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C O N F I D E N T I A L SECTION 01 OF 02 KATHMANDU 000814 
 
SIPDIS 
 
E.O. 12958: DECL: 09/01/2019 
TAGS: PGOV PINR PREL KDEM CH IN NP
SUBJECT: INDIA VISIT REINFORCED NEPAL'S RULING COALITION -- 
SLIGHTLY 
 
REF: A. NEW DELHI 1801 
     ¶B. KATHMANDU 792 
 
Classified By: Charge d'Affaires, a.i., Jeffrey A. Moon. Reasons 1.4 (b 
/d). 
 
¶1.  (SBU) Summary:  Prime Minister Madhav Kumar Nepal's 
August 18-22 visit to New Delhi, widely viewed as more 
symbolic than substantive, somewhat cemented his position as 
the leader of the Nepalese government but does not guarantee 
he will be able to remain in power.  The visit did, however, 
illustrate the Government of Nepal's (GON) dependence on 
Indian political and economic support, which will continue to 
dominate Nepalese affairs.  Long-term gains for Nepal's peace 
process -- and Indo-Nepal relations during this period -- are 
likely to be minimal. 
 
¶2.  (SBU) PM Nepal, accompanied by a large delegation -- 
including Tourism Minister Sharat Singh Bhandari, Commerce 
Minister Rajendra Mahato, Finance Minister Surendra Pande, 
Energy Minister Prakash Sharan Mahat, Industry Minister 
Mahendra Prasad Yadav, Constituent Assembly members, senior 
GON officials, a number of businessmen, and media 
representatives -- met with several Indian officials and 
political leaders (Ref A).  Foreign Minister Sujata Koirala 
cancelled at the last minute (Ref B).  End summary. 
 
Symbolic Support 
---------------- 
¶3.  (C) Prime Minister Madhav Kumar Nepal's five-day visit to 
India beginning August 18 -- his first official foreign visit 
as Prime Minister -- garnered symbolic support but little of 
substance.  Alok Sinha, Deputy Chief of Mission at the Indian 
Embassy in Kathmandu, told Charge on August 27 the Government 
of India (GOI) supported PM Nepal's visit as a symbolic 
gesture to bolster the GON and pressure the Maoists to return 
to the government; however, he emphasized that the visit 
involved nothing significant.  He explained the GOI's 
strategy is to support M.K. Nepal's government both to 
increase coalition stability and exert external pressure on 
the Maoists that could magnify the split between those who 
favor the democratic process to gain power (e.g., Pushpa 
Kamal Dahal aka Prachanda) and those who favor "revolt" as 
the means to gain power.  Sinha said the GOI's primary 
interest in Nepal is enlisting Nepali support in efforts to 
enhance security in the Terai region. 
 
¶4.  (C) Bhekh Bahadur Thapa, a former Ambassador to India and 
the United States, stressed to Emboff on August 28 that the 
PM's visit was empty of substance by design.  Thapa advised 
PM Nepal before the visit to prove himself a person India 
could stand behind as head of a stable government.  Thapa 
told Emboff the visit was deliberately low-key so as not to 
disturb the domestic political balance.  The Ambassador said 
major Indo-Nepal decisions could be made later, perhaps when 
the Maoists return to the fold. 
 
¶5.  (SBU) Akhilesh Upadhyay, the editor of The Kathmandu Post 
and an Embassy contact, corroborated the view of a 
symbolically-heavy but results-deficient visit.  Upadhyay, 
who accompanied the PM to New Delhi, observed in his 
newspaper on August 25 the PM's visit was purely political 
because M.K. Nepal wanted to be seen as a more pliant PM than 
Pushpa Kamal Dahal had been.  The editor noted the GOI's 
perceived hostility to the Nepalese Maoists and said the 
longer the GOI retained this hostility, the longer the 
UML-led government could remain in power.  Referring to the 
proposed trade treaty that dominated media coverage at the 
end of the visit, Upadhyay quoted an unnamed Indian official 
who said that was a last-minute negotiation conducted at the 
behest of the Nepalese delegation to "bag as many accords as 
possible." 
 
Trade Almost an Afterthought 
---------------------------- 
¶6.  (C) The delegation made incrementally useful but -- as 
with the political discussions -- mostly rhetorical economic 
 
KATHMANDU 00000814  002 OF 002 
 
 
and trade gains.  India pledged NRs. 32 billion (USD 412 
million) in aid for various development projects, including 
road and rail infrastructure and border and customs 
facilities (Septel).  The GOI also agreed to assist human 
resource development, including police and civil service 
training and exchange programs, and health and education 
projects.  The Nepalese media widely praised the assistance 
package, with one newspaper trumpeting, "(PM) Nepal Brings 
Home the Bacon."  The glowing coverage ignored the fact that 
none of the projects -- nor India's promise to fund them -- 
is new; some of the projects were first proposed a decade 
ago.  Even an agreement for a new trade pact merely repeats 
existing arrangements.  Arun Chaudhary, the president of the 
Nepal-India Chamber of Commerce and a member of the PM's 
delegation to India, told Emboff on August 28 that it was "a 
nice trip," implying a vacation-like atmosphere in lieu of 
any real achievements.  Bhekh Thapa separately told Emboff 
that the lack of trade progress was not a bad thing, 
reiterating the true purpose for both India and Nepal was a 
token show of support.  Other businessmen who accompanied the 
PM on the trip were less restrained and openly expressed to 
us disappointment at the lack of concrete achievements. 
 
Immediately Beneficial but Ultimately Irrelevant 
--------------------------------------------- --- 
¶7.  (C) Some observers assess that the PM's visit would have 
short-term benefits to the GON but ultimately would be 
meaningless to the stability of M.K. Nepal's government and 
the wider peace process.  Rhoderick Chalmers, Country 
Representative for the International Crisis Group (ICG), was 
sharply critical of Indian policy toward Nepal during a 
meeting at the Australian Ambassador's residence on August 
¶27.  Chalmers accused the GOI of being knee-jerk anti-Maoists 
without any long-term strategy for advancing Nepal's peace 
process.  Chalmers said the Indians were trying to prop up PM 
Nepal by announcing such a large economic aid package, but 
this "clumsy diplomacy" would not work.  He reported that 
contacts between the GOI and the Maoists continue but not at 
a high level, and no policy movement for either side has 
resulted from these discussions.  The ICG representative was 
also highly critical of the Prime Minister.  Chalmers 
characterized M.K. Nepal as ineffectual, corrupt, and more 
interested in the trappings of power than in governing the 
country. 
 
Comment 
------- 
¶8.  (C) Indian influence, perceived or otherwise, has as 
prominent a role in Nepalese domestic politics as any of the 
political parties.  The PM's visit was a ritual to restore 
the tradition of the first foreign visit of the Nepalese 
Prime Minister being to India -- perhaps an attempt to 
reassure the GOI that whatever influence China had with the 
Maoist-led government (Puspha Dahal's first foreign visit as 
PM was to Beijing), India is the more important neighbor. 
Many of post's interlocutors have posited that M.K. Nepal's 
government may fall after local holidays in September or 
October, and the PM's solicitation of Indian support seems to 
have had little effect on this opinion.  PM Nepal may have 
gained a bit of extra time, but unless he can manage to build 
consensus among the political parties -- particularly with 
the Maoists -- his coalition's grip on power will remain 
tenuous. 
MOON