TURKMENISTAN: CHALIK RECONCILED BUT DRAWS DOWN;

C O N F I D E N T I A L SECTION 01 OF 02 ASHGABAT 001398

SIPDIS

SIPDIS

STATE FOR SCA/CEN, EEB, INR/B

E.O. 12958: DECL: 12/27/2017
TAGS: PGOV PINR ECON SOCI TK TX
SUBJECT: TURKMENISTAN: CHALIK RECONCILED BUT DRAWS DOWN;
BERDIMUHAMEDOV DESCRIBED AS AN ILL-SERVED REFORMER

REF: A. ASHGABAT 1345

B. ASHGABAT 1126

C. ASHGABAT 1014

ASHGABAT 00001398 001.2 OF 002


Classified By: CHARGE RICHARD E. HOAGLAND FOR REASONS 1.2 (B),(D)


1. (C) SUMMARY: During Turkish President Gul's recent visit
to Turkmenistan, President Berdimuhamedov and Turkish
businessman Ahmet Chalik reconciled, and Chalik will finance
and build a major mosque near Dashoguz. Chalik will maintain
his energy interests in Turkmenistan but is mostly
withdrawing from the construction business. Chalik's senior
representative in Turkmenistan described President
Berdimuhamedov, whom he has know for 10 years, as a reformer
at heart who is ill-served by inexperienced officials who are
still mostly trapped in the mindset of the Niyazov era. END
SUMMARY.


2. (C) Charge met December 27 with Aziz Chengal (protect
throughout),senior representative of Chalik Group in
Turkmenistan. A front-page photograph in the December 26
"Neutral Turkmenistan" featured President Gurbanguly
Berdimuhamedov meeting with Ahmet Chalik, Chairman of the
Chalik Group, once a long-time favorite of former President
Saparmurat Niyazov but more recently nearly persona non grata
in Turkmenistan. Under Niyazov, Chalik had established
Chalik Textiles, Chalik Energy, and Chalik Construction/GAP
Insaat. Chalik was a close confidante of Niyazov who at one
time named him Deputy Minister of Textiles and conferred
Turkmenistani citizenship on him. However, under
Berdimuhamedov Chalik lost insider status and his business
affairs became turbulent (refs B, C).

RECONCILLIATION AND THE GIFT OF A MOSQUE


3. (C) During Turkish President Gul's December 6-8 visit to
Turkmenistan (ref A),Berdimuhamedov and Chalik reconciled.
Chalik is personally and politically close to both President
Gul and Prime Minister Erdogan. Chalik accompanied Gul and
Berdimuhamedov to the northern city of Dashoguz, where Gul
asked Berdimuhamedov to pray with him at the nearby Najmeddin
Kubra Mausoleum, a UNESCO World Heritage Site that is visited
by Muslim pilgrims from throughout the greater region seeking
miracles. Gul announced Turkey would build a grand new
mosque at the site, designed by famed Turkish architect Hilmi
Senalp, that will accommodate 1,000 inside and 3,000 in the
courtyard. The new complex will also include a conference
center and guesthouse for scholars and a pavilion to seat
1,000 for religious meals. Chalik will build the complex,
and will personally fund the construction of the mosque "as
an act of piety," according to Chengal.

BUT ENOUGH IS ENOUGH


4. (C) Despite the Berdimuhamedov-Chalik reconciliation that
Gul reportedly facilitated, Chengal said Chalik has decided
it's time to move on, primarily because it is impossible to
do business according to international standards in
Turkmenistan. Chengal said the Chalik Group will continue
stay as involved as possible in energy in Turkmenistan, will
maintain but not grow its textile interests, but will mostly
phase out its construction business. It will no longer bid
on construction tenders but will "respond only when invited."
According to Chengal, Chalik is turning his business
attention more and more to Turkey, where he just bought a
share of a major media group for $1.1 billion, and to the
Gulf, where Chengal will open a new Chalik Group Corporate
Headquarters in Abu Dhabi in January, hoping to get in on Abu
Dhabi's $10 billion infrastructure spurt. Chalik is also

ASHGABAT 00001398 002.2 OF 002


increasingly looking for investment opportunities in Israel.


5. (C) During a long dinner in Istanbul September 19, Chalik
told Charge he believed Russia was largely responsible for
trying to force him out of Turkmenistan in favor of Russian
companies. In fact, Chengal said, the problem was with other
Turkish companies that wanted to increase their share in
Turkmenistan's market that Chalik had dominated under Niyazov
and started a whispering campaign against Chalik. Chengal
said he and a team of 20 Turkish and Turkmen lawyers worked
three months -- mainly with the Ministry of Construction and
the State Customs Service and finally with Deputy Prime
Minister Nazarguly Shaguliyev, drawing on the company's
documentary archives, to restore the Chalik Group's
reputation.

BERDIMUHAMEDOV: AN ILL-SERVED REFORMER


6. (C) Chengal praised Berdimuhamedov, whom he has known for
10 years, as "someone who can change his mind." He described
Berdimuhamedov as a reformer at heart, extremely
detail-oriented, a perfectionist with a quick temper, but who
doesn't hold a grudge after minor flare-ups.


7. (C) Chengal lamented that Berdimuhamedov is not well
served. Chengal recounted he was recently in a meeting with
the president when he contradicted one of the president's
comments. One of Berdimuhamedov's advisers reportedly barked
at him to leave the room, but the president said, "He can
stay. I make comments, but I want expert advice. You should
be more like him." Chengal added, "This is Berdimuhamedov's
greatest problem. Hardly anyone here is qualified to give
him sound advice because their mindset is still where it was
15 years ago." That's why, Chengal said, Deputy Prime
Minister/Foreign Minister Rashit Meredov has now become one
of Berdimuhamedov's closest advisers: "At least he has a
degree of international experience and isn't afraid to grab
his opportunity."


8. (C) Chengal said Berdimuhamedov wants highly detailed
proposals that will lead to concrete quick results. "He
thinks there are probably 10 steps to get to the goal when,
in fact, there are probably 100." He glances at proposals
submitted to him, but then turns them back to his
presidential staff and to appropriate ministries for detailed
analysis and final recommendation. "But the system is
log-jammed," Chengal said, "because almost no one has the
appropriate analytical skills, and, even more important,
because almost everyone is still afraid, remembering the
Niyazov era, to make decisions for fear they will be wrong
decisions that will lead to personal disaster." (NOTE: We
would also add that the cultural tradition of telling the
boss only what he wants to hear is powerfully strong here.
END NOTE.)


9. (C) COMMENT: We have little doubt Chengal painted the
most positive picture of Chalik's travails in Turkmenistan,
but it's clear there has been a Berdimuhamedov-Chalik
reconciliation. Chengal's description of Berdimuhamedov and
how his government operates -- or doesn't -- rings true to
us. END COMMENT.
HOAGLAND