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Identifier
Created
Classification
Origin
06ASHGABAT704
2006-07-05 12:54:00
CONFIDENTIAL
Embassy Ashgabat
Cable title:  

TURKMENISTAN AND PAKISTAN: PROBLEMS ABOUND

Tags:   PREL  ENRG  PK  TX  KPAO  ETRD  EPET  ZK  PGOV 
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VZCZCXRO9357
RR RUEHDBU
DE RUEHAH #0704/01 1861254
ZNY CCCCC ZZH
R 051254Z JUL 06
FM AMEMBASSY ASHGABAT
TO RUEHC/SECSTATE WASHDC 7521
INFO RUCNCIS/CIS COLLECTIVE
RUEHIL/AMEMBASSY ISLAMABAD 1676
RUEHKP/AMCONSUL KARACHI 0041
RUEHLH/AMCONSUL LAHORE 0005
RUEHPW/AMCONSUL PESHAWAR 0343
RUEHVEN/USMISSION USOSCE 1651
RUEAIIA/CIA WASHDC
RHEHNSC/NSC WASHDC
RHEFDIA/DIA WASHINGTON DC//DHO-2/REA/NMJIC-J2//
RHMFISS/CDR USCENTCOM MACDILL AFB FL//CCJ2/HSE/CCJ5//
RUEKJCS/SECDEF WASHINGTON DC
RUEKJCS/JOINT STAFF WASHINGTON DC//J5/RUE//
						C O N F I D E N T I A L SECTION 01 OF 04 ASHGABAT 000704 

SIPDIS

SIPDIS

STATE FOR SCA/CEN MRUBIN

E.O. 12958: DECL: 07/05/2016
TAGS: PREL ENRG PK TX KPAO ETRD EPET ZK PGOV
SUBJECT: TURKMENISTAN AND PAKISTAN: PROBLEMS ABOUND

ASHGABAT 00000704 001.2 OF 004


Classified By: CLASSIFIED BY AMB TRACEY JACOBSON FOR REASONS 1.4 B AND
D

Summary
-------



1. (C) SUMMARY: PolOff met with Pakistani Deputy Chief of
Mission in Turkmenistan, Dr. Ali Ahmad Arian on June 30 and
talked about the bilateral relationship between Turkmenistan
and Pakistan, including their declining trade relations,
Trans-Afghan Pipeline feasibility, educational exchanges, and
several proposed transport projects linking the two
countries. Arian also shared his views and predictions about
Turkmenistan,s current and future political situation. END
SUMMARY.

Economic and Trade Relations


--------------------------





2. (C) Turkmenistan and Pakistan have a primarily
trade-based relationship right now, according to Arian, with
Pakistan,s main export crops comprising $7 million worth of
fruit and rice, which is traded on &a largely informal
basis.8 In return, Turkmenistan sells Pakistan roughly $4-5
million in cotton through the official state exchange --
although he suspects there is more cotton trade that happens
off-the-books -- as well as a limited amount of liquefied
natural gas.



3. (C) There are approximately 100 Pakistanis living in
Turkmenistan, mostly working for foreign oil or construction
firms, but only a handful of Pakistani firms operating in
Turkmenistan. The largest is the SKB construction company
who owns a major downtown office building in the center of
the city, called the &World Trade Center8 where the
headquarters of the Pakistan National Bank in Ashgabat are
located. According to Arian, SBK is &winding up8 its
business in Turkmenistan as a direct result of obstruction
and other problems with the government. The U.S. Embassy,s
Public Diplomacy Center was evicted from the building at
Niyazov,s insistence in 2003 and SKB has had problems
renting out floors ever since. SBK is currently prohibited
from renting office space to tenants of their choice, namely
businesses, since the government wants retail shops located
there instead. Arian told PolOff that &they are trying to
get out8 and may sell the building shortly, and leave
Turkmenistan for good.

