa if the parties can agree on an acceptable candidate and
commit to joining the government.


3. (C) Since obtaining consensus from all seven parties
might be difficult, if not impossible, the King, according to
Rana, has indicated a willingness to consider a consensus
candidate from just some of the parties. Since it might be
even more difficult for the parties to agree on a member from
just one party for Prime Minister, Rana continued, it might
be necessary to select a non-partisan person, such as an
independent politician or a retired Chief Justice, as a
candidate. As examples, Rana cited three possibilities (all
of whom held Cabinet posts during the autocratic Panchayat
era): former Panchayat Prime Minister Kirti Nidhi Bista,
Rajeshwore Devkota, and Keshar Bahadur Bista (now a nominal
member of the Nepali Congress).

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MADHAV MORE MODERATE;
G.P. STILL INTRANSIGENT
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4. (C) According to Rana's assessment, the political
parties do not want to face elections under the Thapa
government and are seeking a face-saving "out" to their
ongoing protest against the Palace and government. UML
leader Madhav Nepal seems the most amenable to joining a new
government, Rana reported, because his party is losing
supporters, both through murder and defecions, to the Maoists
at the grass-roots level. (Note: In recent statements to
the press, Nepal has declared that he would accept the
reinstatement of former Prime Minister Sher Bahadur Deuba as
a way out of the political stalemate. End note.) If the UML
decides to join a new government, Rana calculates that the
National Democratic Party (RPP),the Nepali Congress
(Democratic),headed by former Deuba, and the Terai-based
Sadbhavana Party, would follow suit.


5. (C) Nepali Congress President and former Prime Minister
G.P. Koirala remains problematic, however, Rana said. G.P.
has two major liabilities that make him unacceptable as a
candidate for PM: his advanced age and his insistence on
grooming his daughter (who has never run for office and is
not even a member of the Central Committee) to take over the
party leadership. Only the Indians, with their long-standing
influence over the party, can help bring G.P. on board, Rana
stated. Rana indicated that he plans to raise the subject
with other embassies and seek their support for the King's
(possible) initiative.

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RPP ALSO HOPEFUL
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6. (C) On November 25 the Ambassador met with Pashupati
Shumshere Rana, President of the National Democratic Party
(RPP). The RPP president echoed Prabhakar Rana's assessment
that a new "opening" for engagement between the Government
and the parties has recently arisen. The RPP president
credits the second-tier, "dissenting" leadership within the
UML for helping encourage this opening through their growing
awareness that Madhav Nepal is not a viable candidate for
Prime Minister. Rana claimed that the dissenters have
managed to persuade 11 out of 14 UML Central Committee
members that it is better for the party to make a deal with
the Palace--and thereby obtain some participation in a new
government--than to insist on a candidate it knows will not
be accepted. He predicted that the UML dissenters will be
able to persuade the remaining Central Committee
members--who, of course, include Madhav Nepal--to take this
more pragmatic approach. Once the UML decides to join a new
government, the RPP, Nepali Congress (Democratic),and the
Nepal Sadbhavana Party will do so too, Rana said. The
consensus candidate for Prime Minister is unlikely to be a
party leader, Rana noted, but might come from within the
second or third tiers of the leadership. Alternatively, he
suggested, the candidate could be someone from outside--a
technocrat or retired civil servant or other non-partisan
figure. The parties could either choose a consensus
candidate or forward a slate of suggested candidates to the
King for him to choose from. The Nepali Congress, headed by
G.P. Koirala, Rana agreed, is unlikely to join a new
government under almost any circumstances.


7. (C) Other sources have reported similar discussions to us
over the past week. Both Kirti Nidhi Bista and Keshar
Bahadur Bista confirmed to the Ambassador that they had heard
talk of a new government being formed around a non-partisan
figure (although both said they had not been asked by anyone
to be that figure. Keshar Bista said he would take the job
if asked; Kirti Bista said no one has asked). Radha Krishna
Mainali, a UML "dissenter" (so much a dissenter that his
party membership has been suspended for a year) described a
comparable scenario to the Ambassador on November 18. He
reported having received "signals" from Palace intermediaries
that the King might be considering forming a new government
under a "non-party political person" as Prime Minister. (We
note that Mainali is one of the few people we can think of
who fits this somewhat self-contradictory prescription.)
Another prominent businessman with ties to the Palace and a
well-informed political observer have both predicted that
Madhav Nepal, while still grappling with the realization that
he is unlikely to get the King's nod as PM, is too much of a
political pragmatist to miss an opportunity to make a deal
with the Palace. According to these sources, Nepal knows
that he is losing party cadres at the local level to the
Maoists and is thus the most motivated, among all the other
party leaders, to come to terms with the Palace. None of our
contacts expressed any misgivings about the viability of a
government whose two principal partners are communists and
royalists.
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COMMENT
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8. (C) Since the King dismissed the Deuba government in
October 2002, we have periodically heard reports--many of
them from Prabhakar Rana--of hopeful signs of rapprochement
between the parties and the Palace--most recently in
September when the parties were about to launch a coordinated
protest against the King's "activism" (Reftel). None of
these reported signs, obviously, has proven fruitful.
Proposals to name a non-party person as PM are also
familiar--PM Chand was supposed to have been such a
figure--and are equally unlikely to attract support from the
party leaders, unless they can be assured that the compromise
PM will offer no competition when elections are eventually
called. We have more faith in Madhav Nepal's pragmatism than
in his statesmanship. While it seems unlikely to us that he
would agree to step aside--especially in order to make way
for his rivals in the second rank--to save the nation, he
might do so to save his party, and thus his own longer-term
political future. The Government has come under increased
pressure recently from some donors to restore democracy and
to broaden political participation in the government. We
hope that the murmurings of a possible "opening" between the
Palace and the parties are not simply an effort to deflect
such criticism and attention.

MALINOWSKI