AMBASSADOR MEETS WITH PM KOIRALA

C O N F I D E N T I A L SECTION 01 OF 03 KATHMANDU 000579

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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

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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

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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