FOREIGN MINISTER VALUES CONTINUED U.S. ENGAGEMENT

C O N F I D E N T I A L SECTION 01 OF 02 KATHMANDU 000549

SENSITIVE
SIPDIS

E.O. 12958: DECL: 06/25/2019
TAGS: PREL PGOV PTER EAID ETRD KDEM NP
SUBJECT: FOREIGN MINISTER VALUES CONTINUED U.S. ENGAGEMENT
IN NEPAL

REF: A. KATHMANDU 535

B. KATHMANDU 523

C. KATHMANDU 528

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

Summary
--------------


1. (C) On June 12, Foreign Minister Sujata Koirala (Nepali
Congress) acknowledged to Assistant Secretary Robert Blake
that the Maoists were unlikely to join the current
government. However, she was optimistic that at least a few
of the Maoists would participate in a High Level Peace
Committee. Koirala confirmed she expected the Nepali
Government to request another extension of the UN Mission in
Nepal's mandate. She was pessimistic that a new constitution
would be drafted by the May 2010 deadline, and thought
another year would be necessary. The Foreign Minister
thanked the U.S. for its continued assistance to Nepal and
inquired about the possibility of Peace Corps returning.
Both Koirala and Foreign Secretary Gyan Chandra Acharya, with
whom A/S Blake also met separately, appealed for improved
duty-free access for Nepali goods, and for more investment
from the U.S. Assistant Secretary Blake urged progress on
the peace process and affirmed that U.S. support for Nepal
would continue.

Maoist Participation in Coalition Unlikely
--------------


2. (C) Foreign Minister Sujata Koirala admitted to visiting
Assistant Secretary of State for South and Central Asia
Robert Blake on June 12 that few Maoists were interested in
joining the current Communist Party of Nepal - United Marxist
Leninist (UML)-led government. She thought, however, that
some Maoists might be prepared to participate in a High-Level
Peace Committee, if it were stood up. (Note: This committee
is mandated by the 2006 Comprehensive Peace Accord, but does
not yet exist.) Koirala, who is the only child of Nepali
Congress President and former Prime Minister G.P. Koirala,
noted that it would take time to democratize the Maoists, but
the NC and the government have no option but to be patient.
A/S Blake agreed about the importance of keeping the Maoists
in the peace process and emphasized the importance of that
process moving forward under the new government.

UNMIN Mandate Renewal
--------------


3. (C) Koirala confirmed she expected the Government of Nepal
(GON) to request another extension of the UN Mission in
Nepal's (UNMIN's) mandate. She said she would meet June 13
to discuss possible duties and timelines with Tamrat Samuel,
former Deputy Special Representative at UNMIN and current
Director of the Asia and Pacific Division at the UN's
Department of Political Affairs. (Samuel indicated in a June
13 meeting with A/S Blake that the GON was supportive. See
Ref A). The Foreign Minister stated that the GON would work
with the Technical Committee on the Supervision,
Rehabilitation, and Integration of Maoist Combatants and
UNMIN to address specific integration and rehabilitation
issues. Post has reported Koirala's comments on the
extension for the Office of the High Commissioner for Human
Rights and on refugee issues in Refs B and C.

Some Delay in Constitution Drafting Likely
--------------


4. (C) Due to the complexity of state restructuring,
heightened expectations of varied ethnic groups, and weakness
of the government, Koirala was pessimistic that a new
constitution would be drafted by the May 2010 deadline. She
was hopeful, however, that with a one-year extension it could
be done. (Comment: The Foreign Minister spoke as if the

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Interim Constitution permits a one-year extension, but the
extension is limited to six months -- if a national emergency
prevents the Constituent Assembly from drafting the
constitution within the two-year time frame.)

Thank You for U.S. Support
--------------


5. (SBU) Foreign Minister Koirala opened the meeting with A/S
Blake by thanking him for past U.S. support to Nepal, and
requesting continued support and assistance as Nepal
continued to face wide-ranging political and economic
challenges. In response to her inquiry about the possibility
of restarting the Peace Corps, A/S Blake noted it was under
consideration, but that security issues are still a concern.
Koirala and Foreign Secretary Gyan Chandra Acharya expressed
their appreciation for U.S. Government efforts to support
constitution drafting, and singled out the National
Democratic Institute's Women's Leadership Academy for special
thanks. Minister Koirala issued an invitation to Secretary
Clinton to visit Nepal. In their separate meeting, Foreign
Secretary Acharya said he did not know whether Minister
Koirala intended to proceed with Sukhdev Shah's nomination as
Ambassador-designate to the United States. Blake affirmed
that U.S. support to Nepal would continue.

Trade/Economic Concerns
--------------


6. (SBU) Koirala and the Foreign Secretary requested support
for improving duty-free access for Nepali goods to the United
States, especially garments and carpets. Noting that Nepal's
trade with the U.S. had decreased significantly more than
that of other least developed countries, both noted that an
elimination of tariffs would improve Nepal's competitive
position. A/S Blake noted the difficulty of passing a
trade-preference bill during a recession. Acharya pointed
out that socially inclusive economic development was critical
to a sustainable peace. He appealed for more U.S.
investment, particularly in the hydropower sector.

Comment
--------------


7. (C) When she met with Assistant Secretary Blake on June
12, Foreign Minister Koirala had been in office for a little
more than a week, and it was evident that she was still
learning the issues. There continue to be tensions within
the Nepali Congress over her appointment by her father to
head the NC's ministerial delegation in the UML-led
government. According to Embassy sources, those concerns
also factored in to Ram Chandra Poudel's surprising
second-round victory over the NC's deputy leader and former
Prime Minister Sher Bahadur Deuba in the NC's June 20
parliamentary leadership election. NC Members of Parliament
are tired of being dictated to by G.P. Koirala and resented
Deuba's endorsement of Sujata's appointment as Foreign
Minister. The new Foreign Minister is no stranger to
controversy, to post or to the U.S. Government more broadly.
We expect she will continue her father's and party's
generally pro-U.S. positions. How long she and this
coalition will remain in office is a completely separate
question.


8. (U) Assistant Secretary Blake cleared this message.
POWELL