HIGH STAKES FOR INDIA IN NEPAL

C O N F I D E N T I A L SECTION 01 OF 02 NEW DELHI 007005 SIPDIS SIPDIS E.O. 12958: DECL: 10/09/2026 TAGS: PREL PGOV PTER PINR PBTS MOPS KDEM NE IN SUBJECT: HIGH STAKES FOR INDIA IN NEPAL Classified By: Charge Geoff Pyatt for Reasons 1.4 (B, D) ¶1. (C) SUMMARY: India's stakes in Nepal are high, yet, of all its neighbors, Nepal is the easiest to manage, according to MEA Americas Director Santosh Jha. Jha said the Maoists are long on guns, but short on strategy. They have created an "aura" of support, said Jha, but would be exposed in eventual elections, in which he expects they would win no more than 10-15% of the vote, if that. It is difficult to predict what will happen if the peace process does not continue, he said, but he does not think Nepal is vulnerable to a military coup. "If anyone has a stake in Nepal, it is India," according to Jha, who cited the Nepal-China border and Nepal's huge 80,000 MW hydropower potential as being of paramount interest to the GOI. END SUMMARY. -------------- Nepal the "Easiest" of India's Neighbors -------------- ¶2. (C) Nepal is the easiest of India's neighbors to manage, MEA Americas Director Santosh Jha argued in an Oct. 9 meeting with SCA India, Nepal, Sri Lanka and Bhutan Director Marcia Bernicat and DepPolCouns. Nepal is land-locked, its conflict is ideological vs. ethnic in nature, and its assets are concentrated, making the situation in Nepal manageable (as opposed to that of Sri Lanka, for example). Jha noted that the U.S. and India need to exercise concerted pressure on Nepal to continue the peace process, and offered that the GOI will give the political parties "all of the support they need." -------------- The Maoists: Long on Guns, Short on Strategy -------------- ¶3. (C) Jha stated that he doesn't believe the Maoists will give up their arms for an expected 10-15% share of power (via the electoral process),noting that even that number may be an over-estimation. Jha said that elections are not just a matter of guns, but of strategy. The best combination is to have both, he said, but he is not convinced that the Maoists have a strategy. They should not be allowed to come into the political process all at once, according to Jha. He noted that in geographically adjacent areas of India, the Maoists have not been able to win more than one or two seats in local elections. The Maoists in Nepal have created an "aura of support," Jha said, but stand to be exposed in eventual elections. �A; -------------- Nepal's 4 Weak Pillars -------------- ¶4. (C) When pressed by Bernicat about what would happen if the peace process is stalled, Jha stated that it is difficult to predict. He said that we will know much more before the elections, and noted that international opinion is highly influential. Asked by Bernicat what role he thought the military would play if the situation erupts into open conflict, Jha said that he did not think Nepal would experience a military coup as Thailand did. The fact that the Nepalese National (formerly Royal) Army didn't directly fight the Maoists shows their lack of capability and will to take over. He said the Nepalese already know the consequences of an overly powerful King, and that they wouldn't stand for a military government. All of Nepal's four pillars - the Nepalese National Army, the King, the SPA and the Maoists - are weak, according to Jha. This void has NEW DELHI 00007005 002 OF 002 existed in Nepal for a long time, he said, and none of these "pillars" has been strong enough to fill it. -------------- -------------- China and Hydropower: India's High Stakes in Nepal -------------- -------------- ¶5. (C) When asked to outline India's strategic interests in Nepal, Jha replied that Nepal's border with China affects India directly. He noted that both the King and the political parties had "played that up" in the past, using it to their own advantage. Nepal is of immense importance to India, Jha added, noting that Nepal is India's most closely culturally-linked neighbor. "Nepal is more 'Indian' than any of our neighbors," and the Nepalese are keenly aware that they would be unable to cut off its southern border with India in favor of its northern neighbor. ¶6. (C) On the energy front, Jha observed that Nepal has 80,000 megawatts in hydropower to offer India and profit from, but that the projects to unleash that power have never gotten off the ground. "If anyone has a stake in Nepal, it is India," he emphasized. -------------- COMMENT: Where's the Beef? -------------- ¶7. (C) The GOI says it sees Nepal as a "big challenge" for the short-term, but continues to be optimistic about the long-term future of the country. While the Nepal-China border is a concern for India, the government seems confident enough of its ties with Nepal and does not believe the current situation is particularly alarming. Even its concern over Nepalese Maoist ties with Indian Maoists seems muted. India is clearly well-aware of the influence of the international community on the situation in Nepal, but uses its own influence only sparingly. Given that peace in Nepal potentially translates to energy and security for India, and the GOI's own conviction that Nepal's situation is manageable, India will be motivated to press the Nepalese government and the Maoists to continue the peace process, but with a view that this goal is achievable only in the longer term. END COMMENT. PYATT