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2006-10-26 16:24:00
Embassy London
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DE RUEHLO #7623/01 2991624
O 261624Z OCT 06
						C O N F I D E N T I A L SECTION 01 OF 04 LONDON 007623 




E.O. 12958: DECL: 10/23/2016

LONDON 00007623 001.2 OF 004

Classified By: PolMinCouns Maura Connelly; reason 1.4 (b, d)

1. (C) SUMMARY: SCA DAS Evan Feigenbaum met in London
October 23 with officials of the UK's Foreign and
Commonwealth Office (FCO) and the Department for
International Development (DFID), to exchange views on policy
and programs in Central Asia. Key policy points:

- Both countries seek to bolster the sovereignty and
independence of the five Central Asian states; policy and
programs flow from that shared strategic goal.

- The USG and UK are willing to support Kazakhstan's bid to
chair the OSCE, but only when it meets the standards expected
of a Chairman in Office. Realistically, this cannot happen
in time for a 2009 chairmanship. The UK position tracks
closely with the U.S. view, including on steering Kazakhstan
toward 2011.

- The USG wants the EU to maintain sanctions on Uzbekistan;
London concurs but notes the Germans, in particular, have a
different view.

- In the run-up to November 2 elections in Kyrgyzstan, the
USG and EU need to deliver parallel and consistent messages
to both government and opposition that they must (a) avoid
violence; (b) act legally; and (c) act constitutionally. In
addition to these parallel private messages, we should
consider a public statement, depending on how the situation

- In Central Asia, DFID conducts programs only in the Kyrgyz
Republic and Tajikistan, but seeks to increase its
annual assistance from GBP 5.5 million and GBP 3.5 million
respectively now to GBP 10 million each by 2010.



2. (U) Simon Smith, FCO Director for Russia, South Caucasus
and Central Asia(RusSCCAD), chaired a two-hour
meeting, focused mainly on strategy and policy but with
participation from officials responsible for assistance
programs. Participants:

USG: SCA DAS Evan Feigenbaum; SCA Senior Adviser for
regional economic integration Robert Deutsch; EUR/ACE
Director Tom Adams; EUR/ACE Deborah Klepp; Poloff (notetaker).

UK: Smith; RusSCCAD Deputy Head Andy Page; Central Asia
Section Head Mike Welch; OSCE/Council of Europe Team Leader
Lisa Whanstall; Caspian Energy Adviser Angus Miller; DFID
Head of Europe and Central Asia Pauline Hayes.

3. (C) OVERVIEW: Smith said Europe needs to sharpen its
focus on Central Asia and to devote more resources to it.
Germany's intention to do just that during its EU Presidency
(first half of 2007) is welcome. Feigenbaum provided an
overview of U.S. strategy and policy, noting that his visit
to London reflects the USG's desire to work
more closely with key partners in Central Asia, but also to
fold strategy/policy together with programs/budgets in an

integrated consultation with key partners, notably the UK,
Germany and Japan. He rejected the mentality and
vocabulary of the "Great Game" as an insult to Central
Asians, reducing them to the "passive receptacles" of the
strategies of outside powers. The reality, he said, is the
U.S. is focused on Central Asians themselves, bolstering
their sovereignty and independence. The five states, he
said, are not the "objects of struggle" with third countries
but the focus of U.S. policy. Unfortunately, he admitted,
others, including Russia, often appear to see relationships
in Central Asia in competitive terms; he noted challenges in
the Russian-dominated media space. But, he said, the USG is
succeeding in Central Asia with a multi-dimensional approach
focused on security, economics, democracy and transnational
issues, but also on issues that wedge across the seams of
these baskets. For example, rule of law is not just a
democracy/governance issue; it also enhances economic and
commercial development by creating predictability and
transparency. Likewise on customs and borders, which are
both security and economic issues. In addition to policy

LONDON 00007623 002.2 OF 004

consultations, Feigenbaum and Smith agreed U.S. and UK
analysts should meet to think systematically about the
region, including issues of political succession.

