VZCZCXRO3947
PP RUEHCI
DE RUEHKT #0761/01 1031155
ZNY CCCCC ZZH
P 131155Z APR 07
FM AMEMBASSY KATHMANDU
TO RUEHC/SECSTATE WASHDC PRIORITY 5591
INFO RUEHLO/AMEMBASSY LONDON PRIORITY 5242
RUEHKA/AMEMBASSY DHAKA PRIORITY 1130
RUEHLM/AMEMBASSY COLOMBO PRIORITY 5919
RUEHBJ/AMEMBASSY BEIJING PRIORITY 5619
RUEHIL/AMEMBASSY ISLAMABAD PRIORITY 3938
RUEHNE/AMEMBASSY NEW DELHI PRIORITY 1301
RUEHOT/AMEMBASSY OTTAWA PRIORITY 0196
RUEHCP/AMEMBASSY COPENHAGEN PRIORITY 0339
RUEHBY/AMEMBASSY CANBERRA PRIORITY 0374
RUEHCI/AMCONSUL KOLKATA PRIORITY 3369
RUEHBS/USEU BRUSSELS PRIORITY
RHMFISS/CDR USPACOM HONOLULU HI PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RHEFDIA/DIA WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEKJCS/SECDEF WASHDC PRIORITY
RUEHGV/USMISSION GENEVA PRIORITY 1605
RUCNDT/USMISSION USUN NEW YORK PRIORITY 2606

C O N F I D E N T I A L SECTION 01 OF 04 KATHMANDU 000761 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 04/13/2017 
TAGS: PREL PGOV PTER PHUM PREF MASS ETRD IN BT NP
SUBJECT: PRIME MINISTER SAYS ELECTION DELAY LIKELY, 
REAFFIRMS REFUGEE RESETTLEMENT 
 
REF: NEW DELHI 1622 
 
Classified By: Ambassador James F. Moriarty for reasons 1.4(b/d). 
 
Summary 
-------- 
 
¶1. (C) Prime Minister Koirala told the Ambassador April 13 
that an election delay was likely.  The Ambassador 
acknowledged that free and fair elections now would be 
difficult, noting that security in the country remained poor 
and marginalized ethnic groups continued to feel excluded 
from the political process.  The PM believed that the Nepal 
Police were not effectively enforcing the law because they 
were ill-equipped.  He had asked India to provide them with 
10,000 weapons.  Koirala also hoped the U.S. might provide 
rifles to Nepali peacekeepers in Haiti to allow an equivalent 
transfer of guns from the army to the police.  The Ambassador 
opined that the police suffered less from poor equipment and 
more from a lack of confidence in their leadership. 
Moreover, importing weapons would violate the Comprehensive 
Peace Agreement.  The PM said he had approved the King's New 
Year speech, which the Ambassador feared the Maoists would 
use as an excuse to take to the streets, oust the King, and 
gut the Nepal Army.  Although Koirala stressed he would 
continue to seek repatriation of the Bhutanese refugees to 
Bhutan, he agreed that resettlement could proceed 
simultaneously.  The Ambassador noted that U.S. buyers of 
Nepali carpets were pulling out of Nepal due to Maoist 
interference in the carpet industry. 
 
Election Delay Likely 
--------------------- 
 
¶2. (C) Prime Minister Girija Prasad Koirala told the 
Ambassador April 13 that the Chief Election Commissioner had 
sent him a letter stating that a Constituent Assembly 
election in June would not be possible.  (Note: Before the PM 
entered the room, his foreign policy advisor Dr. Suresh 
Chalise said that an election delay was likely.  End Note.) 
The Ambassador asked whether elections might occur before the 
Dasain festival.  The PM worried that the monsoon rains would 
make communication and campaigning difficult.  The Ambassador 
pointed out that Dasain this year would occur later than 
usual -- in mid-October (roughly 4-5 weeks after the end of 
the monsoon) -- and suggested that a long election delay 
could derail the peace process.  The PM acknowledged that he 
was also concerned about a long delay and claimed that he was 
the only leader who really wanted elections to happen soon -- 
in his case, because of his fragile health.  Chalise stated 
that not only the Election Commission (EC), but also the UN, 
believed an election delay was necessary.  Both the EC and UN 
had cited technical and security obstacles to a free and fair 
election, Chalise added. 
 
