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UNCLAS SECTION 01 OF 03 KATHMANDU 000842 
 
SENSITIVE 
SIPDIS 
 
FOR DEPUTY ASSISTANT SECRETARY OF DEFENSE SCHER FROM CHARGE 
MOON 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM MARR NP
SUBJECT: SCENESETTER: DASD SCHER VISIT TO NEPAL 
 
¶1. (SBU) U.S. Mission Kathmandu warmly welcomes you to Nepal. 
 The last high-level visit to Nepal was A/S Blake's visit in 
June, and your visit will convey the message that the USG is 
committed to supporting Nepal's peace process and transition 
to a full-fledged democracy.  Arriving only a week after the 
installation of new Chief of Army Staff (COAS) Chhatraman 
Singh Gurung, your visit is also an opportunity to deepen 
U.S. ties with the new COAS. 
 
Political Background 
-------------------- 
 
¶2. (SBU) Nepal has been in the throes of a United 
Nations-monitored peace process since the end of a ten-year 
Maoist insurgency in 2006.  The past year and a half has seen 
the election of the Maoists to lead the government, the end 
of a 240-year monarchy, the fall of the Maoist government 
over failure to sack controversial COAS Katawal, and minimal 
progress since Prime Minister Madhav Kumar Nepal formed a new 
government in May.  The GON faces a daunting set of 
challenges, including poor security, a weak economy, lack of 
rule-of-law , and a fragmented society.  Ethnic and 
linguistic identity politics have grown into a contentious 
issue the GON ignores at its own risk. 
 
¶3. (SBU) The M.K. Nepal-led government struggles to keep the 
unwieldy 22-party coalition intact amidst intra-party 
bickering and differences over key constitutional and policy 
issues, such as the shape a federal Nepal should take.  The 
Constituent Assembly (CA) has repeatedly missed deadlines for 
drafting elements of a new constitution, and most observers 
believe it unlikely that the CA will meet its May 10, 2010 
deadline for completing work.  The parties are unable to 
reach consensus on how to address unresolved peace process 
issues, notably how to proceed with integration and 
rehabilitation of Maoist combatants. 
 
¶4. (SBU) While daunting challenges remain, we have seen 
limited progress in the Nepali peace process in recent weeks. 
 The Maoists ended their boycott of the Special Committee on 
Integration and Rehabilitation, which has met twice in two 
weeks.  The CA's Constitutional Committee, the key drafting 
body, elected a new chair - a position that had been vacant 
for three months.  The Maoists - despite the defeat of their 
candidate - have agreed to work with the new chair. 
 
New Security Plan 
----------------- 
 
¶5. (SBU) Among Nepal's most pressing challenges is the lack 
of law and order, especially in the southern plains of the 
Terai.  More than a hundred armed groups operate in the 
Terai, many under political auspices of rights for the 
minority Madhesi people.  The previous government appointed 
teams to negotiate with the various armed groups. While some 
of the groups sent delegates to talks, little progress was 
made.  Similarly, the Maoist-affiliated youth wing, the Young 
Communist League (YCL), continues to engage in illegal 
activities such as threats and extortion throughout the 
country.  The YCL also clashes with the police and other 
party-affiliated youth wings such as UML's Youth Force. 
 
¶6. (SBU) To address the law and order crisis, Home Minister 
Bhim Rawal, a Communist Party of Nepal-United Marxist 
Leninist (UML) leader who oversees Nepal's internal security 
portfolio, unveiled a special security plan on July 29 to 
improve the law and order situation across the country.  The 
security plan calls for 16,000 new security officers.  The 
proposal would augment police patrols and effectively place 
the Nepal Police, Armed Police Force, and National 
Investigation Department under a unified command.  Rawal 
 
KATHMANDU 00000842  002 OF 003 
 
 
expressed determination to end "bandhs"--ad hoc, 
widely-enforced strikes that frequently include road 
blockades to disrupt traffic and force closure of public 
offices and educational institutions.  The plan also focuses 
on curbing organized crime and other serious offenses as well 
as countering the threat of armed groups in the Terai.  Since 
the announcement, there has been a noticeable improvement in 
law enforcement efforts, particularly in Kathmandu and the 
eastern Terai. 
 
Role of the Military 
-------------------- 
 
¶7. (SBU) Confined to barracks under the terms of the 2006 
Comprehensive Peace Agreement, the Nepal Army (NA) remains 
uneasy about the evolving peace process.  The NA doubts the 
sincerity of the Maoists and remains concerned about its role 
in a "new Nepal."  Key issues facing the NA are eventual 
integration of some of the Maoist combatants into its ranks; 
downsizing a force that more than doubled in size from 45,000 
to 95,000 in fewer than five years; lack of equipment and 
ammunition; and fully transitioning to the idea of civilian 
control.  The NA is one of the leading contributors to UN 
peacekeeping mission, with more than 4,000 troops currently 
serving in UN missions. 
 
