Identifier
Created
Classification
Origin
07ASHGABAT1221
2007-11-09 07:17:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Ashgabat
Cable title:  

ADB IN TURKMENISTAN: OUT OF TOUCH BUT LOOKING FOR

Tags:  PREL EPET EAID EFIN EINV TX 
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UNCLAS SECTION 01 OF 02 ASHGABAT 001221 

SIPDIS

SENSITIVE
SIPDIS

STATE FOR SCA/CEN, EEB
PLEASE PASS TO USTDA DAN STEIN
ENERGY FOR EKIMOFF/THOMPSON

E.O. 12958: N/A
TAGS: PREL EPET EAID EFIN EINV TX
SUBJECT: ADB IN TURKMENISTAN: OUT OF TOUCH BUT LOOKING FOR
A NEW MISSION


UNCLAS SECTION 01 OF 02 ASHGABAT 001221

SIPDIS

SENSITIVE
SIPDIS

STATE FOR SCA/CEN, EEB
PLEASE PASS TO USTDA DAN STEIN
ENERGY FOR EKIMOFF/THOMPSON

E.O. 12958: N/A
TAGS: PREL EPET EAID EFIN EINV TX
SUBJECT: ADB IN TURKMENISTAN: OUT OF TOUCH BUT LOOKING FOR
A NEW MISSION



1. (U) Sensitive but unclassified. Not for public Internet.


2. (SBU) SUMMARY: The Asian Development Bank (ADB),long
dormant in Ashgabat, especially after the Government of
Turkmenistan failed to respond decisively to the bank's
initial feasibility study for a
Turkmenistan-Afghanistan-Pakistan (TAP) pipeline, is seeking
to revive its mission in Turkmenistan. ADB officials told
the Charge in a November 8 meeting that they want to expand
their operations in Turkmenistan, and to that end are
currently conducting a seminar on ADB operating policies and
procedures in order to promote closer ties with government
officials. However, ADB personnel so far seem ill-informed
about the country they are proposing to assist. END SUMMARY.

ADB ORGANIZES SEMINAR ON OPERATIONAL POLICIES AND PROCEDURES


3. (SBU) In a November 8 meeting with the Charge, Asian
Development Bank (ADB) Country Economist Xuelin Liu and Head
of ADB's Central Asia Regional Economic Cooperation Unit
(CAREC) Craig Steffensen said they are conducting a seminar
on ADB operating policies and procedures for Turkmenistani
government officials. ADB had originally hoped for a
three-day, high-level seminar, but scaled it back after a
tepid response from the government. The seminar, hosted by
the Central Bank and primarily attended by heads of
departments across all ministries, covers project preparation
instructions and provides an overview of CAREC. Although
Turkmenistan joined ADB in August 2000, ADB has not provided
loans for any major projects and has provided only very
limited technical assistance in recent years. Following
President Niyazov's death, however, ADB decided to explore
new development project opportunities.

TURKMENISTAN-AFGHANISTAN-PAKISTAN PIPELINE: NO ACTION


4. (SBU) Liu said that ADB has carried out two feasibility
studies for a Turkmenistan-Afghanistan-Pakistan (TAP)
pipeline, as well as a market research project. However, to
date, Turkmenistan has not given a green light to move

forward with the TAP (now the TAPI, given India's inclusion
in the project). She expressed some frustration that
"sometimes the government gives no response...to suggested
dates." ADB is "pushing hard for a contract," but Liu and
her colleagues have the impression that TAP is at the bottom
of Turkmenistan's list of pipeline priorities, following the
Caspian littoral pipeline to Russia, the China project, and
notional interest in a Trans-Caspian pipeline.


5. (SBU) Liu was quite surprised to hear about the expanded
Turkmenistan International Oil and Gas Exhibition (TIOGE)
that will take place November 13-15. She said that because
it was not important in the past, ADB had not planned to
attend this year, but she would like to attend if possible.
(NOTE: Currently, over 3,000 people have registered to
attend TIOGE, and conference organizers have taken names for
a waiting list for weeks. At this point, there is no
possibility for anyone new to register for the conference.
END NOTE.)

ADB SAYS CENTRAL BANK IS LOOKING FOR LOANS


6. (SBU) Steffensen said the Central Bank is considering
borrowing around $1 billion from an international financial
institution to build hospitals and schools. If Turkmenistan
agrees to enter into lending programs with ADB, Steffensen
said that, from ADB's perspective, transportation and energy
are the most likely sectors for loans. Previous to January,
Turkmenistan did not participate in CAREC meetings, but since

ASHGABAT 00001221 002 OF 002


President Niyazov's death, Turkmenistan has attended all
CAREC meetings. Steffensen asked that the Embassy mention
CAREC in its meetings with officials, adding that other
countries in the region want Turkmenistan to join. The
Charge explained that Turkmenistan does not so far join
regional organizations and is not likely to join CAREC
because regional powers would then pressure Turkmenistan to
join other organizations, like CSTO AND SCO, threatening
their policy of neutrality.


7. (SBU) COMMENT: Liu's underestimation of the importance
of TIOGE -- and hence the changing landscape of the oil and
gas sector -- as well as Steffensen's misunderstanding about
Turkmenistan's reticence to join CAREC suggest a surprising
lack of knowledge about today's Turkmenistan. ADB maintains
a locally staffed office in Ashgabat but does not have a
resident representative.


8. (SBU) COMMENT CONTINUED: The report that Central Bank
Chairman Abilov is interested in a $1 billion loan for
schools and hospitals is consistent with November 2 comments
of European Bank for Reconstruction and Development Resident
Office Head Tony Myron, although Myron quoted a figure of $2
billion. Myron posited that Abilov might feel that he needs
to keep a certain amount of funds in reserve since many
ministries are pressuring him to fund projects, "especially
the Ministry of Textiles." And it should not be forgotten
that Berdimuhamedov has pledged $1 to his pet project, the
Avaza tourist zone on the Caspian coast. It's clear better
coordination and information sharing among multilateral
lenders is needed. END COMMENT.
HOAGLAND