INDIAN PUNDITS PRESS FOR NEW DIRECTION IN NEPAL

C O N F I D E N T I A L SECTION 01 OF 05 NEW DELHI 004131

SIPDIS

E.O. 12958: DECL: 06/01/2015
TAGS: PREL PTER PHUM MASS IN NP UK
SUBJECT: INDIAN PUNDITS PRESS FOR NEW DIRECTION IN NEPAL
POLICY

REF: A. KATHMANDU 1123


B. NEW DELHI 2220

C. NEW DELHI 1426

Classified By: A/DCM Geoff Pyatt, for Reasons 1.4 (B, D)


1. (C) Summary: Delhi-based Nepal-watchers are split in
their diagnosis of the strength of the competing factions in
Nepal, and on their prescriptions for an end to the country's
political crisis. The GOI decision to release non-lethal
military assistance to the RNA and press reports of Indian
contacts with the Nepalese Maoists have sparked widespread
complaints that India has no coherent Nepal policy. Local
pundits and Nepal experts recommend options ranging from full
support of the King for military operations against the
Maoists to sanctions on Nepal to force the Palace to
negotiate with the political parties and Maoists. However,
the GOI has for now continued its course between the two
extremes, giving cautious backing to the King but pressing
him on democracy, and seeking to avoid any daylight with the
US. The GOI's immediate focus is to encourage the King and
parties to negotiate. End Summary.


2. (C) Recent discussions with New Delhi-based Nepal experts
reveal no consensus on the best way to resolve the impasse
among the Palace, the parties and the Maoists in Nepal.
However, they broadly assert that Indian policy has been
lackluster and directionless, criticizing the apparent shifts
of position manifested in the initial GOI condemnation of the
"royal coup," the subsequent decision to resume non-lethal
military assistance, and media reports of GOI contacts with
the Maoists.

Indian Policy Debates
--------------


3. (C) The divergent views among Nepal-watchers here on the
prospects for a compromise between the King and the parties,
the strength of the different actors, and the willingness of
the King to accept true democracy are mirrored by indecision
within the GOI. The UPA government initially staked out a
pro-democracy position, following its identification of
democracy promotion (refs B and C) as a key element of Indian
foreign policy. Since then, however, conflicting factions of
government and society have pulled Indian policy in
alternating directions.


4. (C) The swift GOI condemnation of the Palace's moves
earned praise from its Left Front governing partners, who see
ideological brethren in the Marxist and Maoist groups in
Nepal opposing the King. These parties, buttressed by human
rights NGOs and democracy activists in India, see the King as
a reactionary despot who should be opposed at all costs, and
support the political parties as the defenders of democracy
and human rights in Nepal. This perspective is shared by an
influential circle of national security hawks, including
former Deputy NSA Satish Chandra, who sees the Nepalese
monarchy as a doomed enterprise and argues that India should
pave the way for a republican Nepal. On May 31, Chandra told
Poloff that by appearing to back the King, India and the US
were picking the losing side, as the monarchy was an
"anachronism" that would eventually disappear. Siding with
the King now would cause the US and India to lose the
opportunity to influence the course of events in
post-monarchy Nepal.


5. (C) In contrast, most of the Indian security
establishment sees the Nepalese Maoists as actual or
potential collaborators with India's naxalite insurgents, and
Hindutdva-based political parties proclaim an affinity to the
world's only Hindu monarch. These factions have emphasized
India's historically close relations with the Nepalese
monarchy and the danger of the Nepalese Maoists forming a
"revolutionary zone" from Nepal through central India to
argue for backing the monarchy to the hilt. This internal
and external pressure has convinced the GOI to begrudgingly
accept the need to deal with the King, particularly in
security assistance to repel the Maoists. Squeezed between
these extremes is the Foreign Ministry, which shares our twin
objectives (no Maoist victory and return to democracy),
values the policy partnership with the US, and is trying to
navigate between competing Indian interest groups.
Support the King Now, But Later...
--------------


6. (C) Former Ambassador to Nepal KV Rajan reflected broader
sentiment among many Nepal experts when he commented to
Poloff recently that GOI policy toward the King has been
"backwards." Instead of cutting off military supplies and
demanding democracy, the present requirement is for stronger
support for the King against the Maoists, he argued.
Conversely, the GOI's constant reiteration that
constitutional monarchy is one of the "twin pillars" of
government in Nepal in the future is also misguided: the GOI
should back the King now but be ready to "help him depart the
scene" once the present crisis is over. In contrast, he
said, the USG approach better recognized the real threat
posed by the Maoists.