Pakistan National Bank,s Woes


--------------------------





4. (C) Pakistan National Bank is Turkmenistan,s only
international financial institution. Most of the expatriates
living in Ashgabat and many Turkmenistani businesspeople keep
their personal accounts there, because &the bank provides
better service and a wider range of services.8 Previously,
Pakistan National Bank could conduct transactions via their
branch in New York, which let clients easily make foreign
currency payments to businesses in other countries. However,
PNB has since lost this ability and now all international

transactions must go through the Central Bank of
Turkmenistan. Furthermore, PNB has been repeatedly denied
permission from the Central Bank to offer personal loans by
the Central Bank. A further problem is the staffing
situation: although the host government insists that the
Bank maintains a 30/70 percent ratio of Pakistani to
Turkmenistani employees, at present the figure is closer to
10/90, and just a few weeks ago the bank,s new manager was
denied a visa to Turkmenistan. When asked by PolOff how the
bank makes money in the face of all these difficulties, Arian
simply smiled wanly and spread his hands in lieu of an answer.

Bullish on Trans-Afghan Prospects


--------------------------





5. (C) Despite setbacks in the areas of trade, finance and
new transport routes, Arian was somewhat positive on the
prospects a Trans-Afghan pipeline. According to him, the
proposed pipeline,s next step will be &a meeting on the

ASHGABAT 00000704 002.2 OF 004


technical level.8 Although originally scheduled for June,
the meeting has been postponed (Note: The 9th Trans-Afghan
Pipeline steering committee meeting was held in Ashgabat in
February. End Note.). He also noted that there have been
three feasibility studies, and the latest, from the Asian
Development Bank, will be available in the next few months.
He admitted that he was ¬ sure8 that there was as much
gas as the government of Turkmenistan claims. He also
confirmed that the UAE Ambassador approached the Pakistani
Ambassador and expressed interest in providing financing, but
no financial institution was identified. Additionally, Arian
said that the current GazProm-Turkmenistan price negotiations
are &a very good thing8 since increased prices for
Turkmenistan,s gas &increase the feasibility8 and interest
in a Trans-Afghan pipeline.

Proposed Transport Links: Trains, Planes and Automobiles


--------------------------



--------------------------





6. ( C) Pakistan first proposed a rail link between the two
countries in December of 2003. This is part of the plan to
build a massive port facility at Gawadan in Baluchistan, but
also has the potential to be an inexpensive way to ship goods
to and from other Eurasian states, including Russia. The
proposed route would pass through Herat and Kandahar.
However, recent press reports saying that the railroad could
start construction in the next month or two are &a little
over-ambitious,8 admitted Arian.



7. (C) According to Arian, the government of Turkmenistan
has agreed to help upgrade the condition of the roads as
their end of the railway deal. The existing road to Pakistan
is ¬ in very good condition,8 but is only 700km to
Pakistan and if upgraded could boost trade significantly.
The Turkmenistanis have supposedly promised to start the
project this year. Arian also decried the general state of
roads outside Ashgabat, having returned from a trip to Mary
the day before.



8. (C) Prior to Operation Enduring Freedom, Turkmenistan
Airlines flew twice a week between Ashgabat and Karachi.
There have been several attempts since this time to restart
air connections between the two nations. A year ago,
President Niyazov signed an agreement to start regular
flights from Ashgabat to Lahore, but each time the embassy
approaches Turkmenistan Airlines they claim that the route is
not economically feasible, etc. and have declined even to run
provisional flights for a few weeks. Pakistan,s national
airline has regular flights to Meshed, Iran -- just 30km away
from Ashgabat -- and Arian discussed the possibility of
extending the flight route to Ashgabat but Pakistani airline
officials responded negatively, citing Turkmenistan,s strict
visa regime: &they are not giving visas to any person -- who
will travel on our flight?8

Political & Economic Impediments: Pomp & Neutrality


--------------------------



--------------------------





10. (C) Arian attributed the somewhat strained relations
and lack of progress on joint projects to Niyazov,s
dissatisfaction with the amount of attention he has received
from Islamabad. Specifically that there have been no recent
high level (i.e. presidential or prime ministerial) visits to
Ashgabat or invitations from Pakistan, which has made the
Turkmenbashy &a little unhappy that he has been left out,8
said Arian. This is especially keen in light of visits by
Musharref to other Central Asian capitals and to Baku. In
Arian,s assessment, &what,s important to Niyazov are the
ceremonial things. He is not interested in developing an
actual relationship.8 The embassy is pinning its hopes on a
high-level guest for Turkmenistan,s upcoming celebrations
for its fifteenth year of independence. Arian has told
Islamabad to convey to Musharref that he needs to &just have
a cup of tea with this man, and our relationship will
improve.8



11. (C) Another reason Arian cited for the problematic
relationship is Turkmenistan,s dogged insistence on
neutrality. Since &they are not members of most

ASHGABAT 00000704 003.2 OF 004


international organizations that we participate in,8 the
opportunities for agreements and improved relations are
therefore fewer. Furthermore, in Arian,s words,
&neutrality is not an economic concept )- it,s a political
one,8 and so Turkmenistan,s stance of non-alignment often
prevents them from joining economically beneficial
arrangements.

