Regional Analysis ----
¶9. (C) The Fourth King Jigme Singye Wangchuck also commented on the new Nepali government. A keen observer of the region, the Fourth King described the political climate in Nepal as "unpredictable" and argued that country's infrastructure and economic progress were "sliding backwards." His Majesty warned that the Prachanda government "will not last long," especially once the Nepalese people realize the Maoists "will not deliver." Despite these criticisms, Bhutanese leaders agree there are many areas for bilateral cooperation, especially on hydropower projects.
¶10. (C) The Fourth King confided, "the Bhutanese have never looked fondly on China" given its actions in Tibet in the 1950s and 1960s; consequently, the government pursues a "cautious policy" with China.
His Majesty also divulged that negotiations on the demarcation of Bhutan's northern border have not progressed because China has been "surprisingly difficult." He explained many Bhutanese had expected greater "generosity" from China given its relative size; however, China has frustrated Bhutanese negotiators by offering to return land that already belongs to Bhutan in exchange for land in disputed areas. Stalled border talks have prevented Bhutan from opening trade routes with its northern neighbor, despite reports from the Economic Minister that China is "very keen" to proceed.