TURKMENISTAN/CIS SUMMIT: BERDIMUHAMEDOV PUSHES

UNCLAS SECTION 01 OF 02 ASHGABAT 001296

SIPDIS

SIPDIS

STATE FOR SCA/CEN, EUR/RUS, EEB

E.O. 12958: N/A
TAGS: PREL PGOV ECON TX CIS
SUBJECT: TURKMENISTAN/CIS SUMMIT: BERDIMUHAMEDOV PUSHES
FOR INCREASED TRADE, INVESTMENT AND TRANSPORT TIES

REF: ASHGABAT 1186


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


2. (SBU) SUMMARY: For the first time in nearly 15 years,
Turkmenistan hosted the November 22 CIS Heads of Government
summit. Although many may have been hoping that President
Berdimuhamedov would agree to more active participation in
the grouping, the president made clear that his real interest
-- as in his other foreign outreach efforts -- was in
promoting stronger economic, trade and investment ties. The
group considered 30 issues, many of which had been raised
previously at the CIS Heads of State summit in Dushanbe in
October, and trumpeted a purported move toward "greater
integration" (which was, however, unsupported by any concrete
steps). Overshadowing the news of the CIS meeting for many
was the news that Berdimuhamedov had agreed during a
bilateral meeting with Russia's Prime Minister Zubkov to move
forward with construction of a Caspian littoral pipeline and
will sign a contract to that end by the end of the year. END
SUMMARY.


3. (SBU) This was the first time Turkmenistan has hosted a
meeting of the Commonwealth of Independent States (CIS) in
nearly 15 years. Government contacts have told us that they
have been preparing for the November 22 CIS Heads of
Government summit for days. President Berdimuhamedov first
offered an opening briefing at the Presidential Palace in
which he outlined Turkmenistan's most recent accomplishments
and cooperation priorities. Later, he made the opening
speech at the CIS summit, held at the Ruhyet Palace. On the
fringes, he had bilateral meetings with the heads of
government of Russia, Ukraine, Kazakhstan, Azerbaijan and
other CIS countries. Following the conclusion of the one-day
event, Russia's Prime Minister Viktor Zubkov stayed on for an
additional day of bilateral meetings, which included Gazprom
CEO Alexei Miller (septel).

INCREASING THE CAPACITY OF THE CASPIAN LITTORAL PIPELINE


4. (U) At the Presidential Palace, President Berdimuhamedov
spoke generally about Turkmenistan's development goals and
its priorities for foreign cooperation, including with other
CIS countries. In a speech that introduced many of the same
elements he later expanded on at the Ruhyet Palace, he
discussed his efforts to improve Turkmenistan's economy and
education system. He also briefly raised gas and oil, noting
that Turkmenistan, Kazakhstan and Russia are working to
increase the capacity of the Caspian littoral and the Central
Asia-Center IV (CAC-IV) pipelines. The Caspian littoral
pipeline's capacity will be increased to 20 billion cubic
meters of gas per year, he said. Ukrainian Prime Minister
Yanukovich, who chaired the subsequent CIS summit, later
expressed Ukraine's readiness to participate in the
pipeline's construction.

COOPERATION PRIORITIES: TRADE, INVESTMENT AND TRANSPORTATION


5. (U) In his opening speech to CIS heads of government at
the Ruhyet Palace, President Berdimuhamedov focused almost
exclusively on outlining Turkmenistan's CIS cooperation
priorities: economic development, increased trade and
expanded transportation ties. Berdimuhamedov hyped his
proposed Kazakhstan-to-Iran transportation corridor and a
proposal to strengthen shipping lanes between the Caspian
ports of Turkmenbashy, Astrakhan and Aktay as initiatives
that could greatly speed up the transportation of freight
both north-to-south and east-to-west. There could also be
greater cooperation in investment, including in the
hydrocarbons, energy, construction, transport and tourism and
recreation spheres. Berdimuhamedov raised Turkmenistan's
Awaza resort development program on the Caspian Sea, urging
companies from the CIS region to participate in a December 3
project presentation event in Turkmenbashy City. The

ASHGABAT 00001296 002 OF 002


president also noted the importance of expanding CIS
cooperation in the areas of culture and education.

CONCRETE RESULTS: GREATER INTEGRATION?


6. (U) Under Yanukovich's leadership, the summit agenda
reportedly included 30 issues, many of which had been
previously raised during the October 2007 CIS Heads of State
summit in Dushanbe. Topics included transportation, customs,
finance, energy, military cooperation, and social and
cultural issues. Participants signed a number of documents,
including on standards, metrology and certification, and
customs procedures harmonization for electrical energy
transmissions. (Notably, there was no agreement signed on
either the Caspian littoral or CAC-IV pipelines.) The heads
of government agreed to set up a group to work out strategies
for developing food markets, discussed the development of
distance learning in the CIS, agreed to declare 2008 as the
Year of Literature and Reading in the CIS, and decided to
hold the next Heads of Government summit in Minsk in May

2008. Although the media played up a purported agreement to
promote integration processes within the CIS and a desire to
strengthen comprehensive cooperation while taking into
account the national interests of CIS countries, there was no
evidence that this last element resulted in any concrete
steps forward. CIS Director Lebedev also reportedly spoke in
a general way about wanting to see Turkmenistan increase its
role in the organization, but there is no indication that
President Berdimuhamedov followed up on this invitation.

GAS NEGOTIATIONS ON THE SIDELINES


7. (SBU) At the same time as the CIS summit was taking place
at the Ruhyet Palace, Turkmenistan's Ministry of Foreign
Affairs was carrying out negotiations focused on delimitation
with part of the Azeri delegation. There has been no word
about concrete results from those negotiations. In a private
meeting with poloff, Ukrainian First Secretary Igor Roman
offered the opinion that the Turkmen side does not want to
participate in a Trans-Caspian pipeline project until full
delimitation is achieved, and is thus leaning in the near
term toward the littoral pipeline project. He added that
while Ukrainian companies are ready and willing to help with
the construction, Ukraine and Turkmenistan still have
significant business disputes they have to work out before
new contracts can be undertaken here (reftel). The day after
the summit, Russian Prime Minister and Gazprom CEO Alexei
Miller met with Berdimuhamedov, and the Russian media has
been trumpeting Berdimuhamedov's purported agreement to
launch construction of the Caspian littoral pipeline project
ahead of the projected late-2008 schedule (septel).


8. (SBU) COMMENT: With President Berdimuhamedov's new
definition of Turkmenistan's neutrality policy, he has sought
a balance that promotes increased economic, trade and
transportation ties, while eschewing greater engagement in
certain multilateral political fora and on a military level.
As he gets more enmeshed with the CIS -- and with the
competing gas interests in the region, most of whom view
increasing export options for Turkmenistan's gas as a
zero-sum game -- Berdimuhamedov may find that trying to
maintain that balance may cause increasing friction with the
country's traditional trading partner, Russia.
CURRAN