PRIME MINISTER UNEASY ABOUT FORMING INTERIM

C O N F I D E N T I A L SECTION 01 OF 02 KATHMANDU 000668

SIPDIS

SIPDIS

E.O. 12958: DECL: 03/30/2017
TAGS: PGOV PREL PTER IN NP
SUBJECT: PRIME MINISTER UNEASY ABOUT FORMING INTERIM
GOVERNMENT WITH MAOISTS


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

Summary
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1. (C) Prime Minister Koirala told the Ambassador March 30
that he faced tremendous pressure to form an interim
government with the Maoists before he departed April 1 for
New Delhi to attend the South Asian Association of Regional
Cooperation (SAARC) Summit. Koirala said he was being
pressed by members of the Seven-Party Alliance (SPA),the
Maoists, Nepali civil society and the Government of India
(GOI) and indicated he was having difficulty resisting. The
Prime Minister conceded he had not yet reached agreement with
his coalition partners on which party would obtain the
Defense, Home and Finance Ministries or a Deputy Prime
Ministership. He admitted he was baffled why the GOI was
pushing him so hard. Koirala expressed unease about bringing
the Maoists into the government. He agreed with the
Ambassador that their behavior had not changed. If that
pattern continued, the PM stated, Constituent Assembly
elections would not be free and fair. The Ambassador noted
the new Home Minister would face great challenges in
enforcing the rule of law after nearly a year of Maoist
impunity. Koirala agreed the law and order situation was
dire, including for business, and promised the SPA and the
Maoists would issue a statement agreeing to enforce the law
when an interim government was formed.

Prime Minister Pressed To Form Interim Government
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2. (C) On March 30, Prime Minister Girija Prasad Koirala
informed the Ambassador that he was facing tremendous
pressure from all sides to bring the Maoists into an interim
government within two days. He said he was scheduled to
leave Kathmandu for New Delhi April 1 in preparation for the
April 4-5 SAARC Summit. Members of the governing SPA,
particularly the Communist Party of Nepal - United Marxist
Leninist (UML),were pressing him to act now. The same was
true of the Maoists, civil society and the GOI. Koirala said
he had resisted pressure to form the new government for a
long time, but the tension was becoming more than he could
bear. His difficulties, he admitted, were compounded by his
poor health. Koirala complained, and his Foreign Policy
Advisor, Suresh Chalise, who was present, seconded that he
was once again experiencing serious respiratory problems.

Ministries, Deputy Prime Ministerships Still In Play
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3. (C) The Prime Minister said that, despite long rounds of
talks with the principal parties, he had not yet reached
agreement on the allocation of certain key ministries. In
the talks, he had insisted that his Nepali Congress Party
(NC) retain its hold on the Defense, Home and Finance
Ministries. Beyond those cabinet seats, he was willing to
accept nearly any configuration that the other parties were
able to agree on. But UML General Secretary M.K. Nepal was
balking. Koirala said M.K. had demanded the Home Ministry
for the UML. The Prime Minister wondered aloud why the UML
General Secretary was being so difficult. Was he trying to
make common cause with the Maoists? The Ambassador responded
that he did not think so. M.K. Nepal was playing politics.
The Ambassador added that during his meeting the day before
with Nepal (septel),he had pushed the UML chief for
assurances any UML Home Minister would be prepared to enforce
the law. Nepal had equivocated. Koirala reported that the
Maoists had at first demanded they be given the Senior Deputy
Prime Ministership since the other major parties held the
other top posts. They had since backed down and accepted
that the senior slot would be from NC. The Prime Minister
did not specify who from the NC would get that job.

Confused by India
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4. (C) Prime Minister Koirala admitted that he was baffled by
the GOI pressure. He did not understand why the Indians --

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he mentioned recent phone calls from Foreign Secretary Menon
and Indian Ambassador Mukherjee -- were now pressing him so
hard to immediately form an interim government with the
Maoists. The Ambassador conceded that he too was confused.
He gathered that New Delhi had become particularly concerned
about the situation in the Terai after the Gaur massacre
March 21. The Ambassador speculated that there might also be
domestic Indian political reasons for what appeared to be a
major shift in GOI policy, but he did not know what those
reasons could be, and noted he had sought assistance from
Embassy New Delhi. Koirala commented somewhat bitterly that
Indians had claimed for a long time that the Terai was
"theirs"; now it was time for them to use their influence
there to fix the problem. The Prime Minister and Chalise
stressed that the Government of Nepal was prepared to give
the Madhesis the representation that was their due.

Uneasy About Maoist Entry Into Government
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5. (C) The PM openly admitted that he was uneasy about
allowing the Maoists to enter an interim government. He
affirmed that he shared the Ambassador's opinion that Maoist
behavior had not changed. They were continuing their pattern
of extortion and violence. The Ambassador pointed out that
business was also suffering terribly from Maoist violence,
citing the case of Nepal's Tibetan rug industry. The Prime
Minister agreed and worried what would happen to the
country's economy with many joint ventures closing down due
to inordinate Maoist demands. Koirala stated without
hesitation there could be no free and fair Constituent
Assembly election if such Maoist actions continued. He added
that it would be impossible to hold acceptable elections by
mid-June, despite the desire of the GOI.

New Home Minister Faces Serious Challenges
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6. (C) The Ambassador pointed out that the new Home Minister,
whoever it was, would encounter grave difficulties in
enforcing law and order. After 11 months without enforcing
the law, particularly in the case of Maoist crimes, the
Nepali Police were completely demoralized. Even if the new
minister were committed to changing that policy and ending
Maoist impunity, he or she would have to overcome profound
skepticism of his or her ability to implement that policy.
This problem would be particularly acute, the Ambassador
stressed, if the Maoists were allowed to come into the
government without a clear change in their actions. The
Prime Minister did not disagree. He conceded that the task
would be a gargantuan one. He was already doing what he
could, he said, to boost police morale. The PM noted he had
reached out to senior police -- without involving Home
Minister Sitaula. He also stated that he would insist that
all the parties in the new government issue a statement that
the rule of law would be enforced and that anyone carrying an
illegal weapon would be arrested.

Comment
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7. (C) The trials and tribulations Prime Minister Koirala is
facing would take a toll on a young and healthy leader. He
is neither. We left the meeting unsure what the PM would
ultimately decide to do: form the government before departing
for the SAARC Summit or, as we suspected he prefers, wait
until after he returned. Subsequent comments from other
Embassy contacts about whether an interim government with the
Maoists will be formed by April 1 have been contradictory.
(Some say it could happen as soon as March 31; others claim
the talks are deadlocked.) What is apparent is that whoever
inherits Minister Sitaula's position as Home Minister -- and
Koirala's clear implication was he intended to replace
Sitaula -- will have a job no one will envy. He or she will
face the ire of the public or the ire of the Maoists, but
will not be able to please both.
MORIARTY