TURKMENISTAN: BERDIMUHAMEDOV SAYS HE WANTS U.S.

UNCLAS SECTION 01 OF 03 ASHGABAT 000866

SIPDIS

SENSITIVE
SIPDIS

STATE FOR SCA/CEN, EUR/ACE, EEB, ECA

E.O. 12958: N/A
TAGS: PGOV PREL ECON EPET SNAR SCUL IR TX
SUBJECT: TURKMENISTAN: BERDIMUHAMEDOV SAYS HE WANTS U.S.
ECONOMIC MODEL, MORE EXCHANGES



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


2. (SBU) SUMMARY: During his meeting with EEB A/S Sullivan,
President Berdimuhamedov

-- expressed thanks to Secretary Rice for her attention to
Turkmenistan and the region, particularly regarding her
vision of Central/South Asia economic integration and a &new
Silk Road;8

-- repeatedly expressed his keen interest in finding concrete
ways to develop the U.S. economic model in Turkmenistan;

-- vowed new attention to and openness about Turkmenistan's
narcotics problem;

-- accepted Energy Secretary Bodman's invitation for
Turkmenistan senior gas and oil officials to travel to
Washington and Houston at the end of September;

-- recognized the importance of diversifying energy export
routes, specifically mentioning the Western Caspian route; and

-- made a plea for more educational and professional
exchanges.

A/S Sullivan highlighted the need for

-- regional integration, or a &new Silk Road;8

-- broader economic cooperation, including an improvement in
the investment climate;

-- energy sector cooperation, including trans-Caspian export
options; and

-- undertaking economic reforms in order to spread prosperity
within Turkmenistan and integrate with the global economy.

We were struck by Berdimuhamedov's repeated insistence he
wants to learn from the American experience, especially
focusing on new economic models for Turkmenistan and call for
expanded exchange programs. It is significant he met with
Sullivan on the same day Iranian President Ahmedinejad
arrived for a two-day visit and that the Sullivan visit
received about the same amount of coverage in state-run print
and TV as did the Ahmedinejad visit. END SUMMARY.


3. (SBU) EEB Assistant Secretary Daniel Sullivan met with
President Gurbanguly Berdimuhamedov for 75 minutes on August

14. Charge, EEB Rob Garverick, and Department of Energy
Tyler Tiller accompanied Sullivan, while First Deputy of the
Cabinet of Ministers and Foreign Minister Rashit Meredov and
Deputy of the Cabinet of Ministers for Oil and Gas Tachberdi
Tagiyev sat with the president.


4. (SBU) Berdimuhamedov agreed with Sullivan that the
opening ceremony of the U.S.- and UN-funded border crossing
station at Imamnazar between Turkmenistan and Afghanistan the
previous day had been an excellent event and an important
symbol for increasing regional economic integration. He
thanked Sullivan for his participation (septel),and noted
our common goals and mutual cooperation. The president
expressed his commitment to upgrading Turkmenistan's border
security, while building good relations with contiguous
neighbors. He named narcotics as the most important
border-security issue of the moment. He said, "I won't hide
any information. This is a very serious problem for us."


5. (SBU) Sullivan briefly reviewed the expansion of our
commitment and cooperation with Turkmenistan, noting
Secretary Rice had written to Berdimuhamedov that we are

SIPDIS
interested in "turning the page." He expanded on Secretary
Rice's regional integration initiative, and previewed for the
president the speech he delivered later in the day on
Turkmenistan and its emerging economic opportunities.

ASHGABAT 00000866 002 OF 003


Regarding economic reform, the Assistant Secretary said that
it is far better to undertake the process during an economic
expansion rather than wait for a crisis to force actions.
A/S Sullivan noted Turkmenistan,s problematic dual exchange
rates and uncertain investment climate, and cited WTO as a
worthy long term goal. Sullivan recounted that a journalist
covering the Imamnazar event had asked if deepening economic
and commercial cooperation with the United States compromises
Turkmenistan's policy of neutrality. Sullivan answered,
"This kind of cooperation, trading in all directions, and
supplying energy to several buyers enhances Turkmenistan's
neutrality, which we firmly support."

"WE WANT TO WORK WITH YOU ON NEW ECONOMIC MODELS"


6. (SBU) Berdimuhamedov asked Sullivan to convey his thanks
to Secretary Rice for her attention to Turkmenistan regional
integration, and the region's important issues. He said his
government had had "much (internal) discussion" about
cooperation with the United States, and he was pleased it was
now moving forward in all areas.


