REGIONAL DIALOGUE WITH A/S ROCCA: NEPAL

C O N F I D E N T I A L SECTION 01 OF 02 NEW DELHI 002951

SIPDIS

E.O. 12958: DECL: 04/19/2015
TAGS: PREL KDEM PTER NP IN
SUBJECT: REGIONAL DIALOGUE WITH A/S ROCCA: NEPAL

Classified By: PolCouns Geoff Pyatt. Reasons 1.4 (B, D)


1. (C) Summary: During their April 18 Regional Dialogue
discussion, A/S Rocca and MEA officials reviewed recent
developments in Nepal, with the GOI offering a pessimistic
assessment of the King's intentions. (See septel for
Bangladesh and Sri Lanka portions). Following the Indian
Ambassador's April 15 meeting with the "unconcerned" King
Gyanendra, MEA Joint Secretary Ranjit Rae (Nepal, Bhutan) was
concerned that the Palace had no plan for a return to
democracy in Nepal. Despite the "security stalemate," Rae
did not think the Maoists could prevail, and was doubtful
that China or Pakistan would step in to supply the RNA. He
described the political parties as "seriously divided" and in
need of a common agenda, and the country's economic outlook
as increasingly bleak. A/S Rocca stressed our commitment to
see democracy restored, suggesting the US and India should
coordinate messages to the political parties in an effort to
develop a reconciliation agenda. End Summary.

Indian Ambassador: King "Unconcerned"
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2. (C) Rae led off the discussion with a readout on Indian
Ambassador Shiv Shankar Mukherjee's 80 minute April 15
meeting with King Gyanendra. The King, who did most of the
talking, restated his commitment to multiparty democracy, but
Rae doubted his sincerity, and said that the meeting resulted
in no forward movement. The confident and relaxed King
informed Mukherjee that the situation in Nepal had improved,
and referred to international insistence on democracy in
Nepal as a "passing phase." Explaining that detentions were
necessary for security reasons, and that the RNA is not
involved, the King noted his intention to strengthen
counterterrorism efforts and the need for the parties to
clarify their position on terrorism, democracy, and other
issues.

Security Stalemate
--------------


3. (C) A/S Rocca laid out US policy on Nepal, specifically
that our primary objective was not to allow the Maoists to
gain the upper hand. She explained that military assistance
is suspended, and asked Rae where India thought the "tipping
point" was in the military situation. Describing the
military situation in Nepal as a "stalemate," Rae emphasized
that since the February 1 coup, security in the country had
declined. While the Maoists are not in a position to take
and hold urban centers (he noted that only 40 percent are
armed),they are capable of making their presence felt. The
RNA has been in a "reactive" mode, and has not moved
forcefully to take on the insurgents. Despite that, the Army
was stronger than it used to be, in part because of decisions
by the Palace to let the RNA call the shots with district
administrations. New Delhi had assessed that the RNA could
sustain itself for three months after the GOI ceased military
support. Rae explained that New Delhi had suspended its
program to train 10,000 Nepali police after the last batch of
500 returned home.


4. (C) Rae predicted that Pakistan and China would not
support the GON militarily, but expressed concern that
continued USG supply of non-lethal equipment would send an
unintended positive signal to the King. Rae highlighted the
King's upcoming trips to China and Jakarta for the Bandung
Conference anniversary, at which the GOI is undecided on a
meeting between PM Manmohan Singh and Gyanendra. On
rescheduling the SAARC Summit, Rae would not be drawn out on
the specific linkage between India's attendance and the
King's policies.

Parties Should Not Join the Maoists
--------------


5. (C) Commenting on the political situation, Rae stated
that agitation was still limited to Maoist party cadres, with
little evidence of broadening support. Within the parties,
which are "seriously divided," younger members tend to favor
cooperation with the Maoists, which the insurgents are
pressing for to gain legitimacy. The Indian message to the
parties was one of caution against such an association, Rae
noted, remarking that the parties need to decide on a common
agenda for reconciliation and what they want to fight for.
The Maoists have guns and the parties do not, he noted. Rae
expressed disappointment that the King was using the
interregnum to consolidate his power through the appointment
of District Commissioners that report directly to him, and
other moves to revive direct administration.

Don't Forget the Economy
--------------


6. (C) Rae said the increasingly bleak economic outlook in
the country since February 1 was less of a focus for the
international community, but also very important. While life
in Kathmandu was "normal," a series of Maoist strikes had
been effective in other parts of the country. Indian
businesspeople were complaining to the GOI, and hotel
occupancy rates had plunged to 10-15 percent.
Support the Reconciliation Process
--------------


7. (C) A/S Rocca said we are waiting to hear about the
King's "roadmap" when we reach the 100-day mark, but did not
as yet have any indication that there is such a roadmap, and
suggested that the US and India should continue to coordinate
messages to the political parties in their effort to come up
with an agenda for reconciliation. Rae agreed, pointing out
that privately that had been GOI policy. Rae told A/S Rocca
that for now the GOI would continue to call for an end to the
emergency and media restrictions, along with cooperation
between the Palace and parties, but would resist calls for
the GOI to endorse any particular formulation for reviving
the democratic process.

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


8. (C) This conversation reflected the deepening level of
candor in the US-GOI exchange on Nepal, and the high priority
that New Delhi places on our collaboration in that area. It
was clear from the Indian presentation that the MEA remains
deeply disappointed with the King's lack of movement towards
democracy, and is far from a decision to normalize their
assistance relationship.


9. (U) A/S Rocca has cleared this message.
BLAKE