BAKIYEV TELLS BOUCHER BASE IS BILATERAL ISSUE

C O N F I D E N T I A L SECTION 01 OF 04 BISHKEK 000707

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SUBJECT: BAKIYEV TELLS BOUCHER BASE IS BILATERAL ISSUE


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Classified By: Amb. Marie L. Yovanovitch, Reason 1.4 (b) and (d).


1. (C) Summary: In a June 8 meeting with Assistant Secretary
for South and Central Asian Affairs Richard Boucher,
President Bakiyev said that U.S.-Kyrgyz cooperation had been
"mutually beneficial" on the political, economic, and
security fronts, but there were unresolved problems with
Manas Air Base. Bakiyev complained that despite a protocol
negotiated last year calling for "no less than $150 million"
to be paid for use of the base, the Kyrgyz had received "only
$7 million" this year. Bakiyev said that the sides need to
"reconsider" take-off and landing fees, as well as rent for
the base. Bakiyev complained that other base-related issues
had not been resolved quickly enough, and he contended that
the airman involved in the shooting incident should have
remained in Kyrgyzstan until the matter was "resolved."
Boucher explained to Bakiyev that the $150 million figure
represented the total value of all U.S. payments and
assistance to Kyrgyzstan, that the U.S. was current on all
payments under the protocol, and that the U.S. had kept the
airman in country until the Kyrgyz investigation was
completed, as the Kyrgyz government had requested. Boucher
agreed that previous incidents should have been resolved more
quickly, and he suggested activating the joint commission to
address base-related issues in a more timely manner.


2. (C) Boucher welcomed Bakiyev's commitment to carrying out
judicial and law enforcement reforms, and he said that the
U.S. wanted to work closely with Kyrgyzstan on these issues.
Kyrgyz civil society groups and government interlocutors had
told him emphatically that Kyrgyzstan's Millennium Challenge
Account Threshold Country Plan could be implemented
successfully, and Boucher said he would take this message
back to the Millennium Challenge Corporation Board. Boucher
also outlined U.S. initiatives on regional economic
integration and development. End Summary.


3. (U) Assistant Secretary of State for South and Central
Asian Affairs Richard Boucher met with President Kurmanbek
Bakiyev for over an hour on June 8. Ambassador Yovanovitch,
Senior Advisor Hayden, and Bishkek Pol-Econ Chief Burgess
accompanied Boucher. National Security Council Secretary
Mamytov, Foreign Minister Karabayev, and Foreign Policy
Advisor Ryskulov accompanied Bakiyev. Assistant Secretary
Boucher's other meetings in Kyrgyzstan will be reported
septel.

Political Reform and Millennium Challenge
--------------


4. (C) President Bakiyev welcomed Assistant Secretary Boucher
and noted that bilateral cooperation had been "mutually
beneficial" in various fields. Bakiyev said that
Kyrgyzstan's democratic reforms were "irreversible" and its
level of democratic development was higher than in any other
country of the former Soviet Union. The President said that
Kyrgyzstan's active civil society made it impossible for
government officials even to try to hide misdeeds. On
constitutional reform, Bakiyev said that "emotion" had led to
"hasty decisions" in the past, but the Constitutional Court
would follow "proper procedures" in evaluating the current
proposed amendments to the constitution. Bakiyev said that
Kyrgyzstan had taken "necessary measures" to improve its
security services, including raising salaries for law
enforcement personnel, and he acknowledged the support of
international organizations in this area. Bakiyev assured

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Boucher that his government was determined to follow through
on reforms to the judiciary and law enforcement agencies.