7. (C) Rajan outlined the elements of his ideal path for
Nepal's future (which he admitted was optimistic):

-- Strong military action to take the fight to the
Maoists;

-- Split in the Maoist leadership and subsequent
faltering of the insurgency;

-- New leadership in the political parties with better
credibility and stronger commitment to good governance;

-- The King's realization that he cannot hold back
demands for democratic reform forever.


8. (C) With these steps, he argued, revitalized political
parties will gradually win concessions from the Palace on
democratic reforms. Rajan felt that with this view of
Nepal's future, the time was ripe for informal consultations
with Nepalese elites on the structure of a future democratic
government in Nepal.

King as Usurper
--------------


9. (C) Dissenting from this optimism, MG (ret) Ashok Mehta
and Lt Gen (ret) Dipanker Banerjee recently gave more gloomy
assessments of Nepal's future. Mehta told Poloff on May 20
that his contacts in Kathmandu have heard rumors that the
King was planning to appoint Surya Bada Thapa as a new Prime
Minister, but that Thapa had declined to accept the post
without guarantees of freedom of action in his office. The
King's unwillingness to grant this assurance was indicative
of his determination to keep all power, Mehta said. In a May
24 meeting, Banerjee agreed that the King fundamentally
opposed democracy or infringements on his power, and that all
of his moves since February 1 have only been "tactics" aimed
at preserving his governing role.


10. (C) Banerjee also dismissed the willingness of the
current party leaders to compromise with the King. They will
not change their character "even if they realize that they're
playing into the Palace's hands," he said. What has changed
in the past month, he stated, was India's willingness to
accommodate the intransigent positions of the King and the
parties. The GOI wants democracy, but it wants law and order
even more, and is willing to settle for minimal guarantees of
essential freedoms. However, this gives the King an
opportunity to "play at granting freedoms" while not giving
in on any restoration of democratic government, Banerjee
warned.


11. (C) Rajan noted that the King "has a point" when
complaining about the parties' corruption, and the parties
lack credibility in Nepal as a result. It is therefore
incumbent on India to "support a new generation" of party
leaders, Rajan said, adding that as they displace the current
leaders, the King will have no excuse for not engaging the
parties on political reforms. Rajan was optimistic that if
the King is able to beat back the existential threat from the
insurgency he will feel more secure, and thus more open to
talk of democracy. Even if he was not so inclined, Rajan
added, once the immediate danger of a Maoist takeover has
faded, the pressure for democratic reform would be
overwhelming, and India would then be free to apply pressure
to the King to accept the change.

Maoist Strength?
--------------


12. (C) Rajan argued that India needs give the King more
leeway to make progress against the Maoists. Aggressive
military action combined with Maoist disarray following the
public split between leaders Prachanda and Bhattarai could
dismantle the Maoist insurgency as a threat to Nepal's
government. Rajan asserted that the King, if he had not
caused it, was working to exacerbate the internal strife in
the insurgency through Maoist agents "on his payroll." Under
no circumstances, argued Rajan, should the Maoists be given
quarter, unless as individuals they renounce the movement.
He strongly condemned proposals to include the Maoists in a
democratic government, and urged the GOI and USG to help the
King pressure the Maoists militarily as a way of persuading
individuals to give up the insurgency.


13. (SBU) In contrast, Mehta dismissed the notion that the
split in the Maoist leadership had undermined their
capabilities. He noted that the movement had survived thus
far without major dissension and internal struggles, and
predicted that Prachanda's personal following was sufficient
to guarantee a cohesive party in the near future, despite the
disagreements with Bhattarai.


14. (C) Although Mehta and Banerjee agreed that the Maoists
were unable to pose a military threat to the RNA, they warned
that the RNA could be weakened by political events and Maoist
tactics. Mehta speculated that in the current impasse
between the parties and the King, the parties will engage in
escalating protests, and that the King will be forced to
deploy an increasing number of RNA troops in the Kathmandu
valley to quell political agitation. This reduction in the
available troop strength could lead to Maoist victories
outside of Kathmandu. Mehta stated that the Maoists were
intimidating RNA soldiers' families, demanding that the
soldier quit or face reprisals. In the face of the extortion
and threats, and forced to fight their own countrymen, the
RNA was losing 200 soldiers each month, Mehta asserted. He
worried that Maoist pressure tactics, if continued, could
convince entire RNA units to desert, undermining morale
throughout the army.

