PM'S ADVISOR SAYS INTERIM GOVERNMENT LIKELY IN 5-6

C O N F I D E N T I A L SECTION 01 OF 03 KATHMANDU 000511

SIPDIS

SIPDIS

E.O. 12958: DECL: 03/09/2016
TAGS: PREL PGOV PTER NP
SUBJECT: PM'S ADVISOR SAYS INTERIM GOVERNMENT LIKELY IN 5-6
DAYS

REF: KATHMANDU 0406

Classified By: Ambassador James F. Moriarty. Reasons 1.4 (b/d).

Summary
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1. (C) Dr. Suresh Chalise, Prime Minister (PM) Koirala's
Foreign Policy Advisor, told the DCM March 8 that Maoists
were likely to join an interim government in the next five to
six days. Chalise said the Prime Minister, leaders of the
Nepali Congress (NC),and Maoist leaders had reached an
understanding at a meeting March 7. Chalise expected the
eight parties to endorse the agreement in the coming days.
The Foreign Policy Advisor reported final agreement for
Maoist entry included: 1) return of seized property, 2)
agreement on weapons for VIP security; and 3) a crackdown on
illegal weapons. The Maoists, in turn, wanted assurances of
appropriate positions in an interim cabinet notably the
communications portfolio. Chalise downplayed the recent
violence in the Terai, saying, the situation would "work
itself out." He was confident the Government of Nepal (GON)
had reached a sufficient understanding with the Madhesis to
move forward. The PM's advisor said Koirala planned to use
the upcoming cabinet reshuffle to move current Home Minister
Krishna Prasad Sitaula.

Maoists Will Enter Government in 5-6 Days
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2. (C) Dr. Suresh Chalise, PM Koirala's Foreign Policy
Advisor, told the DCM March 8 that the PM, senior members of
the PM's Nepali Congress (NC) Party, and Maoist leadership
had agreed on conditions needed for Maoist entry into an
interim government at a meeting at the PM's Residence on
March 7. Chalise said he expected the understanding to be
endorsed by the eight parties over the next days. Chalise
reported that conditions for Maoist entry included; 1) return
of seized property, 2) agreement on weapons for VIP security;
and 3) a crackdown on illegal weapons. The Maoists, in turn,
wanted assurances of appropriate positions in an interim
cabinet. Chalise said the Maoists were rapidly following up
on many of these points including issuing a statement to
their cadre to return seized property. Chalise estimated
five or six days until the formation of an interim
government.

Agreement Reached on VIP Security
--------------


3. (C) Chalise told the DCM that the debate over Maoist
weapons for personal security was no longer a sticking point
in the negotiations. GON security personnel would provide
perimeter security, while the Maoists would handle internal
security with their own bodyguards. However, all the Maoist
weapons used for personal security would have to be
registered with the UN Mission in Nepal (UNMIN) or the
Ministry of Home Affairs. GON security forces would
supervise movement of Maoist leaders, while Maoist bodyguards
would provide physical protection.

Maoists Want Communication; NC Wants Other Top Slots
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4. (C) Regarding Maoist positions in an interim cabinet,
Chalise reported the Maoists were pushing hard for the
Ministry of Information and Communication (currently held by
the NC). Chalise also said the PM had raised the NC's
interest in nominating the Deputy Prime Minister. Chalise
said the PM wanted a clear order of succession that had the
NC first and the Maoists farther down the line (third or
fourth). Chalise said the Maoists had not pushed back on this
point. (Comment: PM Koirala's nephew, Dr. Shekher Koirala,
highlighted to Emboff March 2 the Maoist interest in the
Information and Communication, Physical Planning and Works,
General Administration, and Local Development and Land Reform
(or Agriculture) Ministries. End Comment.)

Terai Not a Top GON Priority

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5. (C) The DCM stressed to Chalise that the GON needed a
comprehensive approach to addressing the unrest in Nepal's
southern Terai region as opposed to remedying the concerns of
each marginalized group one-by-one. Chalise agreed and said
that the PM was outlining a holistic approach. However,
Chalise downplayed the recent violence in the Terai, saying
he thought the situation would "work itself out" intimating
that the issue was not at the top of the GON's priority list.
Chalise reported that the GON had reached an understanding
with MPRF during a recent meeting with MPRF leadership which
had included Minister of Finance Mahat. While the GON could
not openly side with the MPRF, its clash with the Maoists was
in the interest of democratic forces.

