NEPAL: MAOIST RESIGNATIONS STILL UP IN THE AIR

C O N F I D E N T I A L SECTION 01 OF 02 KATHMANDU 001755 SIPDIS SIPDIS E.O. 12958: DECL: 09/19/2017 TAGS: PGOV PTER MARR KDEM NP SUBJECT: NEPAL: MAOIST RESIGNATIONS STILL UP IN THE AIR REF: A. KATHMANDU 1750 ¶B. KATHMANDU 1648 Classified By: Deputy Chief of Mission Randy Bell. Reasons 1.4 (b/d) Summary -------------- ¶1. (C) One day after the September 18 resignations of the four remaining Maoist ministers in Nepal's Interim Government, it is still not clear if the Maoists will leave the cabinet or not. Prime Minister Koirala's nephew and close adviser Dr. Shekhar Koirala told Emboff September 19 that an eight-party meeting later that afternoon might reach an agreement that would keep the Maoists in. He thought it would probably involve a deal for the Interim Parliament to adopt a resolution agreeing that Nepal would become a republic at the first meeting of the Constituent Assembly. Dr. Koirala discussed other issues prompting Maoist dissatisfaction, including allowances for Maoist combatants. According to one Nepali Congress participant in the meeting, it ended inconclusively not long after it started. Maoists Not Yet Out -------------- ¶2. (C) The September 18 resignation of four Maoist ministers -- Minister of Information Krishna Mahara, Minister of Local Development Dev Gurung. Minister of Planning Hisila Yami and Minister of Women and Children -- is still pending. On September 19, the Prime Minister's nephew and close adviser and key negotiator with the Maoists Dr. Shekhar Koirala confirmed to Emboff that PM Koirala was delaying accepting the resignations for now. Dr. Koirala said that the Prime Minister hoped to persuade the Maoists to reconsider. To that end, Seven-Party Alliance leaders and the Maoists were planning to meet starting at 2:30 p.m. at the Prime Minister's residence in Baluwatar. He noted that the day before senior Maoist leader Dr. Baburam Bhattarai had taken a hard line insisting that the Interim Government had to declare a republic immediately and move King Gyanendra out of the Narayaniti Palace. Nepali Congress (NC) Vice President Sushil Koirala, filling in for the Prime Minister, who was not well enough to stay for very long, rejected the demands and the talks broke down. Deal On a Republic -------------- ¶3. (C) Dr. Koirala thought a deal could be reached for the Interim Parliament to adopt a resolution committing the Seven-Party Alliance and the Maoists to vote in favor of a republic at the first session of the Constituent Assembly. He said that this was acceptable to the Prime Minister and had the advantage that it did not run afoul of the Interim Constitution. The PM's nephew stated that he did not think the Maoist demand for a purely proportional system for the Constituent Assembly election was a deal breaker. The Prime Minister had told Maoist chief Pushpa Kamal Dahal ("Prachanda") and Dr. Bhattarai on September 15 that he, Koirala, agreed that an arrangement should be reached to ensure that the parties' two leaders were elected. Dr. Koirala added, however, that the PM had not specified how many "safe seats" would be set aside. Other Maoist Issues -------------- ¶4. (C) The Prime Minister's nephew told Emboff that another major issue for the Maoists was the government's failure to pay the agreed compensation to those Maoists in the cantonments whom the UN Mission in Nepal had found not qualified as combatants. He attributed this to a hard line taken by Minister of Finance Ram Sharan Mahat and Minister of Reconstruction and Stabilization Ram Chandra Poudel. Dr. Koirala argued that all the open issues should be put on the table. This included the Seven-Party Alliance demand (and Maoist agreement) to return real property seized by the KATHMANDU 00001755 002 OF 002 Maoists during the insurgency, the Maoist agreement (not yet fulfilled) to account for monies provided by the Nepali Government and the Maoist insistence on some compensation for Maoist supporters who had suffered at the hands of the security forces during the insurgency. (Note: Dr. Koirala remarked that the Prime Minister and UNMIN were keen to ensure that those who were discharged received some form of vocational training so they did not resort to violence or crime upon release. He said the Maoists supported the idea also; the difficulty was in implementation. End Note.) Comment -------------- ¶5. (C) Dr. Koirala seemed optimistic that a deal could be reached the afternoon of September 19 to keep the Maoists in the Interim Government. He agreed with Emboff that it would not be a disaster even if the Maoist ministers' resignation took effect. The PM's nephew said the top Maoist leadership had repeatedly reassured PM Koirala that they had no intention to withdraw from the Interim Parliament or the peace process -- even if they left the cabinet. As it turned out, according to a Nepali Congress leader, Arjun Narsingh K.C., who was present for the afternoon talks, senior leaders, including Pushpa Dahal, met formally as the Eight-Party Alliance for approximately 10 minutes before concluding the talks. Post is still awaiting word on next steps, but the most likely outcome is that more talks will be held tomorrow. POWELL