7. (SBU) Berdimuhamedov said, "I want to make clear we are
paying special attention to diversification of hydrocarbon
exports. We are open to discuss all issues. We have never
rejected the concept of a Trans-Caspian Pipeline. We want
your (U.S.) companies involved. We want specific projects to
be successful." Sullivan underscored the importance of
diversification, particularly the Caspian route, noting it
was not in Turkmenistan,s interest to sell gas to only one
or two buyers. He also emphasized that, consistent with
Turkmenistan,s neutrality policy, U.S. companies should be
given opportunities, both in the offshore and onshore sectors
of Turkmenistan energy development.


8. (SBU) Berdimuhamedov expressed thanks for visits by SCA
Assistant Secretary Boucher, PDAS Mann, and DAS Feigenbaum.
Their discussions with him had clarified issues, and he was
in essential agreement with their views. Then he lamented,
"So far, our energy dialog is theoretical, with nothing
concrete. Life is going on; time is flying.8 The President
renewed his call for the U.S. to make &concrete proposals.8


9. (SBU) The president elaborated, "We want to work with you
on new economic models -- certainly in energy, but more
broadly in the economy. We are very keen to develop all
sectors of the economy, including textiles, to increase our
GDP for the benefit of the people." He stated clearly, "We
are truly eager to learn new economic models of development.
We need your expertise because, frankly, we're interested in
your model. We need a plan of action to implement it. Thank
God there are no current crises so we can look outward and do
new things."


10. (SBU) Gesturing toward Meredov, Berdimuhamedov said, "My
foreign minister advised me to start with political reform,
but I told him economics is more important. Economics has to
come first. Militarily, we are of course a neutral state.
But economically, we want the 'American School' model."


11. (SBU) Sullivan responded we would be pleased to work
closely with Turkmenistan on the economic model that has made
the United States so successful and prosperous, suggesting an
exchange of economic experts to share information. He
advocated diversifying the economy, suggested focusing on
civil aviation and telecommunications which would also help
spur regional integration, and pushed for improving the
investment climate -- all essential for large-scale foreign
investment. He explained the U.S. government cannot tell
private companies where to invest, but we can help
Turkmenistan create the conditions to attract their
investment. Turning to the energy sector, A/S Sullivan said
that U.S. private companies want to invest in Turkmenistan
and can bring world-clas capital, technology and training. He
underscored that American companies have a strong track
record in terms of training locals and benefiting

ASHGABAT 00000866 003 OF 003


economically more broadly. Berdimuhamedov replied, "We are
fine working with private companies as long as it's mutually
beneficial."

ENERGY DELEGATION TO UNITED STATES APPROVED


12. (SBU) Sullivan told Berdimuhamedov we are keenly aware
he wants "concrete action." One concrete step that would
"move us from theory to action" would be to accept Secretary
of Energy Bodman's invitation for senior Turkmen gas and oil
officials to travel to Washington and Houston by the end of
September. Their visit would include work on economic
models. Berdimuhamedov accepted on the spot, saying, "Our
delegation, led by the Deputy of the Cabinet of Ministers
Tagiyev, will go by the end of September. (COMMENT: The
ever-scowling Tagiyev remained impassive, but Foreign
Minister Meredov shot the Charge a quick glance. Clearly,
Meredov had greased the skids for this decision. END
COMMENT.)

"WE WANT MORE EXCHANGE PROGRAMS"


13. (SBU) Before closing, Berdimuhamedov made a pitch for
more educational and professional exchange programs. He
said, "This is really important for us. We want to have U.S.
experience and knowledge." (COMMENT: We will pocket this
statement to work with Foreign Minister Meredov to storm the
ramparts of the Ministry of Education where a good number of
our exchange and education programs is held up. END COMMENT.)

COMMENT


14. (SBU) We were struck by Berdimuhamedov's repeated
insistence he wants to learn from the American experience,
especially focusing on new economic models for Turkmenistan.
This window of opportunity probably will not stay open
indefinitely. We need to identify what we can do and move
swiftly to implement concrete cooperation. We will report
separately our recommendations.


15. (SBU) COMMENT CONTINUED: It is significant President
Berdimuhamedov met with the Sullivan delegation on the same
day Iranian President Ahmedinejad had arrived for a two-day
visit. Although the Iranian state visit was the lead story
in the government newspapers, the Sullivan visit received
just about equal high-profile coverage in print and on
television. END COMMENT.


16. (U) A/S Sullivan cleared this cable.

HOAGLAND