NAZERBAYEV'S VISIT TO LATVIA

C O N F I D E N T I A L SECTION 01 OF 02 RIGA 000577

SIPDIS

SIPDIS

E.O. 12958: DECL: 07/21/2016
TAGS: PREL ENRG ECON OSCE RU KZ LG
SUBJECT: NAZERBAYEV'S VISIT TO LATVIA


Classified By: Ambassador Catherine Todd Bailey. Reason: 1.4(D)


1. (C) Summary: The visit to Latvia by Kazakh President
Nazerbayev was mainly focused on building economic ties
between the two countries. The Kazakhs already have a heavy
investment in a grain port in Latvia and would like to use
the oil terminal at Ventspils to ship their oil. The two
countries would also like to work with China to create a land
line to move Chinese goods to market. Both of these ideas,
though, require transit through Russia, which is far from
assured. Latvia committed to support Kazakhstan's bid to be
OSCE CIO in 2009, but tied it to fulfillment of OSCE
standards, potentially allowing them a way out. The Latvians
were very pleased that Nazerbayev visited the occupation
museum as well. End summary.


2. (U) President of Kazakhstan, Nursultan Nazerbayev, visited
Latvia July 17 ) 18. The joint declaration signed with
Latvian president Vaira Vike-Freiberga, can be found in
English at
www.president.lv/pk/content?cat id=603&art id=9806&lng=en.
Pol/econ chief met with MFA A/S level official for Russia and
the former Soviet States Vilmers Henins and the President's
foreign policy advisor Janis Mazeiks on July 19 for a readout
on the visit.


3. (C) Economic ties were at the top of the agenda.
Nazerbayev brought his ministers for transport, energy and
economics along on the trip. The post-visit press headlines
focused on Kazakhstan's desire to buy the Latvian
government's shares of Ventspils Nafta, the company that
controls the oil terminal at the port of Ventspils, when it
is privatized. Kazakhstan would like to use the pipelines
that end in Venstpils to move its oil to market and Latvia
would welcome the return of this business lost when the
Russians stopped oil shipments to Ventspils several years
ago. Unfortunately, Nazerbayev stated publicly that he
expected Kazakh bidders would receive preferential treatment
in the bidding, leaving Latvian economic minister Stokenbergs
to quickly clarify that the government's shares would be sold
to the highest bidder. The two leaders also discussed a
project to build rail links from China, through Kazakhstan,
to Latvia to provide a route for Chinese goods to European
and North American markets. Both these proposed transit
routes go through Russia, and it is not at all clear Moscow
will approve these projects. Mazeiks said that the Latvians
will let Nazerbayev take the lead in talking to the Russians,
given the much better state of his relations with Moscow.


4. (U) The original plan for the state visit had included a
visit to Ventspils, not only to see the oil terminal, but
also to look at a joint Latvian-Kazakh enterprise grain
terminal for shipping central and eastern European grain to
market. However, disputes over port fees and supply chain
problems have kept the terminal from operating anywhere near
its capacity, so the trip was scrubbed from the schedule.
Instead, Nazerbayev attended the laying of a cornerstone for
a Kazakh-owned hotel to be built in Riga.


5. (C) The main political development from the visit was
agreement in principle by Latvia to support Kazakhstan for
OSCE Chairman in Office in 2009. The statement language on
this is very carefully crafted, with Latvia agreeing to a
Kazakh invitation to support the bid, but noting the CIO's
"special responsibility for implementation of OSCE standards
and principles." Mazeiks termed it a "qualified yes" while
Henins said that Vike-Freiberga was clear in a tete-a-tete
with Nazerbayev that he needed to implement further reforms
at home. Both suggested that Latvia would be willing to drop
their support if the human rights and democracy situation in
Kazakhstan deteriorated.


6. (U) The leaders also discussed educational exchanges.
Nazerbayev was especially interested in getting Kazakh
students to the Riga Business School, which was originally a
USAID-funded project and operates in affiliation with
SUNY-Buffalo.


7. (C) The Latvians were especially pleased that Nazerbayev
agreed to visit the Occupation Museum, which chronicles
Latvia's struggles under Nazi and Soviet rule. According to
another source on President Vike-Freiberga's staff,
Nazerbayev overruled his staff, who cautioned against
upsetting Moscow, to visit the museum.


8. (C) Comment: The Latvians are genuinely pleased with the
visit, which they feel really cemented economic ties between
the two countries. While a bit uncomfortable with his
political record, they are swallowing that in hopes of
getting the economic deals. The key, though, will be the
Russian reaction. The Latvians hope Nazerbayev can carry the

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water in Moscow to get the necessary transit rights.
Bailey