May 2, 2006

Nepal’s new PM names cabinet

By Gopal Sharma

KATHMANDU (Reuters) - Nepal's new prime minister, Girija
Prasad Koirala, named a seven-member multiparty cabinet on
Tuesday with the task of negotiating peace with Maoist rebels
and curbing the king's powers.

King Gyanendra, who bowed to bloody street protests last
week and handed power back to political parties, appointed the
cabinet on Koirala's recommendation, a statement from the
palace said.

"We believe this council of ministers will receive the
cooperation of all in the discharge of its duty for the welfare
and prosperity of Nepal and the Nepali people," the king said
in the statement.

The cabinet formation was delayed amid reports in the local
media that members of a seven-party alliance -- which led a
mass campaign for democracy -- jostled for positions.

Ram Sharan Mahat, a liberal economist, was named finance
minister and Khadga Prasad Oli was appointed deputy prime
minister in charge of foreign affairs in the new cabinet.

Koirala, who was sworn in on Sunday, kept the key post of
defense and more than a dozen ministries to himself.

Tuesday's announcement came two days after Nepal's
parliament unanimously approved a proposal by the new prime
minister to hold elections for a special assembly to write a
new constitution to decide the future of the monarchy.

No date has been fixed for the vote.

The cabinet, which is an interim arrangement, faces the
difficult task of holding talks with the Maoist rebels, win
their backing for the election to the assembly and reverse laws
introduced by the king to maintain his grip on power.


The government also faces a cash crunch as political
instability has taken a toll of the economy.

"How to increase revenue and meet government expenditure is
a challenge," said Keshav Acharya, a top official of the
central Nepal Rastra Bank.

Revenue collection stood at a little over $661 million as
of mid-April against the annual target of $1.15 billion at the
end of the current fiscal year in mid-July, he said.

The cabinet announcement also came as U.S. Assistant
Secretary of State for South and Central Asia, Richard Boucher,
became the first senior foreign official to visit the country
since King Gyanendra returned power.

Norway's Development Cooperation Minister, Erik Solheim, is
also due to arrive in Kathmandu on Tuesday. Both visitors are
expected to hold talks with Koirala and other leaders.

The king appointed Koirala as prime minister last week on
the recommendation of the seven parties that launched weeks of
anti-king protests in which at least 15 people were killed and
thousands wounded.

The Maoists, who have been pressing for the assembly, have
not reacted to parliament's proposal for the vote. But a senior
rebel leader called it positive.

"We have taken this positively," Sunil, a rebel leader who
goes by one name, told Reuters.

"But it is not complete. There can be a conspiracy against
the people," he said without elaborating.

Koirala has already invited the rebels, who control huge
swathes of the countryside, for talks to try to bring peace to
the impoverished nation.

Political parties are under popular pressure to abolish the
monarchy and turn Nepal into a republic. That is also a key
demand of the Maoists to end their decade-old insurgency in
which more than 13,000 people have been killed.