AMBASSADOR MEETS WITH PM KOIRALA

C O N F I D E N T I A L SECTION 01 OF 03 KATHMANDU 000579 SIPDIS DEPT FOR SCA/FO, SCA/INS MUMBAI PLEASE PASS TO PDAS EVAN FEIGENBAUM E.O. 12958: DECL: 05/23/2018 TAGS: PGOV KDEM PREL NP SUBJECT: AMBASSADOR MEETS WITH PM KOIRALA Classified By: AMBASSADOR NANCY J. POWELL. FOR REASONS 1.5 (B/D) ¶1. (C) Summary: In a presentation that seemed to defy political or logistical realities, Prime Minister Koirala assured Ambassador on May 23 that all outstanding issues relating to the imminent sitting of the Constituent Assembly and formation of a new Nepali government would be solved through talks either today or tomorrow. When pressed, however, the Prime Minister was unable to enumerate the Nepali Congress Party,s demands, name who would represent the party in the upcoming talks, and when asked about party participation, had to be reminded by the Foreign Secretary that the Maoists would attend. He suggested that the NC, UML, and two largest Madhesi parties had agreed on key negotiating points, including the establishment of a ceremonial president with as yet unspecified powers, and a demand that the threshold to form and bring down a government be changed to a simple majority vote versus the current 2/3 majority requirement. Despite the PM,s assurance, Post has little faith that an agreement will be hammered out prior to the sitting of the new legislature on May 28. Ambassador outlined several key U.S. positions, including the expectation of respect for the results of the April 10 polls, a preference for an all-party unity government to ensure stability and security, an end to violent activities (particularly those perpetrated by Maoist-affiliated organizations),and when discussing the Nepal Army,s increasingly nervous stance as the transition nears, a clear warning that no coup/undemocratic resolution to the current situation would be acceptable to the U.S. End Summary. ¶2. (U) Ambassador and DCM met with Prime Minister G.P. Koirala on May 23, at his request, at the PM residence in Baluwatar. Foreign Secretary Gyan Bahadur Acharya and External Affairs Advisor Aditya Baral also attended. The meeting comes just two days before a previously-scheduled May 25 meeting between the Prime Minister and visiting Deputy Assistant Secretary Evan Feigenbaum. Skewed Reality -------------- ¶3. (C) In the midst of an environment of deepening angst prior to next week,s sitting of the Constituent Assembly, Prime Minister Koirala surprisingly began the meeting by flatly stating that all issues related to the sitting of the Constituent Assembly and the formation of a new Nepali government would be settled through negotiations either today or tomorrow (May 23 or 24). He confirmed that the Nepali Congress had forged a common position with the Communist Party of Nepal, United Marxist Leninist (UML) and the two main Madhesi parties. Saying that he had spoken with Maoist Chairman Pushpa Dahal (Prachanda) by telephone recently, he acknowledged that the CPN-M had been stiff in their negotiating stance to date. (There has been no face-to-face meeting.) The Prime Minister went on to say that if military issues (read: PLA integration/disposition) were solved, agreement on all other issues would quickly drop into place. The Prime Minister voiced concern, however, that the Maoists were gathering PLA and YCL cadres in Kathmandu in advance of Wednesday,s first sitting, claiming that the CPN-M had put the PLA on standby and were capable of creating "mischief" on May 28. ¶4. (C) Asked by Ambassador regarding the points under discussion at the upcoming talks, the Prime Minister turned to the Foreign Secretary for an answer, even on the most basic of the NC,s well-publicized "seven point" demands. Spurred by the Foreign Secretary,s input, the PM indicated that he expected the Maoists to agree on the government-formation threshold of a simple majority. Additionally, he said the establishment of the office of President, to balance the power of a future Prime Minister, was a unified NC/UML/Madhesi parties demand, though he refuted press reports that the proposed Presidency would KATHMANDU 00000579 002 OF 003 retain control of the Nepal Army, vice the PM. Asked who would head the NC delegation in the talks, Koirala again had to turn to the Foreign Secretary and External Affairs Advisor for the answer that his nephew, Sushil, would lead the negotiations with Ram Chandra Poudel, the Minister for Peace and Reconstruction, Minendra Rizal, and Bimalendra Nithi. According to the Prime Minister, Baburam Bhattarai will lead the Maoist side. ¶5. (C) On the monarchy, the Prime Minister upended the usual response to the certainty of the monarchy,s abolition at the CA,s first session. He bewilderingly explained that absent an agreement/resolution on the key issues separating the NC/UML/Madhesi block and the Maoists, particularly on the establishment of a Presidency, the CA could not take steps to abolish the monarchy as agreed in an amendment to the interim