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Koirala unveils new team

Kathmandu, May 2 (Reuters): Nepal’s new Prime Minister, Girija Prasad Koirala, named a seven-member multi-party cabinet today 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.

The cabinet formation was delayed amid reports in the local media that members of a seven-party alliance, which led a 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 defence and more than a dozen ministries to himself.

Today’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 and 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 on 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 US 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. Both visitors are expected to hold talks with Koirala and other leaders.

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