Security Remains Poor 
--------------------- 
 
¶3. (C)  The Ambassador acknowledged that free and fair 
elections now would be difficult since security in the 
countryside remained poor and marginalized ethnic groups 
continued to feel excluded from the political process.  A 
U.S. NGO (National Democratic Institute) had recently 
concluded that political party activists could not work 
freely in 80 percent of Nepal's districts, due to both Maoist 
threats and instability in the Terai.  Moreover, the Maoists 
had not turned in additional weapons since joining the 
Interim Government, the Ambassador added.  The PM said that, 
during his trip to Pokhara April 9, he had also heard that 
political party workers were unable to campaign and work 
freely.  Chalise noted that the Home Minister had issued a 
deadline for Maoists to turn in their weapons to the UN and 
now it was up to the local and district administrators to 
 
KATHMANDU 00000761  002 OF 004 
 
 
enforce the law.  The Ambassador worried that, because the 
Nepal Police did not trust the Home Minister to back them up 
against the Maoists, the police would be unwilling to seize 
Maoist arms and make arrests.  Koirala said that he had told 
Maoist Chairman Prachanda that unregistered Maoist arms 
needed to be submitted to the UN; if the police raided Maoist 
houses and seized weapons, the Maoists would be in a 
difficult position. 
 
Need To Equip Nepal Police 
-------------------------- 
 
¶4. (C)  The Prime Minister believed that one reason the Nepal 
Police were not effectively enforcing the law was because 
they lacked sufficient weapons.  The PM stated that he had 
discussed this with Assistant Secretary Richard Boucher in 
New Delhi, who he said had agreed to take the request back to 
Washington (reftel).  The PM said he might ask the Nepal Army 
(NA) to transfer weapons to the police if the U.S. could 
re-supply the NA with weapons by delivering the weapons to 
Nepali peacekeepers in Haiti.  Chalise added that it would be 
easier to deploy the Nepal Police than the NA.  The 
Ambassador noted that, even if that were possible, the 
weapons would need ammunition, which would require overflight 
clearance from the Government of India (GOI).  Moreover, the 
Comprehensive Peace Agreement specifically prohibited either 
party from importing arms or ammunition.  The PM said he had 
asked the Indians to provide 10,000 weapons to the Nepal 
Police for the maintenance of law and order. But, he 
complained, "I don't know what the Government of India wants 
or does not want these days. Sometimes it's like I'm dealing 
with two different (Indian) governments." 
 
Police Lack Leadership Most, Ambassador Says 
-------------------------------------------- 
 
¶5. (C) The Ambassador opined that the Nepal Police suffered 
less from poor equipment and more from lack of confidence in 
their leadership.  He did not accept the hypothesis that the 
police, particularly the Armed Police Force, were outarmed by 
the Maoists.  The Ambassador noted, in particular, that the 
retention of Home Minister Krishna Prasad Sitaula in the 
Interim Government had reinforced the police perception that 
the government would not back them up if they took any 
concrete action against the Maoists.  He added that keeping 
Sitaula as Home Minister had also insulted the Madhesis and 
led them to believe that the government cared more for the 
Maoists than for them.  The Maoist who had shot and killed 
the Madhesi youth Ramesh Mahato in Lahan in January (which 
had sparked massive unrest in the Terai) and the Maoists who 
had kidnapped and beaten Woodlands Hotel owner Hari Lal 
Shrestha in March remained at large even though the Maoists 
themselves had admitted they had committed these crimes.  If 
even those Maoists were not held to account, how could the 
police have confidence in enforcing law and order, the 
Ambassador concluded. 
 