GOI Position on Maoists Questioned
--------------


15. (SBU) Media reports that Maoist leader Baburam Bhattarai
had met Communist Party of India (Marxist) general secretary
Prakash Karat under the auspices of Indian intelligence
services in late May stoked a new round of public debates in
New Delhi. While the Nepalese Palace and its Indian
supporters have condemned any GOI involvement as a betrayal
of India's decision to support the King against the Maoists,
other commentators see engagement with the Maoists as a
positive step. Mehta remarked that he has long encouraged
his GOI contacts to maintain a liaison to the Maoists, to
hold open a pathway for them to join in a political process
after renouncing violence. Going farther, a May 27 Times of
India editorial called on the GOI to encourage the Maoists to
participate in a democracy in Nepal, arguing that Nepalese
"democracy will cure Maoism" even as Indian democracy has
drawn parties with revolutionary rhetoric into the political
mainstream. Jawaharlal Nehru University Professor of South
Asian Studies SD Muni likewise applauded this outreach to the
Maoists, welcoming it as a restoration of balance in India's
approach to the Nepal issue.

16. (SBU) However, the revelation of a GOI role in
chaperoning a wanted Maoist around New Delhi also elicited
criticism that government branches are working at cross
purposes. In an effort to end the controversy, the MEA
spokesman stated on May 26 that the GOI still considers the
Maoists as a terrorist organization, but did not explicitly
repudiate the possibility that Bhattarai had visited New
Delhi. On May 31, Muni told guests at a lunch for a visiting
HIRC staff member that the apparent shifts of policy on
military assistance for the RNA and the Bhattarai visit to
New Delhi showed that the collaboration among the US, UK and
India was "in tatters." (Note: Muni's disparagement of US
policy was influenced in part by a mistaken media report of
Ambassador Moriarty's remarks in Kathmandu as described in
ref A. End note.)

GOI on Political Solution
--------------

17. (C) Under Secretary (Nepal) Manu Mahawar repeated MEA's
condemnation of the Maoists to Poloff on May 31, but agreed
that ultimately the insurgency must be resolved politically,
as the RNA does not have the capacity to force a military
defeat on the Maoists. Mahawar said that the GOI is urging
the parties to unite and engage the King in negotiations for
a compromise on democratic government, and hopes that the
announcement of non-lethal military supplies to the RNA would
be an incentive for the Palace. However, he admitted that
India had not yet seen the steps toward democracy that the
King had promised to PM Manmohan Singh in Jakarta in April.


18. (C) Mahawar reviewed the GOI's desired roadmap for a
reconciliation between the Palace and political parties,
leading to a joint approach to talks with the Maoists.
Indian efforts were now aimed at encouraging the King and
parties to come together, Mahawar said. He added that the
King and the parties have separate contacts with the Maoists,
but that no mediation among the groups would be possible
until the Maoists renounce violence and the fundamental power
struggle between the King and parties was resolved. The King
was unwilling to part with power, but he "can't continue" on
this path indefinitely, observed Mahawar, as the Nepalese
economy suffers from uncertainty, strikes and blockades, and
donors and businesses leave Nepal.

Political Options
--------------


19. (C) Ambassador Rajan suggested that the US, India and
the UK, along with providing more support to the King to
suppress the Maoist insurgency, should create a "Tier 2"
contact group to begin formulating plans for the future of
Nepal. As governments could be constrained politically in
making public proposals, Rajan suggested a non-governmental
group that could talk to the "twenty or thirty people in
Nepal who count" to start formulating proposals for the role
of the monarchy in a future government. This must be done in
a low-key way to influence the right people, but not make the
King feel insecure, he stressed.


20. (C) In contrast, Gen. Mehta believed that strong
pressure from the US, UK and India could persuade the King in
the near future to accept a political compromise with the
parties, leading to a national government that the Maoists
would accept as a negotiating partner, eventually bringing
the Maoists into the political system as a peaceful movement.
In order to achieve this, our three governments should agree
at the Foreign Minister level to demand that the King
reinstate a democratic government or face sanctions, and be
ready to follow through on the threat. Former DNSA Chandra
commented that the Palace was vulnerable to an Indian
blockade of fuel supplies, and suggested that India use this
lever to force the King to negotiate with both the parties
and the Maoists.

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


21. (C) As the GOI recalibrates its approach to the
monarchy, the political parties and the Maoists, the need for
coordination between the US and India is even more urgent.
It works to our advantage that the GOI continues to place a
very high priority on close coordination with the US, and the
avoidance of any perceived daylight between Washington and
New Delhi. The apparent espousal of divergent policies by
different branches of the GOI undermines both the Indian
message to the political entities in Nepal, and the unified
front portrayed by the US, UK and India. While Nepal
watchers here disagree on the optimal policy, they all agree
that a more clearly articulated position by the US, UK and
India would strengthen efforts to resolve the impasse in
Nepal.
BLAKE