DAS FEIGENBAUM'S ROUNDTABLE MEETINGS WITH CIVIL

UNCLAS SECTION 01 OF 04 BISHKEK 001521

SIPDIS

SENSITIVE

SIPDIS

DEPARTMENT FOR SCA/CEN

E.O. 12958: N/A
TAGS: PGOV PREL PINR KCRM KG
SUBJECT: DAS FEIGENBAUM'S ROUNDTABLE MEETINGS WITH CIVIL
SOCIETY AND NGOs IN KYRGYZSTAN

BISHKEK 00001521 001.2 OF 004


Sensitive but unclassified. Not for Internet distribution.


1. (U) SUMMARY: On October 17 and 18, DAS Evan Feigenbaum
held separate roundtable discussions with political
analysts, democracy NGO leaders, economic development NGO
leaders. Participants offered a range of views about what
would happen as a result of planned opposition protests on
November 2, though most thought there government and
opposition would reach some sort of compromise before then.
All agreed there was a serious need for constitutional and
judicial reform, both to protect democratic rights and to
improve the business climate. DAS Feigenbaum also visited a
USAID-funded condominium association project where he saw
the tangible benefits of grassroots organization and
initiative: better living conditions and increased property
values. END SUMMARY.

Political Analysts: Lack of Policy, Talent
--------------


2. (SBU) On October 18, DAS Feigenbaum met with a group of
Kyrgyz and American political observers. The group
generally agreed there were serious governance problems in
Kyrgyzstan, and they were concerned about the opposition's
upcoming mass protest on November 2, though several thought
the government and opposition might reach some sort of
compromise ahead of the protest. Describing the current
political struggle, former Foreign Minister Muratbek
Imanaliyev said that the problem was not with the system of
government, but stemmed from the current government lacking
any policy or "sense of national interest." The current
leadership operated from an outdated point of view; it had
no understanding of the West, and an even "worse conception"
of the East. As a result, foreign partners did not take
Kyrgyzstan seriously as a country. Lamenting a change from
previous eras, Imanaliyev said the absence of an educated
"elite" with a shared sense of nationhood and national
interest hurt Kyrgyzstan today. Where there is such an
elite, power is just a means to achieve goals; where there
is no elite, there is just a struggle for power. Imanaliyev
said the current crisis was merely a fight to replace
Bakiyev.


3. (SBU) Several in the group thought that the November 2
protest would last as long as there was money to support the
protesters but that nothing would change in the end. Former
Director of the International Institute for Strategic
Research Valentin Bogatyrev jokingly did the math on how
much it would cost to put a protestor on the street and how
many days a crowd would need to remain on the street to
threaten the government. Nursuluu Akhmetova, from the
Business Environment Improvement Project, thought that the
government would stay in power. She agreed that the
opposition had no goal beyond seizing power for themselves,
but she also criticized the government's meager attempts to
make policy. Bogatyrev, however, said he thought Bakiyev
was underestimating the capacity of the opposition to rally
support in Bishkek and in the regions, but that the "fate of
November 2" would be resolved beforehand through compromise
and offering new positions to the opposition. Bakiyev, he
said, was more flexible than Akayev, and could "adopt new
views."


4. (SBU) Nurlan Sadykov, of the Institute for Constitutional
Policy, warned that a provocation from either side was
possible on November 2. He said the opposition leaders were
trying to "calm down" their most extreme members, but they
were not strong enough to control all elements that would be
in the crowd on November 2. He hoped the President would
"find the strength" to reach out to the opposition, though
Imanaliyev cracked that the opposition would see that as

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weakness. Erkina Ubysheva, of the Association of Civil
Society Support Centers, said civil society viewed the
current situation as a "crisis." She said that civil
society ideally should be able to play a mediating role, but
Kyrgyz civil society was now seen as "the opposition,"
because some civil society leaders had joined the
opposition.


5. (SBU) DAS Feigenbaum was asked about an AKIpress report,
based on a press release from the Kyrgyz Foreign Ministry,
that he had told FM Jekshenkulov major U.S. firms are ready
to invest in Kyrgyzstan, especially in the energy sector.
Feigenbaum explained that the press report was half right:
American firms are interested to invest in Kyrgyzstan, but,
he noted, what he actually said to Jekshenkulov was that
this only would be possible if the Kyrgyz government took
significant steps to improve the business climate, move
forward on privatization in the energy sector, and tackle
corruption. DAS Feigenbaum noted that Kyrgyzstan had
excellent natural resources and great potential in hydro-
power, and there were eager markets for electric power in
the south, as far away as Pakistan, but the necessary
investment would only come when there was rule of law,
transparency, and a better atmosphere for private investors.
The group agreed that Kyrgyzstan needed to take further
steps to reduce barriers to trade.