constitution due to the power vacuum that would possibly ensue. When Ambassador observed that the King had played no active political or governance role since the 2006 Jana Andolan, Koirala shifted his discussion to the need for an honorable exit, from the Palace for King Gyanendra. He did, however, suggest that Maoist leader Dahal had recently met with extended members of the royal family in the last few days to discuss the monarchy,s end. Asked about what security plans were in place at the Royal Palace and the Prime Minister,s Residence on the day of the assembly,s first meeting, the PM, again prompted by the Foreign Secretary, said vaguely that security would be in place at all key Nepali institutions on May 28. ¶6. (C) Despite having requested the meeting, the Prime Minister appeared to be without a clear agenda. While he made a general inquiry at the outset of the meeting regarding the Ambassador,s recent consultations in Washington, he meandered through the issues above before asking flatly what advice the U.S. had on the situation. Ambassador responded on several key issues, including: --the U.S. expectation that the will of the people would be respected, noting that we recognized that the Maoists had won a plurality of the votes in the CA election, and with it the right to form the next government under its leadership; --the American view that for the sake of stability, security, and the advancement of the peace process/agreement, the formation of an all-party unity government was preferable to all others; --that the U.S. had a great concern over the level of continuing violence in the post-election period, particularly Young Communist League (YCL) perpetrated incidences, and the critical necessity of upholding law and order to end intimidation and retribution; --a key American concern over the role of the military during this sensitive transition period, including observance of civilian control. Some Nepali-led solution on PLA integration would need to be reached, but that above all else, given increased Nepal Army unease at presence, there be no consideration of unilateral military action literally, no coup, in line with repeated assurances given by Chief of Army Staff Katawal; --that the U.S. was closely watching political and coercive violence. Ambassador noted that any future "de-listing" of the CPN-M from the two U.S. terrorism lists on which they appear would only occur pending positive steps from the Maoists, and in any event, would not be done quickly; --that the U.S. expected to continue its assistance program as a donor country in Nepal to the benefit of all Nepalis, particularly highlighting planned assistance to the Constituent Assembly members; --that the U.S. also expected GON attention to the well-being KATHMANDU 00000579 003 OF 003 and safety of Bhutanese refugees, in light of recent attacks in the Damak-area Bhutanese camps, and to the human rights of Tibetans in Nepal. Comment -------------- ¶7. (C) Meetings with the Prime Minister are typically meandering and subject to sharp turns in topic, conversation and sometimes, logic. Today,s however, verged more on the surreal. The PM,s suggestion that a solution to the truly intractable problems of PLA integration and YCL excesses would be reached in less than 24 hours would be more credible had he shown any awareness of the details, composition, or agenda of the talks. Today,s reassurances draw comparison to several pre-election interactions with Koirala in which a sunny outlook and a simple solution one day bumped up against the reality of complicated and sensitive negotiations the next. However, there are some indications that on the threshold requirement to form a government, the Maoists and NC/UML/Madhesi party block may be close to an agreement which would see the level drop to a simple majority. ¶8. (C) Post is concerned over potential elements of the Prime Minister,s surreal grasp of the current dyanamics, his negotiating stance and what appears to be a total lack of preparations for any security threats arising from the May 28 sitting. Expectations are very high that Wednesday will see the end of Nepal,s 250-year-old Shah dynasty. If the PM and affiliated parties hold the abolition of the monarchy hostage to a deal to force establishment of a Presidency, assembled YCL cadres, confirmed by several sources to be massing in Kathmandu to celebrate the republican declaration, could quickly turn to disruptive and violent action. Even in lesser circumstances, where the monarchy may be swept away but with King Gyanendra reluctant to leave the Royal Palace, a confrontation between YCL and security forces also poses a danger. How the Nepal Army reacts in either of those circumstances would be critical, hence our strong warning today to the Prime Minister to follow democratic norms and practices. ¶9. Post Core EAC will sit on Friday, May 23 to discuss the upcoming transition and potential security issues and will report septel. The full EAC will meet on May 27. POWELL