PM Has Cleared King's New Year Speech 
------------------------------------- 
 
¶6. (C) The Ambassador noted that the second package of 
amendments to the Interim Constitution, if passed, would 
provide the Maoists with the means to remove the King even 
before a Constituent Assembly election.  He warned that the 
Maoists might then push for "reform" of the NA and, in the 
process, would seek to control the army.  The Ambassador said 
he hoped that the PM had urged the King not to deliver a 
public speech on the occasion of the Nepali New Year ending 
April 13.  The PM replied sharply that he had cleared the 
language of the King's speech and that he did not anticipate 
the King's remarks would cause a problem.  The Ambassador 
suggested that the Maoists would use any speech, no matter 
what its content, to criticize the King and take to the 
 
KATHMANDU 00000761  003 OF 004 
 
 
streets.  The PM remarked, "Our army is with us and we can 
use them.  We have told the Maoists that once they declare a 
republic, the King would have to be brought to the Parliament 
building.  Who will bring him?  The Maoists?  The Royal 
Army?" 
 
Green Light for Bhutanese Refugee Resettlement 
--------------------------------------------- - 
 
¶7. (SBU) The Prime Minister asked how many Bhutanese refugees 
might be included in a third-country resettlement program. 
The Ambassador said that the U.S. had offered to accept 
60,000, Canada and Australia had indicated perhaps 5,000 each 
and other, European countries might each accept a few hundred 
each.  The PM (in Nepali) commented that refugees should 
first be repatriated to Bhutan.  The Ambassador asked whether 
Nepal would insist that repatriation occur before 
resettlement began.  Chalise said he would discuss it with 
the Foreign Ministry and provide a response within a week. 
The Ambassador responded firmly that Koirala had given a 
clear go ahead on more than one occasion and, on that basis, 
the U.S. had made serious resource commitments.  After a 
brief one-on-one between Chalise and the PM, Chalise said, 
"yes, you can proceed."  Chalise told the Prime Minister (in 
Nepali) that the government could continue to push Bhutan to 
repatriate the residual refugee population which did not 
elect for resettlement. 
 
Nepal's Carpet Industry To Take a Dive 
-------------------------------------- 
 
¶8. (C)  The Ambassador provided the PM with a letter that 
detailed the problems U.S. rug importers had experienced 
recently at the hands of the Maoists and urged the GON to 
take action.  He noted that a leading U.S. importer of Nepali 
rugs had recently expressed worries that Maoist extortion and 
the forced hiring of unqualified Maoist laborers were 
crippling the industry.  Both the quality and timeliness of 
the finished product had dropped dramatically in recent 
months.  Her buyers were losing interest and, therefore, she 
was considering pulling out of Nepal completely.  The 
Ambassador warned that the carpet industry, which employed 
50,000 people in Kathmandu Valley, would die within one year 
if nothing were done to address Maoist interference.  The PM 
did not respond, but nodded his head in acknowledgment. 
 
Comment: Plan Not Apparent 
-------------------------- 
 
¶9. (C) The Prime Minister appears ready to announce a delay 
in the Constituent Assembly election.  While we don't believe 
the PM is interested in a long election delay, he seems to 
have given little consideration to an alternate timeframe. 
We also do not believe that giving more weapons to the police 
will ensure effective law enforcement.  As long as Home 
Minister Sitaula leaves known Maoist criminals to roam the 
streets, there will be little hope for law and order.  Unlike 
Koirala, we worry that the Maoists will use any speech by the 
King, no matter how benign, to create chaos and confusion in 
the capital.  Any move to oust the King and "reform" the 
Nepal Army would likely be a precursor to an outright 
takeover attempt by the Maoists. 
 
Comment: Bhutanese Refugees 
--------------------------- 
 
¶10. C) The Prime Minister remains interested in pushing 
Bhutan to repatriate a number of refugees, but seems to 
understand that he cannot resist pressure from the 
international community to move now on resettlement.  The 
Core Group members in Kathmandu plan to follow up with a 
joint meeting with the Home and Foreign Ministers, which 
Chalise has also agreed to attend, to discuss the way forward. 
 
KATHMANDU 00000761  004 OF 004 
 
 
 
MORIARTY