TURKMENISTAN: DONORS COMPARE NOTES

UNCLAS SECTION 01 OF 02 ASHGABAT 000762 SIPDIS SENSITIVE SIPDIS STATE FOR SCA/CEN, EUR/RUS, EUR/CARC, EEB E.O. 12958: N/A TAGS: PGOV PREL EAID TX SUBJECT: TURKMENISTAN: DONORS COMPARE NOTES REF: A. ASHGABAT 755 ¶B. ASHGABAT 757 ASHGABAT 00000762 001.2 OF 002 ¶1. (U) Sensitive but unclassified. Not for public Internet. ¶2. (SBU) SUMMARY: USAID Deputy Assistant Administrator Drew Luten met on July 24 with representatives of the Asian Development Bank (ADB),UNDP, World Bank (WB) and EU/TACIS. All agreed that working assistance programs remains a challenge in Turkmenistan, where lack of human capacity and past practices still handicap projects. Although the government now welcomes assistance, the top-down decision-making continues to result in substantial delays and -- occasionally -- in abrupt about-faces on programs. Given the government's growing tendency to ask for the same types of assistance from more than one source, donor coordination is necessary to avoid duplication of efforts. END SUMMARY. EXPERIENCES VARY, BUT SIGNIFICANT DELAY IS COMMON ¶3. (SBU) UNDP Deputy Resident Representative Inita Paulovica summarized the government of Turkmenistan's relations with donors as "cautious." She stated that the government seems to be unclear about what needs to be done, and that previous reform was sometimes done quickly and not very effectively. Although UNDP received a request from the Ministry of Foreign Affairs (MFA) on February 14 to work in economic reform -- analysis and forecasting, training, accounting standards, and management of state property -- the government is still in the process of identifying a strategy. In principle, she said, the government never turns down offers of cooperation -- it just doesn't respond. UNDP is also in the beginning stages of working on a local-level governance program directly with the parliament that has so far been well received. This project includes services, participation, central/regional coordination, and rural development. Currently, UNDP is negotiating the placement of an economic adviser in the Ministry of Economics and Finance (MOEF). ¶4. (SBU) About current donor coordination, Paulovica said the international assistance community holds UNDP-coordinated meetings more or less regularly. UNDP currently is negotiating with Foreign Minister Rashit Meredov about Government of Turkmenistan involvement in these meetings. LITTLE PROGRESS YET ON EDUCATION AND INTERNET ; ¶5. (SBU) Paulovica questioned the government's real commitment to educational reform. Closely related to education is Internet policy, on which the government has yet to take steps. The Government is in dialogue with China for new Internet infrastructure, and the basis of a good fiber optic network already exists. Increasing Internet connectivity will require a large investment, but "they have to invest in themselves," noted EU-TACIS Adviser Michael Wilson. EU/TACIS COOPERATION ¶6. (SBU) Wilson stated that EU-TACIS policy is driven by its member states and the citizens of the EU, who emphasize improving the lives and well-being of average citizens. In Wilson's experience, the Government of Turkmenistan is not willing to be engaged on environmental issues. However, Berdimuhamedov seems to be somewhat aware of climate change and its relation to other issues like global finance. ¶7. (SBU) EU/TACIS has direct contacts with the Ministry of Economy and Finance (MOEF),where it is working on a new program in public finance management. The goal is to improve standardization and accountability in the first phase. In other areas, EU/TACIS is working on a human-rights awareness campaign, and a legal-reform project. ASHGABAT 00000762 002 OF 002 THE MAJOR IFI'S ¶8. (SBU) World Bank Operations Analyst Oraz Sultanov said that bank activity in Turkmenistan is hampered by several significant factors: the government refuses to sign the WB-required "negative pledge clause," refuses to borrow, and refuses to pay for advice as well. The government is interested in health finance, but won't supply data necessary to make an analysis. Sultanov said that the State Statistics Institute funded a survey on Small and Medium Enterprises (SME's),but he does not understand the survey's purpose, given the very limited SME activity in Turkmenistan. On the positive side, the government has started providing data on external debt. ¶9. (SBU) Asian Development Bank Liaison Officer Aina Kekilova explained that a program in land management is the only project that the ADB is currently able to undertake. Turkmenistan remains reluctant to borrow, and the Ministry of Healthcare and Medical Industry has yet to respond to ADB attempts to engage the government on AIDS issues. ADB's hands are also tied by the government's refusal to sign an ADB-required "no objection letter." In another instance, government representatives say that they prepared a letter to join the program, but ADB never received it. ¶10. (SBU) Kekilova plans a workshop on ADB procedures for Turkmen government agencies in October. The government will also participate in a transportation seminar. Kekilova commented the government is "always happy to receive proposals, but doesn't go anywhere after that." Luten suggested that the donor partners coordinate work on reaching international accounting standards, adding that the Central Bank had seemed genuinely interested in this topic during a meeting earlier in the day (ref b). ¶11. (SBU) COMMENT: The U.S. government is not the only donor facing challenges in working with Turkmenistan. Indeed, among the organizations represented at the lunch, USAID ranks among the more successful. Donor coordination remains essential if the international community is to make a true dent in the long list of areas where program cooperation is needed. END COMMENT. ¶12. (U) DAA Luten did not have an opportunity to clear this cable. HOAGLAND