NEPAL: LITTLE PROGRESS IN NEGOTIATIONS TO FORM

C O N F I D E N T I A L SECTION 01 OF 02 KATHMANDU 000895

SIPDIS

E.O. 12958: DECL: 08/08/2018
TAGS: PREL PGOV PHUM KDEM NP
SUBJECT: NEPAL: LITTLE PROGRESS IN NEGOTIATIONS TO FORM
GOVERNMENT

REF: KATHMANDU 861

Classified By: Ambassador Nancy J. Powell. Reasons 1.4 (b/d).

Summary
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1. (C) Maoist-led negotiations to form a new government have
been unable to overcome the daunting set of problems - a
complete lack of trust among the parties, splits within each
of the major parties, and personality conflicts. Competing
negotiations by Prime Minister Koirala to form a 'democratic
front' government excluding the Maoists have not found much
support from other parties yet, and are not supported by most
of his party's central committee. At close of business a new
round of negotiations was underway, but unlikely to be
concluded by President Yadav's deadline of the evening of
August 8.

Inauspicious Conditions for Government Formation
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2. (SBU) To date Maoist-led negotiations to form a new
government, which got underway in earnest July 30 (reftel),
have been unable to overcome the daunting set of problems - a
complete lack of trust among the parties, splits within each
of the major parties, and personality conflicts, which have
plagued the negotiations. The Maoists presentation of three
preconditions (an end to the Nepali Congress (NC)-Communist
Party of Nepal-United Marxist Leninist (UML)-Madhesi People's
Rights Forum (MPRF) alliance, acceptance of the Maoist
program as the basis for the common minimum program (CMP),
and agreement the government would not be brought down for
the two-year term of the Constituent Assembly) were
explicitly rejected by other parties. Rather than reaching
out by including some points from other parties or
emphasizing areas of agreement, the Maoists' draft common
minimum program did draw almost exclusively from their
program. Discussions on the distribution of ministries
across parties also faced difficulties with the Maoists'
claim to all major portfolios (Prime Minister, Defense, Home,
Finance) contested by both NC and UML.

Nepali Congress Conducting Competing Negotiations
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3. (C) Since returning from the SAARC Summit on the evening
of August 4, caretaker Prime Minister Koirala has
demonstrated more initiative and activity than he has in
quite a while by holding a series of meetings seeking support
to form a 'democratic front' government excluding the
Maoists. While a few leaders went to the Prime Minister's
residence to hear this appeal, Koirala exhibited an unusual
willingness to meet other leaders at their residences.
Despite the lack of enthusiasm for Maoist leaders and
policies, Koirala has been unable to find much support -so
far- for his maintaining the Prime Ministership in a new
NC-led government.

But Not All are Behind Prime Minister
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4. (C) Koirala's willingness to exclude the Maoists from
government demonstrates a worrying focus on his personal
power and a lack of concern for the peace process. On August
7 NC Central Committee member and party spokesman Arjun
Narsingh KC told Poloff that the overwhelming majority of the
NC Central Committee favored letting the Maoists lead the new
government, either because they recognized the need for
Maoist support in drafting the constitution and continuing
the peace process, or because they thought the Maoists would
then be exposed as failures and autocrats. KC did not
support Koirala's attempt to lead the new government and
thought "it would have been one more in a long line of
mistakes made by the party in the last two years."


KATHMANDU 00000895 002 OF 002


Way Forward Unclear
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5. (C) The four-party meeting (Maoist, NC, UML, Forum)
scheduled for 10 a.m. local time August 8 was delayed due to
NC conducting internal discussions until early afternoon.
Even if at this meeting NC were to announce a willingness to
support a Maoist-led government of consensus, it would be
very difficult for the parties to agree on a package deal of
confidence-building measures, power sharing, and common
minimum program by the President's self-imposed deadline of
the evening of August 8. While some Maoist leaders have
indicated the party should attempt to lead a
majority-minority government if a broader government of
national consensus cannot be formed, others support Maoists
leading the opposition. The UML has been resisting joining a
Maoist-led government without the NC, but might be convinced
if the NC is seen as too intransigent. Madhesi Forum leaders
have been doing little to prepare their supporters for
possible support for a consensus government with three
parties that have all rejected the Forum's key demand of 'One
Madhes, One Province'.

Comment
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6. (C) As the second deadline set by President Yadav is about
to expire, the political parties have made little headway in
forming a government of national consensus. Internal
divisions within the Maoists and NC are complicating
negotiations, but the UML also has one faction more open to
working with the Maoists and one more committed to the
alliance with NC. Whether the Maoists will maintain their
claim on all major cabinet positions as their rightful spoils
as the largest party, or are willing to let other parties
fill one or more of these posts is unclear. There is no
legal reason why the president could not extend the deadline
again. A less likely alternative would be for President
Yadav to call upon the Maoists to form a majority-minority
government, or for him to call on NC to take the lead in
negotiations to form a government.
POWELL