¶8. (SBU) The Ministry of Defense (MOD) does not yet provide 
effective oversight of the Nepal Army, but there are positive 
signs that this may be changing.  The MOD does not control 
the Army's budget and - because it does not directly manage 
money and procurement - is not seen as an attractive 
assignment by the best government bureaucrats.  The Ministry 
has, however, begun to assert its role by denying promotion 
recommendations for officers who are alleged human rights 
violators.  In the past, the MOD would not have questioned a 
COAS's forwarded recommendations. 
 
¶9. (SBU) General Chhatraman Singh Gurung took over as the 
Chief of the Army Staff (COAS) on 9 September 2009 replacing 
General Katawal, the controversial previous COAS.  Katawal's 
hard line stance toward the Maoist culminated in the collapse 
of the Maoist-led government when then-PM Dahal attempted to 
fire him in May.  In his standoff with the Maoists, General 
Katawal had the support of 18 political parties--and 
India--which propelled him to the center of the stalled peace 
process.  Despite his retirement, the Maoists have not 
recovered from that episode.  The new COAS--the first ever 
from an ethnic minority group to be COAS--is expected to be 
much less outspoken and less politically involved than 
Katawal was. 
 
¶10. (SBU) The military also continues to be dogged by 
allegations of human rights abuses committed during the 
10-year civil conflict.  Human rights groups, both domestic 
and international, have criticized the perceived lack of 
accountability for abuses.  This has led to proposals in the 
U.S. Congress to restrict military assistance to Nepal. 
Since the end of the civil conflict, no one - security forces 
or Maoists - have been criminally charged for human rights 
abuses.  The culture of impunity remains a major challenge 
for Nepal's democracy.  Progress toward instituting a truth 
and reconciliation commission, as required by the CPA, has 
been slow, although there has been some progress on formation 
of a related disappearances commission. 
 
Defense Cooperation Activities 
------------------------------ 
 
¶11. (SBU) The U.S. provides a multi-spectrum approach to 
defense cooperation and security assistance to Nepal.  Beyond 
standard mil-to-mil activities, the Office of Defense 
 
KATHMANDU 00000842  003 OF 003 
 
 
Cooperation oversees 1207 funds, disaster management 
exercises, Global Peace Operations Initiative (GPOI) events, 
and various other regional and country focused efforts to 
look at security issues from a comprehensive perspective. 
Examples include a series of conferences on security sector 
reform, a multilateral exercise focused on planning for an 
major earthquake in the Kathmandu Valley, a Center of 
Excellence event on H1N1 Pandemic Influenza and HIV/AIDS, 
mobile training teams for disaster planning, and a 
Joint/Combined Exercises for Training focused on humanitarian 
assistance/disaster response and peacekeeping operations. 
 
¶12.  (SBU) International Military Education and Training 
(IMET) funding has been consistently provided to Nepal to 
improve the professionalism of Nepal's security forces and to 
promote the importance of civil-military relations, human 
rights and democracy.  However, in FY 2008, Nepal was 
restricted to Enhanced-International Military Education and 
Training (E-IMET) courses.  Congress lifted this restriction 
in FY 2009.  In FY09 IMET funds trained 29 personnel. 
 
¶13.  (SBU) After three years of no funds, FMF for FY10 is 
proposed at $1.1 million.  Draft FY10 Foreign Ops Bill 
legislation, however,  includes sanctions on FMF for Nepal 
tied to concerns about human rights abuses by the Nepal Army, 
civilian control over the NA, and lack of progress on 
integration.  This draft language stipulates that FMF may 
flow to Nepal only when 1) the NA cooperates fully with human 
rights investigations and prosecutions and 2) the GON 
implements security sector reforms, including establishing a 
functioning Ministry of Defense and budget transparency and 
accountability, and 3) facilitates integration.  Exemptions 
are made for peacekeeping and humanitarian operations.  The 
new Chief of the Army Staff (COAS) General Gurung, told the 
Charge' in Kathmandu recently that the Army is willing to 
investigate and punish human rights cases of concern to the 
USG.  According to the press, in his first address to the 
officers at Army Headquarters on 10 September, Gurung said 
the Army would honor civilian supremacy, democratic 
principles, and emphasized a "zero-tolerance" for human 
rights violations. 
 
 
Conclusion 
---------- 
 
¶14. (SBU) The Nepal peace process will likely muddle along, 
but a solution to key issues like integration and 
rehabilitation of the Maoist army and political consensus 
seems distant.  The Nepal Army is a professional force, very 
pro-American, and one of the top five force contributors to 
UN peacekeeping operations.  They have obeyed the rules of 
the Comprehensive Peace Agreement, but overall they continue 
to distrust the Maoists' intentions. 
MOON