Democracy NGOs: No Leaps Forward or Backward
--------------


6. (SBU) On October 17, DAS Feigenbaum and the Ambassador
held a democracy roundtable with Edil Baisolov of the
Coalition for Democracy, Azamat Kerimbekov of ABA/CEELI,
Marat Tazabekov of AKIpress, Elvira Sarieva from Internews,
Natalie Losekoot of the Eurasia Foundation, and Cholpon
Jakupova, Adilet Legal Clinic. DAS Feigenbaum asked the
group about constitutional reform. The general consensus
was that President Bakiyev had co-opted the constitutional
reform process and that the timing of reform was
unpredictable. The group generally believed that the public
would not really have a choice in the matter, and that
ordinary people were not terribly interested in
constitutional reform, anyway. Baisolov went as far to
describe the process as "theater of the absurd." But
according to Jakoupova, there was a serious need for
constitutional reform because of the lack of justice, due to
the corrupt dependence of judges on the president and
parliament. In addition, there was a lot of fear in
Kyrgyzstan today.


7. (SBU) There was no consensus in the group as to what
would happen in the current political struggle, as it was
unclear who was in the stongest relative position. On the
one hand, the group seemed to feel that the President was
weak. Bakiyev had taken steps to stall constitutional
reform, had reorganized the security services, and had
attempted to gain some support by bringing the north-south
divide out into the open. But on the other hand, the group
conceded that the steps he had taken had given him more
control and helped him to be more effective at clamping down
on free speech. According to Baisolov, the window of
opportunity for reform was very small. The bottom line for
the group appeared to be that this fall will not represent
any great leaps forward or backwards and that there was wide
scope for compromise.

Economic Development NGOs: Judicial Reform Needed
-------------- --------------


8. (SBU) On October 18, DAS Feigenbaum met with a group of
individuals representing economic and enterprise development

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NGOs. Margarita Cherikbaeva of the EBRD Micro and Small
Enterprise Finance Facility described the success of her
program's work with banks to expand loans to small and
medium enterprises. The program had placed over USD
80,000,000 in loans with an average size of less than USD
2400 through lenders who had been trained by USAID technical
assistance to evaluate cash flow instead of traditional land
or equipment collateral. The program had grown rapidly and
was evidence of the strength of the small/micro sector in
this country. Tatiana Kim of the Chamber of Tax Accountants
spoke passionately about the drastic need for civil service
reform in Kyrgyzstan. According to her, the number of civil
servants had increased five-fold since Soviet times, but the
level of compensation was now absurdly low, creating
incentives for corruption. Tax reform also was an urgent
need, and she believed the size of the shadow economy was
far greater than the government estimates. Umar Shavarov of
the International Business Council, a lobbying group for
Kyrgyz and foreign companies, agreed with Kim that judicial
reform was the number one concern of business. He said
"everything in Kyrgyzstan is possible; everything is
impossible. It just depends on how you play the
[corruption] game." Christine Smith, AmCham's Executive
Director, also shared concerns about the need for judicial
reform, and said her organization was looking to do more to
coordinate with her counterparts in the region. Isaac
Swartsman, an advisor to the USAID-funded economic policy
reform project, spoke about the continued need to respect
the independence of the Central Bank, and agreed with
comments that the drug economy and money laundering both may
be vastly underestimated in the Kyrgyz Republic because of
the open foreign exchange regime.

Condominium Association: Tangible Benefits
--------------


9. (U) On October 18, DAS Feigenbaum visited a USAID-funded
project to develop local condominium associations. Under
the Local Government Initiative (LGI),USAID has helped to
bring 59,000 units into such associations, and a National
Condominium Association, representing condominium
associations from across the country, was formed in July

2006. Ludmila Salyakaeva, Chair of Svobodny Dom
Condominium, gave an overview of the assistance provided by
USAID, including co-funding roof repairs, help with
registration, and training for the association. The
benefits of condominium ownership of the common areas of the
building were readily apparent. The condominium
association's building had a well-kept garden with a new
fence, a repaved entrance path, freshly painted hallways and
a new roof. Standing in contrast across the yard, an
identical building -- but without a condominium association
-- had a poorly kept yard surrounded by an old wooden fence,
an entrance path that was in poor shape, and dark, smelly
hallways.


10. (U) Having a condominium association also encouraged
residents to make improvements to their own apartments.
Salyakaeva showed the top floor apartment that had recently
renovated. She noted that she would have never purchased,
much less renovated, a top floor apartment if it wasn't for
the association. Without an association, any roof leak
ended up being the problem of the apartment owners on the
top floor. But with the association, roof repairs were the
responsibility of all members. There are 33 units in the
apartment building, and most of the owners made improvements
after the association was formed. Forming the association
also had a significant impact on property values. According
to Salyakaeva, the value of a three-room apartment in her
building was USD 27,000. The identical apartment in the
other building had an asking price of only USD 18,000. She

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also noted that there was a mortgage market in Kyrgyzstan,
but most people used their own savings and loans from family
or friends to purchase a home


11. (U) Despite the benefits, not all buildings have formed
condo associations, according to Salyakaeva. The City
Housing Management Company still exists, and some people
just prefer to keep things as they are. Salyakaeva said it
was a matter of attitude; someone has to want to organize
it, manage it and collect dues. Finally, the USAID project
was established as a way of introducing grass-roots
democracy. When asked whether people in housing
associations tend to become more active, her reply was no.
She believed that active people form and are in housing
associations. Hence, associations probably don't make
people more active, but provide those who are with an outlet
and the tools to make meaningful change.


12. (U) DAS Feigenbaum has cleared this cable.

YOVANOVITCH