5. (C) Boucher acknowledged that the political reform process
had moved forward over the past year. He cautioned, however,
that continued delays on constitutional reform raised
questions about political stability -- questions that could
best be answered through adoption of a new constitution.
Boucher welcomed Bakiyev's comments about judicial and law
enforcement reforms, and he said that the U.S. wanted to work
with the Kyrgyz to implement these reforms. Boucher said
that he hoped the Millennium Challenge Corporation Board
would decide soon whether to fund Kyrgyzstan's proposed
Threshold Country Plan, which targets judicial and law
enforcement reforms. However, said Boucher, the Millennium
Challenge Corporation had asked a number of questions about
Kyrgyzstan's proposal, including whether there was sufficient
political will to carry out the program. Boucher said that
the answer he had gotten on this visit was that government
and civil society supported funding for Kyrgyzstan's
Threshold Country Plan, believed the reforms could be
implemented, and understood that judicial reform was
fundamental to economic development and improved security.

Economic Development and Regional Integration
--------------


6. (C) Bakiyev said he was satisfied with economic indicators
for the first four months of the year: the Gross Domestic
Product showed good growth, inflation was within limits, and
trade turnover increased. Bakiyev said that Kyrgyzstan's new
Country Development Strategy had full donor support and left
no doubt as to the steps Kyrgyzstan needed to take to promote
economic growth.


7. (C) Boucher welcomed the positive economic results, and he
said that regional opportunities in trade and electric energy
exports would further enhance Kyrgyzstan's economic
development. Boucher said he hoped the Kyrgyz parliament
would move forward with proposed legislation to allow
privatization in the electric energy sector, so that
Kyrgyzstan could attract the right kind of foreign investment
in the sector. Boucher said Kyrgyzstan had an important
regional role to play in energy exports, and U.S. experts
were working with the Kyrgyz to connect Kyrgyzstan to
projects to export electric energy to Afghanistan and South
Asia. He continued, saying that the U.S. was looking to open
new trade routes through improvements to the region's
transportation infrastructure. He encouraged high level
Kyrgyz participation at the Central Asia Trade and Investment
Framework Agreement meeting in Washington this July to
address other barriers to trade. Boucher also lauded
Kyrgyzstan's regional role in education, pointing to the
American University in Central Asia, which attracts students
from all of the countries of Central Asia and Afghanistan.

Bakiyev: Problems with the Air Base
--------------


8. (C) After acknowledging many positive aspects of the
bilateral relationship, Bakiyev said it was necessary to
discuss problems with the air base, as he had with Secretary
of Defense Gates on June 5. Bakiyev said that the Kyrgyz and
the U.S. had taken different approaches to evaluating
economic benefits from the base. He said that in 2006, the
sides had negotiated a protocol that called for "no less than

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$150 million" to be paid in compensation for the base.
Bakiyev complained that "these figures" represented only
intentions, and the "facts" were that Kyrgyzstan had received
only $7 million this year for the base. He said that the
U.S. method of including other development assistance -- such
as democracy and governance programs -- in the total was "not
correct." The President said that the "talk of benefits"
needed to be concrete, and therefore the sides must
reconsider take-off and landing fees and other rents for the
base. He also asked about new radar for the airport.


9. (C) Bakiyev then turned to the "unfortunate incidents" at
the base. On the Ivanov shooting, he complained about the
"removal" of the airmen from Kyrgyzstan, saying that the
airman should have remained in country until the matter was
"resolved." As a result, "the public" did not know whether
the airman would be punished. The President also complained
of "other road accidents" resulting in injuries and deaths,
but for which "no actions were taken." He said that the U.S.
should have acted more quickly to resolve these issues; the
shooting especially caused negative public reaction when the
U.S. government did not act to help the widow of the family's
sole breadwinner.

Boucher: A Path to Stabilize Base Relations
--------------


10. (C) Boucher pointed out that Manas Air Base played an
essential role in promoting regional stability, and this was
a major benefit to Kyrgyzstan, which itself had suffered
terrorist incursions in the past. Boucher said that while
other Coalition members use the base, the U.S. had a special
responsibility as operator and prime user of the base, and
the U.S. wanted to make sure the base brought other benefits
to Kyrgyzstan. Boucher said that we were looking to increase
base purchasing from local vendors, and he promised to bring
in contracting specialists to advise Kyrgyz businesses how to
compete for contracts in Afghanistan. Boucher said the U.S.
would try to resolve issues more quickly in the future, and
he suggested activating the joint commission as the best
forum for addressing and resolving base-related issues.


