UNCLAS SECTION 01 OF 02 ASHGABAT 001345

SIPDIS

SENSITIVE
SIPDIS

STATE FOR SCA/CEN

E.O. 12958: N/A
TAGS: PGOV PREL ECON ETRD TU TX
SUBJECT: TURKISH PRESIDENT GUL WOOS TURKMEN LEADERSHIP ON
FURTHER ECONOMIC COOPERATION

REF: ANKARA 2921


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


2. (SBU) SUMMARY: The government of Turkmenistan hosted a
highly-politicized December 6-8 official visit by Turkish
President Abdullah Gul, who is the first Turkish president to
visit here in seven years. President Gul arrived with his
ministers of State, Energy and Trade, and a cadre of Turkish
business representatives. He met with President
Berdimuhamedov, participated in a bilateral business forum,
and inaugurated a new power plant in Dashoguz. The primary
focus of the visit was to strengthen and expand the economic
relationship, with energy as a centerpiece, but overall,it
was obvious that each side had something to sell, and took
the opportunity to advertise. END SUMMARY.


3. (U) On December 6, the two presidents met alone. Local
and Turkish press indicated that energy was a dominant theme.
Gul reportedly proposed the construction of a 16 bcm per
year pipeline from Turkmenistan through Iran to Turkey
(reftel), as well as a joint venture to engage in oil and gas
field operations here. Based on a suggestion made by
Berdimuhamedov a while back, the two presidents also signed
an intergovernmental agreement on creating a joint economic
commission to further enhance the business partnership
between the countries. During the visit, the Turkmen
government also took the opportunity to pressure Turkish
business leaders to "take an active part" in making
Berdimuhamedov's Avaza Caspian free tourism zone project a
reality.


4. (SBU) During a press conference, Berdimuhamedov noted
with satisfaction that trade volume between the two countries
was a respectable 1.12 billion dollars in the first ten
months of 2007. He also mentioned that about one third of
the foreign companies registered to operate in Turkmenistan
are Turkish, numbering more than 400. (NOTE: Many Turkish
companies have been operating here for some time and have
learned how to manage--and probably even to benefit from--the
corruption and bureaucratic complexities of doing business
here. END NOTE.) The same day, Gul spotlighted one Turkish
construction company, ERKU, when he officiated at the opening
ceremony of the new Turkish diplomatic staff residence.
According to local reports, the company doubled its work
force at the former hotel site in Berzengi in order to finish
the work before Gul's visit.


5. (U) On December 7, the two presidents traveled to
Dashoguz and cut the ribbon on a new 120 million dollar power
plant, which was built by Chalik Energy Group and equipped
with two General Electric gas turbine generators. The plant
is expected to produce 1.5 million kilowatt hours of energy
per year, the majority of which should be available for
export, according to local press. At the request of the
Turkish president, they also visited Konye Urgench, a UNESCO
world heritage site, and said prayers together in the
Najmeddin Kubra Mausoleum holy site. They then sat down
together for a sacrificial meal. President Gul mentioned
that the government of Turkey would soon build a mosque in
Dashoguz, similar to the impressive Blue Mosque replica the
Turkish government built in Ashgabat years before.


6. (SBU) COMMENT: It is no secret that the Turkish
business community is a force to be reckoned with here, given
its dominant role in construction projects all over the
country, and the Turkish government has been angling for some
time for this visit. During Gul's stay, the government of
Turkmenistan showed that it wants to expand the role of
Turkish commercial activity, but what is less clear is
whether government entities enjoy a partnership that advances
national socio-economic development, or one that benefits a
very few in the government hierarchy. Given Turkey's

ASHGABAT 00001345 002 OF 002


surprise proposal to build a big new mosque in Dashoguz,
Turkmenistan appears, for now, to be getting what it wants
from the relationship. Likewise, significant Turkish
commitment to projects in Avaza, in which other international
businesses are hesitating to participate, would be a sign
that Turkey wants to continue this mutually beneficial
economic relationship on a rising scale. END COMMENT.

CURRAN