Madhesi Demands: GON Accepts Two Out of Three
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6. (C) Chalise told the DCM that of the Madhesis' three
demands: 1) the resignation of the Home Minister, 2) a
commission of inquiry to investigate the recent violence in
the Terai and to provide compensation to victims, and 3) the
declaration of fallen Madhesis as Martyrs; the first two were
acceptable to the GON. On the first point, Chalise said the
PM planned to use the upcoming cabinet reshuffle to move
current Home Minister Sitaula (Note: In a separate meeting
with the Ambassador and DCM March 8, peace facilitator Hannes
Siebert indicated that Sitaula would likely be shifted to the
planned Peace Ministry. End Note.) On the second point,
Chalise reported that an independent commission of inquiry
into the January to February riots in the Terai would be
formed and the GON planned to pay compensation. However, on
the third point, Chalise said the GON was reluctant to
recognize Madhesi rioters as martyrs because the rioters had
brutally murdered a police officer in Biratnagar. Chalise
was confident the GON had reached a sufficient
"understanding" with the Madhesis to move forward.

Second Phase of Arms Management Will Be Dicey
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7. (C) Chalise expressed concern regarding the planned
second phase of arms management (following the counting of
Maoist arms and combatants) which would include vetting the
over 30,000 combatants in the cantonment sites to determine
their eligibility to remain. Chalise said that even the
Maoists themselves had earlier suggested that PLA had only
5,000 to 7,000 combatants. Chalise worried about the hordes
of Maoist militia the UN would release from the camps into
the countryside during the vetting process, with grave
implications for the already deteriorating law and order
situation. Chalise said the Maoists regarded the arms
management process as complete, and that they were therefore
entitled to enter into an interim government; the second
phase in their view had no bearing.

Law and Order After Entry into Government
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8. (C) The PM's advisor reiterated earlier statements that
the GON would enforce law and order and seize illegal weapons
from Maoist militia after the Maoist entered an interim
government. (Note: The GON's position in late 2006 was that
they would enforce law and order once Maoist combatants were
in the camps. End Note.) Chalise said the government
recognized how critical the re-establishment of security
would be, particularly in the lead-up to elections. Chalise
said the a new Home Minister would have the potentially
"historic task" to promote law and order across the country.


GON and Maoists Still Sticking to June Election Deadline
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9. (C) Chalise clarified that the interim government had to
be formed because only it could declare a date for the
Constituent Assembly (CA) election. Chalise said the GON
remained eager to have elections by the June deadline laid

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out in the Comprehensive Peace Agreement (CPA) to minimize
the potential for pre-election mischief. The GON had avoided
any public mention of possible postponement, the PM's advisor
said, because the June election deadline figured so
prominently in the commitments the Seven-Party Alliance had
made in the Interim Constitution and CPA. The Maoists,
Chalise reported, were also interested in a June election,
but were sending mixed signals publicly on the potential
date. When pressed by the DCM on the technical challenges to
pulling off an election by June, Chalise said it would be
possible under the tight timetable.

Camp Conditions Meet Nepali Standard
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10. (C) When the DCM inquired about the conditions in the
PLA cantonment sites, Chalise said that they were poor if you
held them to western standards. He added, however, that
Nepal was a third world country and many Nepalis lived in
similar circumstances. The Foreign Policy Advisor did not
comment on a relevant personnel reshuffle in the Peace
Secretariat which peace facilitator Siebert raised March 8.

SIPDIS
According to Siebert, the much criticized Joint Secretary for
Camp Management would be transferred to the Election
Commission. His successor, Siebert said, appears to be more
inclined to focus on the UN's long-standing proposal to
create a trilateral UN-GON-Maoist committee, similar to the
Joint Monitoring Coordinating Committee (JMCC) on arms
management, to address camp management issues.

Comment
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11. (C) Chalise seemed relaxed and confident, conveying the
impression that Maoist entry into an interim government was a
done deal. He expected the Maoists to fulfill outstanding
conditions for their entry over the next days, but insisted
that their actions would have to be tested. He also
expressed GON satisfaction with progress on arms management.
In a departure from previous meetings, he did not mention his
perennial bugbears: the Palace and the Nepal Army. Post is
less sanguine than the PM's Foreign Policy Advisor about the
Terai; letting the situation continue to boil as a way to
weaken the Maoist position instead of finding a comprehensive
solution to address the grievances of Nepal's marginalized
groups is a dangerous game. We will continue to push the GON
to take full advantage of the arms management process to
minimize the Maoist threat. We will also push the GON to
re-establish law and order and to take a comprehensive and
inclusive approach to Nepal's electoral and constitutional
challenges.
MORIARTY