4. (C) KAZAKHSTAN: Smith provided a parallel overview of UK
policy. UK priorities, he noted, often track closely with
USG priorities. Kazakhstan is a key UK focus. Smith noted
that Kazakhstan's President Nazarbayev is due to visit London
November 21, and the UK has substantial investment and
interests in that country. Within the EU, he acknowledged
that, while Germany broadly shares the UK strategy for
Central Asia, it differs on specific issues, including
Kazakhstan's bid to chair the OSCE in 2009: the UK agrees
with the USG that Kazakhstan does not yet meet OSCE
standards, whereas Germany supports the candidacy for 2009.
Whanstall added that HMG wants the GOK formally to defer its
candidacy from 2009 to a later date by the time of this
year's OSCE ministerial on December 4; the UK will be
lobbying EU members this week against the idea of postponing
a decision on Kazakhstan's candidacy from December for an
additional six months. Page said the UK has advised
Kazakhstan it would help itself with the OSCE by not being so
close to Russia and so understanding of Uzbekistan's

5. (C) Feigenbaum stressed that the United States has a
positive and multi-faceted relationship with Kazakhstan.
Reflecting this, Nazarbayev's recent visit to Washington had
gone very well. Feigenbaum welcomed the UK position on
Kazakhstan's OSCE bid, agreeing that postponement is a bad
idea and arguing for a "clean decision" in December: even
the GOK, he said, had at various points expressed interest in
a clean decision. Neither the USG nor Kazakhstan are seeking
confrontation. Washington is prepared to give technical
support to Kazakhstan in meeting the standards by 2011,
provided it is willing to implement commitments. The way
forward, he said, is for the GOK to commit to major reforms,
notably the four reforms mentioned in Kazakhstani DFM Rakhat
Aliyev's August speech to the Democratization Commission, and
then to agree on implementation steps with OSCE. Progress
needs to be assessed according to a common OSCE standard, not
a diverse array of individual national standards. Noting
that Nazarbayev plans to visit Brussels on December 3,
Feigenbaum urged Europe to deliver a consistent message to
the GOK about standards and 2011.

6. (C) UZBEKISTAN: Smith said the UK has been strong in
response to the brutal suppression of protests at
Andijon, but Germany and others in the EU say the West should
listen more, engage in more dialogue, explore new discussion
mechanisms, and be less confrontational with the GOU. He
confessed to being puzzled that Germany is so keen to lift
sanctions on Uzbekistan and so confident that Tashkent is
ready to engage constructively, including on Andijon and
human rights. Welch noted Uzbekistan's charm offensive ahead
of the EU's decision on renewing
sanctions. Regarding a possible Uzbekistan resolution at the
UNGA Third Committee, he said HMG would prefer the U.S. draft
it: the UK wants to keep its fingerprints off the draft.
After the UK's high-profile role last year as the EU
President, the UK would prefer not to be isolated within
Europe as seeming to pursue a vendetta against Uzbekistan.

7. (C) Feigenbaum said the USG once had high hopes for
Uzbekistan, but President Karimov's actions suggest he
opposes the shared U.S./EU agenda of expanding markets,
greater openness, and regional economic integration.
Uzbekistan is systematically reducing the American presence
in the country. He expressed hope that the EU will maintain
its sanctions on the GOU. Washington would like the EU to
lead one country-specific UNGA resolution on Central Asia -
Uzbekistan or Turkmenistan -- and at least to co-sponsor.
Smith said the UK harbors little hope for major improvements
during Karimov's tenure. Feigenbaum added the USG remains
committed to helping the people of Uzbekistan: even now, we
provide the equivalent of ten percent of the GOU's health
budget and are vaccinating 700,000 children. Adams said U.S.
aid to Uzbekistan increased after 9/11 to $200 - 300 million
per year, but is now down to $100 million and will fall to
$20 - 25 million because the GOU is closing down the
implementing organizations. We are prohibited by law from
giving military aid, but some cooperation is continuing on
counter-narcotics and export controls, and we would spend

LONDON 00007623 003.2 OF 004

more money in Uzbekistan if the GOU did not stand in the way
(e.g., on educational reform).

8. (C) KYRGYZSTAN: Feigenbaum urged the UK to establish a
diplomatic presence in Bishkek. Hayes pointed out that DFID
is present and donor coordination is excellent under World
Bank leadership. Looking ahead to the November 2 elections
in Kyrgyzstan, Feigenbaum urged that Europe join the U.S. in
delivering parallel messages to both government and
opposition that they must avoid violence and act legally and
constitutionally. The message should be passed privately for
now, but possibly stated publicly closer to November 2,
depending on how events unfold. Welch noted that the EU's
current draft demarche focuses on the Kyrgyz government, not
the opposition, but took the point about the need to speak to
both sides.