Educational and Cultural Exchanges


--------------------------





12. (C) While Arian maintained that educational exchange
&has been (Pakistan,s) focus for the past few years,8
their initiatives seem to have all but fizzled out. Pakistan
usually sent 30-40 students annually, mostly on professional
courses of study, to the foreign service academy, banking
institutes, and agricultural and textile industry courses.
However, to date this year, only six students have gone, all
of whom are army officers on a military exchange program.
Arian chalked up the loss of students to a lack of interest
because Turkmenistan,s government officials are more
interested in exchanges with &more money8 for per diem.
&We pay room and board, but the stipend is low, perhaps $100
-- $200 per month -- other countries, programs are more
attractive.8 He also said that there are often problems
with language, and that many candidates have a low level of
English proficiency, so there are &few truly qualified
candidates.8



13. (C) In addition, Pakistan has &repeatedly offered
technical assistance in many areas,8 said Arian, including
in the areas of diplomacy, banking, petroleum, etc., but thus
far the ministries have either not approved or accepted any
of these offers for such visiting experts. Cultural exchange
has also been very limited thus far. Arian said since the
Turkmen people &really like music8 he has requested a music
troupe or a folk or pop singer, since the two countries share
a common musical heritage in his opinion. Moreover, the
embassy is organizing a seminar on history and common
ancestry between Pakistan and Turkmenistan, although this has
not yet been approved by the government of Turkmenistan.

Political Assessment, Views On Turkmenistan,s Future


--------------------------



--------------------------





14. (C) In his overall assessment of Turkmenistan, Arian
drew parallels between modern Turkmenistan and communist
China in the 1990s. (Note: Arian served at the Pakistani
Embassy in Beijing during this time. End Note.). He cited
similarities including two different currency rates, constant
intelligence surveillance and distrust of foreigners and &a
certain rudeness8 in their attitude in dealing with
diplomats. They &don,t know the social niceties8
complained Arian, and are often &very rude.8 In his
opinion, &the only difference is that (in China) they had a
party, and here there is just one man.8 Arian also had
several complaints about the poor state of communications and
infrastructure. He was critical of the fact that the
internet does not work reliably and stated that the Embassy
of Pakistan has not been able to send a fax to Islamabad for
the last six months.



15. (C) Characterizing the current political climate as
&very unfree,8 Arian also said that the Turkmenistani
people are &very submissive.8 His major criticism was
saved for the government: &They have ruined their
educational and healthcare system,8 he said, but predicted
that as soon as President Niyazov dies, &the Rukhnama stuff
will go away,8 and that it was tolerated now only because
people knew it would later &fade away.8 Arian also did not
see Turkmenistan as fertile ground for Islamic extremism,
either from a Taliban-like entity or imported from Iran.
&People here dislike Iran,8 he claimed and they are
&staunchly Sunni.8 More importantly, the fact that there
was no existing organized group in Turkmenistan, Islamic or
otherwise, meant that such a movement would have difficulty
taking root.

Comment

ASHGABAT 00000704 004.2 OF 004




--------------------------





16. (C) All aspects of the Pakistan-Turkmenistan
relationship seem to be declining because Niyazov feels
slighted by the lack of attention from Pakistan,s
leadership. Nonetheless, the Pakistanis are undaunted in
their attempts to engage in Turkmenistan on many fronts,
including economics, cultural and educational exchange,
proposing new transport connections and most notably, moving
forward on the Trans-Afghan Pipeline. While things may get
back on track if the Pakistanis manage to secure a high-level
visit during October,s Independence Day festivities, but
despite the sincere efforts by Pakistan, the government of
Turkmenistan may remain a frustrating and unreliable business
partner. END COMMENT.

JACOBSON
JACOBSON