This record is a partial extract of the original cable. The full text of the original cable is not available.

010759Z Jul 04

C O N F I D E N T I A L SECTION 01 OF 02 KATHMANDU 001231 
 
SIPDIS 
 
STATE FOR SA/INS 
LONDON FOR POL - GURNEY 
 
E.O. 12958: DECL: 06/30/2014 
TAGS: PGOV NP
SUBJECT: NEPAL:  FOUR PARTIES AGREE ON BASIC PRINCIPLES FOR 
COALITION GOVERNMENT 
 
REF: KATHMANDU 1024 
 
Classified By: CDA JANET BOGUE.  REASON:  1.5 (B,D). 
 
¶1.  (SBU)  Summary:  On June 30 three political parties 
joined Prime Minister Sher Bahadur Deuba's Nepali Congress 
(Democratic) in endorsing a statement of objectives for 
Deuba's government.  The parties' hard-won agreement on the 
43-point program opens the door for the formation of a 
coalition government.  The press optimistically reported that 
the composition of the Cabinet may be announced as early as 
July 1.  The alliance offers the possibility of the 
broadest-based government since King Gyanendra dismissed the 
last democratically elected government in May 2002.  Former 
Prime Minister G.P. Koirala's Nepali Congress, meanwhile, 
largely due to the obduracy of its leader, remains out of the 
coalition, out of the Cabinet, and out in the cold.  End 
summary. 
 
 
¶2.  (U)  After nearly a month of intensive wrangling, on June 
30 the Communist Party of Nepal - United Marxist Leninist 
(UML), the National Democratic Party (also known as RPP, its 
Nepali acronym), and the Nepal Sadbhavana Party (Mandal 
faction) joined Prime Minister Sher Bahadur Deuba's Nepali 
Congress (Democratic) in endorsing a statement of common 
objectives for Deuba's government.  The agreement on the 
43-point common minimum program (CMP) opens the door for the 
formation of a four-party coalition government.  According to 
press reports, portfolio assignments to the new Cabinet may 
be announced as early as July 1.  (Comment:  We expect it may 
take somewhat longer.  End comment.)  In addition to the 
premiership, the Nepali Congress (Democratic), according to 
popular speculation, is expected to retain five Cabinet 
slots, while the UML, RPP and Sadbhavana may pick up five, 
three and one respectively.  In addition, two ministerial 
posts may be awarded to non-party technocrats chosen by the 
Palace.  Both Deuba and UML General Secretary Madhav Kumar 
Nepal reportedly agreed to reserve four ministries for former 
Prime Minister G.P. Koirala's Nepali Congress, in the event 
the octagenarian leader--the last hold-out among the major 
mainstream political party leaders--later decides to join the 
government.  According to press and party sources, the Nepali 
Congress (Democratic) and the UML continue to disagree on 
allocation of the powerful ministries of Finance and Home, 
with the UML aggressively laying claim to these key posts, 
and Deuba's party just as energetically resisting. 
 
¶3.  (U)  The common program, while predictably featuring 
commitments to strengthen democracy, "safeguard the 
achievements of the 1990 People's Movement," hold elections 
and resolve the Maoist insurgency through a "progressive 
political consensus" attained from negotiations, also 
contains a surprising number of objectives aimed at improving 
Nepal's socio-economic development.  For example, the CMP 
pledges to "increase gradually" the number of female 
candidates in Parliament and in locally elected bodies, and 
undertakes to transform, through "constitutional methods," 
the National Assembly (the Upper House of Parliament) into a 
body more representative of women, the lower castes, and 
ethnic minorities.  Other noteworthy (if not fully 
fleshed-out) objectives include special assistance programs 
for the least developed, Maoist-affected regions of the 
country; land reform; special employment opportunities for 
lower castes, women and ethnic minorities; improved rural 
community health programs; the establishment of a social 
security program; and property rights for women. 
 
¶4.  (C)  In a June 29 conversation with the DCM, RPP Chairman 
Pashupati SJB Rana says he thinks Deuba already has accepted 
his proposal for a Peace Secretariat to help the government 
pursue negotiations with the Maoists more systematically and 
knowledgeably.  Rana also said that his contacts with the 
Maoists indicate that they may be willing to enter 
negotiations with the Government without initiating a formal 
cease-fire, which is still unpopular with the Royal Nepal 
Army because the Maoists exploited the last one to their 
advantage.  Like some other commentators, Rana believes that 
the next round of negotiations should be unpublicized and 
preferably take place outside Nepal to prevent the kind of 
high-profile ultimata that the Maoists used previously to 
leverage concessions out of Government negotiators.  Rana 
says he believes that India would oppose active mediation by 
any outside government or organization like the UN.  Where an 
outside party may be helpful and acceptable, he suggested, 
would be in providing a foreign venue for peace talks and 
security to both sides. 
 
¶5.  (C)  Comment:  Given the bitterness and contention more 
typical of the domestic political culture, the all-too-rare 
phenomenon of four parliamentary parties agreeing on 
anything--much less a 43-point program to underpin a 
coalition government--is heartening.   In the absence of 
elections, Deuba's continuing efforts to bring the RPP, the 
Sadbhavana, and most important, the UML, into his Cabinet 
seem to offer the best prospects yet for a broader-based, 
more representative government since King Gyanendra dissolved 
the last democratically elected government and appropriated 
executive authority in May 2002.   Substantial hurdles 
remain, however, the most formidable being the thorny 
question of the allocation of key ministries like Home and 
Finance.  Moreover, even the UML's support does not 
necessarily counterbalance the enmity and sustained 
antagonism that the Nepali Congress (Koirala) can be expected 
to level against Deuba.   With three of the five largest 
parties now supporting Deuba's government, former Prime 
Minister G.P.  Koirala's Nepali Congress is the only 
mainstream party without a seat at this multipartisan 
table--and thus a potentially destabilizing factor as the new 
government seeks to establish itself. 
BOGUE