9. (C) REGIONAL INTEGRATION: Deutsch briefed on his
activities in support of regional economic integration,
including roads, aviation and electricity, as well as USG
discussions with the International Financial Institutions and
other interested parties. A meeting co-sponsored by the USG
and Kazakhstan on the margins of the World Bank/IMF meeting
in Singapore, had discussed the subject at length, with Tajik
and Kyrgyz participation, as well as UK and other
participation; a follow-up meeting is planned at next
spring's IFI meeting. The USG sees exciting potential for
Central Asia to integrate southward without detriment to its
ties with China and Russia. Electricity transmission to
Afghanistan, Pakistan, and India seems like a natural fit:
those countries have growing needs for electricity, while
Tajikistan and Kyrgyzstan are rich in hydro-power resources;
as those resources are seasonal, oil/gas from Kazakhstan
would need to be part of the package. Ministers from
Kyrgyzstan, Tajikistan, Pakistan and Afghanistan will meet
this week in Dushanbe to sign an agreement that will allow
the World Bank and Asian Development Bank to fund a
feasibility study leading to a decision next spring on the
financial structure of the project.



10. (U) SCA DAS Evan Feigenbaum, SCA Senior Adviser Robert
Deutsch, EUR/ACE Director Tom Adams, EUR/ACE Deborah Klepp,
and Econoff (notetaker) met with DFID Head of Europe and
Central Asia Pauline Hayes and her team of Central Asian
development experts at DFID. FCO Central Asia Section Head
Mike Welch also attended.

11. (SBU) Feigenbaum and Deutsch briefed on the rationale for
Central/South Asia regional economic integration, including
the State Department's bureaucratic reorganization.

12. (SBU) Adams explained how the U.S. coordinates assistance
and described USG assistance programs and priorities. After
September 11, Adams explained, Central Asia as a whole
received approximately $600 million per year at the high
point, with half of that assistance going to Uzbekistan.
These numbers have decreased since then, with approximately
$150 million to the region in FY06. USG assistance to
Uzbekistan is down to $25 million. Adams described the
difficulties of providing assistance in Uzbekistan, where the
GOU is expelling U.S. assistance implementers. Although
Uzbekistan forced the International Republican Institute to
leave, Karimov is still allowing the National Democratic
Institute to operate because he likes the approach of its
country representative, who emphasizes the philosophy of
democracy and not Uzbek shortcomings. The USG has been
successful in getting some funds to Uzbek NGOs via the
Russian banking system.

13. (C) Adams noted that the Kyrgyz Republic is likely to
receive Millennium Challenge Threshold status at
the November 9 MCC board meeting. This would mean $15-20
million in assistance over two years to improve governance
indicators, focusing on judicial reform. The threshold
program will hopefully allow the Kyrgyz to make the reforms
necessary to apply for MCC compact status, which could
provide $300 million additional
assistance over 4-5 years, based on the programs in Georgia
and Armenia.

LONDON 00007623 004.2 OF 004

14. (C/NF) Hayes noted that in Central Asia DFID only has
bilateral programs in the Kyrgyz Republic and Tajikistan, due
to their high poverty levels. She said DFID has put in a
request to increase UK assistance there sharply in the next
3-5 years, from GBP 5.5 million in the Kyrgyz Republic and
GBP 3.5 million in Tajikistan in 2006-7 to GBP 10 million
each by 2010. DFID keys its bilateral development strategies
to the World Bank Poverty Reduction Strategy Programs
(PRSPs). To reduce duplication, the UK is coordinating
assistance and drafting a joint donors' country support
strategy with the UN, World Bank, Asian Development Bank and
the Swiss. Germany, her staff added, declined to participate
in the joint donor strategy process because it wants to
explore a regional approach. Hayes commented that DFID might
consider working in Turkmenistan if the GOT changes its
policies, but cautioned that DFID is trying to reduce the
number of its programs overall.

15. (C/NF) To inform the joint donor strategy, DFID
commissioned a restricted-distribution report on "drivers of
change" in the Kyrgyz Republic drafted by a knowledgeable
expatriate not part of HMG. The surprising findings were:
(1) donors need to work more strongly outside the government,
such as media and civil society; and (2) donors need to
engage more broadly and communicate what they are doing, as
there is the perception that some donors (especially the
World Bank) are too close to the government. DFID agreed to
share the report in confidence with EUR/ACE and said they
would like to do a similar report for Tajikistan in the
December-January timeframe.

16. (U) DAS Feigenbaum cleared this message.

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