In recent statements (http://blog.beliefnet.com/news/2008/12/dalai-lama-talks-of-complete-r.php), the Dalai Lama has strongly implied that he might retire from politics completely. I’m not sure how seriously to take this sort of talk—I tend to think it’s more likely that he’s sort of testing the waters.
However, if it turns out that he really does retire from politics, I wonder if that might not end up being better for the Tibetan movement in the long run. I think that the fundamental problem with the negotiations between Beijing and the Dalai Lama so far is that they are not interested in negotiating on the same subject. The Dalai Lama wants to negotiate on behalf of the Tibetan people for political reforms in Tibet. The government in Beijing has never said they wanted to talk about that; instead, they have said they will negotiate about the Dalai Lama’s personal status. If the Dalai Lama gives up his political role and leaves it to the exile prime minister to have political negotiations, then maybe it will become possible for him to start negotiations with Beijing regarding his personal status. That is, he might actually be able to return to Tibet as an individual. By doing so, he might be able to create a degree of trust and goodwill which would eventually make political reforms possible.
The tricky part that remains, though, is that the Dalai Lama can give up his political role, but I don’t think he can retire from his religious role. In order to return, he would probably need some kind of reliable assurances that there would be reduced political interference in Tibetan religion. Most importantly, how could he return to Tibet if he thought the CCP would still control the selection and education of the next Dalai Lama?