11. (C) Boucher explained to Bakiyev that in 2006, the U.S.
and Kyrgyzstan reached agreement on a protocol for land rents
and other financial arrangements for the base, and all
payments under the protocol have been made on time. The $150
million figure represented an estimate of the benefits
derived by Kyrgyzstan from the overall relationship with the
U.S. Boucher and Bakiyev agreed that Ambassador Yovanovitch
and Security Council Secretary Mamytov would provide a
complete breakdown of the $150 million figure for Bakiyev.
Boucher also suggested that Bakiyev might discuss additional
air navigation equipment for the airport with CENTCOM
Commander Admiral Fallon during his visit to Kyrgyzstan June

15.


12. (C) Regarding the shooting incident, Boucher pointed out
that the U.S. had made a payment to Mrs. Ivanova that was
twenty times her husband's annual salary -- in effect, a
lifetime pension. Boucher pointed out that the airman had
remained in Kyrgyzstan until the conclusion of the Kyrgyz
investigation, which is what the Kyrgyz government had
requested. The U.S. investigation is still going on, but if
there is a finding that the airman is liable for the
shooting, he will be punished under U.S. law, said Boucher.
He also said that the U.S. had made an offer of compensation

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for the September plane collision, but we were waiting for a
response from the Kyrgyz Air company.

Shanghai Cooperation Summit and the Base
--------------


13. (C) Boucher said that there was one more base-related
issue that needed to be addressed, and that was the upcoming
summit of the Shanghai Cooperation Organization in Bishkek in
August. Boucher said that the U.S. welcomed the
organization's work on terrorism, border security, and
economic cooperation, but at its summit two years ago, the
organization had "wandered off" with its comments on basing
in Central Asia. Boucher said that we had spoken with other
Shanghai Cooperation Organization members about this, and the
Russians and Chinese agreed that stability in Afghanistan was
important for the region. Therefore, Boucher said, he hoped
the base would be kept off the summit's agenda. He concluded
that there is nothing unusual in the arrangement, as the
Germans have a base in Uzbekistan and the French operate out
of Tajikistan. Bakiyev said that the base was a U.S.-Kyrgyz
bilateral issue, and he assured Boucher that the base would
not be discussed at the summit.

Better Relations with Neighbors
--------------


14. (C) Asked about regional relations, Bakiyev said that
there were "excellent prospects" for the relationship with
Kazakhstan. Following Kazakh President Nazarbayev's recent
visit to Kyrgyzstan, Bakiyev said that he expected Kazakh
investment in Kyrgyzstan, as well as Kyrgyz exports to
Kazakhstan (cement, glass, and other materials),to grow.
Bakiyev said he supported Nazarbayev's proposal for a common
economic space in Central Asia, regardless of whether other
countries join in. Turning to Uzbekistan, Bakiyev said that
the relationship was often difficult. He said that active
cooperation between Uzbek and Kyrgyz security services had
helped convince the Uzbeks that Kyrgyzstan was not sheltering
anti-Uzbek terrorists.

Comment
--------------


15. (C) In separate meetings, senior Kyrgyz officials assured
Boucher that there is no question about the base's continued
presence. The tone of the meeting with Bakiyev was positive,
but for Bakiyev, the bottom line continues to be money, which
he claims is necessary because Kyrgyzstan faces "economic
difficulties." Bakiyev has either been poorly briefed or he
chooses to misunderstand the base funding protocol negotiated
last summer, and he was clearly not interested when the
Assistant Secretary started to explain the details of the
protocol. On other issues, Bakiyev was more positive, saying
the right things on constitutional, judicial, and law
enforcement reform.


16. (U) Assistant Secretary Boucher has cleared this message.
YOVANOVITCH