EMBASSY, INDIAN EXPERTS COORDINATE ON NEPAL

C O N F I D E N T I A L SECTION 01 OF 03 NEW DELHI 006527

SIPDIS

C O R R E C T E D COPY (TEXT CHANGE IN PARA 1, 2, 3, 7 AND 8)

SIPDIS

E.O. 12958: DECL: 09/19/2026
TAGS: PREL PGOV MOPS KDEM NP IN
SUBJECT: EMBASSY, INDIAN EXPERTS COORDINATE ON NEPAL


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Classified By: DCM Geoffrey Pyatt for Reasons 1.4 (B, D)


1. (C) SUMMARY: Over Sep. 18th and 19th, PolCouns led a
round-table on Nepal and met with leading Indian Nepal
experts with the objective of enhancing our ability to
coordinate with India on Nepal. From these meetings,
it appears that two camps exist within India's policy making
elite on prospects for the Nepal peace process. The first camp,
with a large number of adherents, sees the glass as half full,
regards the peace process at five months old as still nascent,
asks observers to understand the ups and downs involved and
ultimately feels the Maoists will be content with joining a
Constituent Assembly. The second camp sees Maoists as pursuing
their own interests and ultimately intent on controlling the
government on its own. The two camps also divide on how India
would respond to a worst-case scenario, with the pragmatists
convinced India would intervene militarily should Nepal fall into
chaos and realists, based on India's past practices, convinced
that India would stay on the sidelines. All agree the U.S. and
India have the greatest influence, but criticize the U.S. for, at
times, appearing to be interventionist. END SUMMARY.

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Pragmatist Camp
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2. (C) Over a round-table lunch on Sep. 18th, Ret. Maj. Gen.
Ashok Mehta, Mr. Niranjan Koirala (PM Koirala's nephew) and
former Ambassador Sukh Deo Muni spoke for the pragmatist camp,
all agreeing that the peace process in Nepal will take time.
They pointed out that the basic agreements are in place and
feel that the peace process is on the right track. Koirala,
who had met with his uncle a week prior, said that after
fighting and standing for their principles, the Maoists won't
return to the jungle now, but rather will accept taking a
part in the government and joining the Constituent Assembly.
He said it is likely that the Maoist party will split and
some factions might choose not to be included -- but the
majority of Maoists want to join the government. Gen. Mehta,
who traveled to Nepal's hinterland in August, is optimistic
that the summit meeting on Sep. 23rd between Prachanda and
Koirala, will help create confidence for all parties.

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Realist Camp
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3. (C) The Executive Director of a think-tanker, Dr. Ajai
Sahni, and journalist Surendra Phuyal spoke for the realists,
stating that the Maoists are only engaged in talks now in order
to facilitate the seizure of power. "They don't want to be a part
of the government," said Dr. Sahni, "they want to be the
government." Sahni and Phuyal believe that the Maoists will not
change their behavior, but will continue to do as they've done in
the past. They believe that, whether by government or by force,
the Maoists are planning a takeover and aren't prepared to
cooperate. "Even if the Maoists accept an agreement now, it
doesn't mean they won't go to war later," Sahni argued. The
Maoists will continue to be stubborn, will not make concessions
and will refuse to disarm before the election, he contended.

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Split Also On Worst-Case Scenario

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4. (C) The two camps also divide on how India would respond
to a worst-case scenario of disintegration into civil war.
Gen. Mehta referred to an Indian contingency plan for that
event and was absolutely convinced that India would intervene
militarily, albeit only as a last resort. Dr. Sahni, noting
that India did not intervene during previous breakdowns in
Nepal, countered that view, saying "Indian assistance will
never involve boots on the ground." His view is that India
will accept the Maoists as "just another government." Mehta
offered that the Maoists don't have the capacity for a
sustained take-over, however, and believe that if the Maoists
could win a war, they would have done so already. Sahni was
less optimistic, stating that a military takeover is only one
act in a long, slow dissolution of power in Nepal. The
experts agree that the worst-case scenario to be avoided
would be a civil war in which the U.S. and India are forced
to choose sides. "It is important for the U.S. and India to
develop contingency plans in the event the situation
deteriorates into just such a scenario," former Ambassador
K.V. Rajan said.

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Four Steps to Peace and a Golden Handshake
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5. (C) On the disarmament issue, local journalist Bharat
Bhushan pointed out that language is of paramount importance,
suggesting that phrases such as "managing arms" and "joint
custody" could be swallowed more easily by the Maoists. He
laid out a 4-step plan for stabilization:

-- 1) Allow the interim government to take the first
step and dissolve the Parliament. They will keep passing
laws and legislating with no authority otherwise.

-- 2) At the same time, arrange "joint custody" of arms
between the Maoists and the UN and have the government send
the army to its barracks.

-- 3) Replace Parliament with a nominated interim
legislature or expand the existing Parliament. The important
thing is to give the Maoists a stake in the process, along
with the SPA and civil society.

-- 4) Create a para-military force and absorb and
disperse the Maoists into various places in the army. Keep
them apart and give them tasks like tree-planting and border
patrol. This would be a kind of "golden handshake" of
gainful employment to the Maoists. "If you give them a
lump-sum they will waste it," Bhushan stressed. "Giving them
food and a salary will prevent them from returning to the
mountains."


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The U.S. and India's Influence
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6. (C) Realists and pragmatists agree that both the U.S. and
India carry a lot of weight in Nepal, and find that it makes
a lot of difference to the Nepalese to see no divergence
between the U.S. and the GOI. They stressed that Nepal (and
the Maoists) heed what the international community says, so
India and the U.S. should come out "loud and strong." Public

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statements should be coordinated between the two countries,
Rajan suggested, and we should concentrate on improving the
situation on the ground, as people are "being terrorized and
losing hope."

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A Slap at the U.S.
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7. (C) While being influential is one thing, appearing to
intevene another our interlocutors pointed out. Former
Ambassador Muni sharply criticized the U.S. for appearing to
side with the Nepalese Army through an ambassadorial visit to
the barracks, as this action appeared to signal the Maoists that
the U.S. was interfering with the peace process. Koirala felt
that "as a matter of strategy, it shouldn't be done."

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COMMENT
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8. (C) Our interlocutors are New Delhi's most influential
private sector figures on Nepal. Reflecting the complexity of
the situation in Nepal, these luminaries can't agree on how
the peace process will play out from here. While GOI contacts
continuously reassure us that the U.S. and India "see eye-to-eye"
on Nepal, these well-connected civilian contacts suggest Indian
policymakers are watching the process unfold and will adjust to
contingencies. Keeping a pulse on their read-out of the current
situation in Nepal will help us coordinate with India. We will
seek further engagement with GOI officials and look for
opportunities to leverage our collective influence as appropriate.
END COMMENT.
MULFORD