EBRD DELEGATION CONSIDERS GREATER ENGAGEMENT IN

C O N F I D E N T I A L ASHGABAT 001305 SIPDIS SIPDIS STATE FOR SCA/CEN, EEB, IO TREASURY FOR JEFFERY BAKER E.O. 12958: DECL: 11/30/2017 TAGS: ECON EFIN PGOV PHUM PREL TX SUBJECT: EBRD DELEGATION CONSIDERS GREATER ENGAGEMENT IN TURKMENISTAN REF: ASHGABAT 1230 Classified By: Charge Sylvia Reed Curran for reasons 1.4 (B) and (D). ¶1. (SBU) SUMMARY: A high-level EBRD delegation visited Turkmenistan to evaluate if there has been progress on reforms since President Berdimuhamedov took office in February. Delegation members wanted, in particular, to evaluate the status of human rights in Turkmenistan. In the next five to six months, pending board approval, the EBRD team will write a new country strategy. EBRD envisions coordinating technical assistance with donors in Turkmenistan and would want to work with the U.S. Goverenment, including the Department of the Treasury, on such projects. The last piece of the puzzle: is Turkmenistan ready to accept the help? END SUMMARY. EBRD SENDS HIGH LEVEL DELEGATION TO ASSESS REFORMS ¶2. (SBU) A delegation from the European Bank of Reconstruction and Development (EBRD) comprised of the following individuals met with the Charge on November 29: Olivier Descamps, Business Group Director, Southern and Eastern Europe, Caucasus and Central Asia; Mahir Babayev, Senior Counsellor; Heike Harmagart, Economist, Office of the Chief Economist; and Masaru Honma, Director, Central Asia. EBRD's Resident Office Head Tony Myron also attended. Descamps said EBRD's process of increasing support to Turkmenistan's private sector and financial sector includes accounting for real progress in human rights and economic reform. Using its findings from this trip, the delegation will write a report for its board and -- pending board approval -- will write a new country strategy in the next five to six months. He said the plan is to increase EBRD's engagemnt with Turkmenistan. LET'S WORK TOGETHER TO COORDINATE TECHNICAL ASSISTANCE ¶3. (C) Descamps emphasized the need to coordinate donor efforts in the economic and financial sectors and suggested that EBRD could coordinate technical assistance with other interested donors, including the United States. Descamps acknowledged the difficulty of getting Turkmenistan to move away from its "state-owned" mindset and mentioned the textile industry as a potential starting point for privatization projects. He expressed interest in working with the U.S. Department of the Treasury on a strategy to help Turkmenistan's banking industry cope with the potential shock of a unified exchange rate. EBRD is concerned, he said, with the lack of budget transparency. HUMAN RIGHTS: STILL OF CONCERN ¶4. (C) Referencing EBRD's charter, Deschamps said that human rights is a consideration in assessing future steps. Human rights areas of concern for the group include freedom of movement, the restrictive visa and registration regime and whether child labor was still being used in the agricultural industry. He noted that the delegation was impressed with Director of the Institute of Democracy and Human Rights Shirin Akhmedova, specifically mentioning her frankness. 5 (SBU) COMMENT: The EBRD delegation supports greater engagement. EBRD is willing to devote what could be valuable technical assistance in order to make a real impact. Turkmenistan's government now needs to send a clear signal that it is willing to let western countries start providing technical assistance in the economic sphere. END COMMENT. CURRAN