Identifier
Created
Classification
Origin
07TASHKENT1069
2007-06-05 11:48:00
CONFIDENTIAL
Embassy Tashkent
Cable title:  

THE ERA OF U.S. ASSISTANCE IS OVER

Tags:  PREL EAID UZ 
pdf how-to read a cable
VZCZCXRO5830
PP RUEHDBU
DE RUEHNT #1069/01 1561148
ZNY CCCCC ZZH
P 051148Z JUN 07
FM AMEMBASSY TASHKENT
TO RUEHC/SECSTATE WASHDC PRIORITY 7969
INFO RUEHAK/AMEMBASSY ANKARA 2718
RUEHAH/AMEMBASSY ASHGABAT 3084
RUEHTA/AMEMBASSY ASTANA 9217
RUEHEK/AMEMBASSY BISHKEK 3691
RUEHDBU/AMEMBASSY DUSHANBE 3554
RUEKJCS/SECDEF WASHINGTON DC
RHMFISS/HQ USCENTCOM MACDILL AFB FL
RHEHNSC/NSC WASHINGTON DC
C O N F I D E N T I A L SECTION 01 OF 03 TASHKENT 001069 

SIPDIS

SIPDIS

DEPARTMENT FOR SCA/CEN AND EUR/ACE
ANKARA FOR AG ATTACHE
ASTANA ALSO FOR USAID

E.O. 12958: DECL: 06/05/2017
TAGS: PREL EAID UZ
SUBJECT: THE ERA OF U.S. ASSISTANCE IS OVER

REF: A. TASHKENT 1060 AND PREVIOUS

B. TASHKENT 536 AND PREVIOUS

Classified By: CDA Brad Hanson for reasons 1.4 (b) and (d).

-------
Summary
--------

C O N F I D E N T I A L SECTION 01 OF 03 TASHKENT 001069

SIPDIS

SIPDIS

DEPARTMENT FOR SCA/CEN AND EUR/ACE
ANKARA FOR AG ATTACHE
ASTANA ALSO FOR USAID

E.O. 12958: DECL: 06/05/2017
TAGS: PREL EAID UZ
SUBJECT: THE ERA OF U.S. ASSISTANCE IS OVER

REF: A. TASHKENT 1060 AND PREVIOUS

B. TASHKENT 536 AND PREVIOUS

Classified By: CDA Brad Hanson for reasons 1.4 (b) and (d).

--------------
Summary
--------------


1. (C) U.S. Coordinator for Assistance to Europe and Eurasia
Tom Adams urged Deputy Prime Minister Azimov and First Deputy
Foreign Minister Nematov to resolve ongoing issues involving
an Embassy FSN and the seizure of U.S. assistance funding
from two nongovernmental organizations. The U.S. is
reviewing both its assistance programs to Uzbekistan and the
overall bilateral relationship, he warned, and failure to
resolve these issues could have negative consequences. Both
Azimov and Nematov expressed appreciation for past U.S.
assistance, and both called for an increase in the bilateral
trade relationship. However, neither was prepared to engage
substantively on the issues Adams raised, parroting the
official line that everything was being done in full
accordance with Uzbek law. Both officials also noted that
Uzbekistan no longer requires additional assistance from
abroad. Nematov said Uzbekistan appreciates assistance from
the United States, but the relationship between the countries
must be equal with no political pressure and nongovernmental
organizations implementing such assistance must comply with
specific requirements. Azimov said only that the era of U.S.
assistance has ended. Both officials were in listen mode and
had clearly not received instructions from President Karimov,
who will ultimately decide whether to show any flexibility on
the issues. Recent events suggest that while Uzbek rhetoric
about wanting a better relationship with the United States
will continue, Uzbek actions will lag behind. End summary.


2. (C) U.S. Coordinator for Assistance to Europe and Eurasia
Tom Adams, accompanied by the Charge, met separately with
Deputy Prime Minister Rustam Azimov and First Deputy Foreign
Minister Ilkhomjon Nematov June 4 to discuss obstacles in
U.S. assistance programs with Uzbekistan. Azimov was
accompanied by the Minister of Foreign Economic Relations, a
Deputy Minister of Justice, and the First Deputy Chairman of

the State Tax Committee. In both meetings, Adams recalled
the value of U.S. assistance to Uzbekistan and said that we
wanted our assistance programs to continue in support of
improved relations between our two countries. However,
recent events - particularly the case against Embassy FSN
Dmitriy Bityutskiy (Ref A) and the seizure of USG funds from
two U.S. nongovernmental organizations (Ref B) - had called
into question the Government of Uzbekistan's commitment to a
better relationship. On the second issue, Adams said that
the U.S. would consider reprogramming funds from microfinance
programs into an area of mutual agreement, such as health
care, if the Uzbek government would agree to return the
seized funds. Adams warned that the Government of
Uzbekistan's actions have prompted a review of U.S.
assistance programs as well as a review of the overall
U.S.-Uzbekistan relationship, and urged quick action to
resolve both of these issues. Failure to do so, he said,
could well have negative consequences.


3. (C) Adams also prodded Azimov and Nematov to have the
Government of Uzbekistan move faster on implementing already
agreed upon agricultural projects, funded by the sales
proceeds of surplus commodities, under USDA's previous years
Food for Progress programs. To date, the government has
issued presidential decrees on financing ten of 38 approved
projects, representing approximately $5.3 million of the
original $13.6 million worth of projects approved. Azimov
merely responded that these projects needed to operate
successfully and he took Adams' point to use the dollars more
effectively. Nematov said nothing on the subject. (Comment:
Post hopes this high-level mention will spur some action by
the Cabinet of Ministers on the 28 projects prior to the next
U.S.-Uzbek Joint Working Group meeting the end of
June/beginning of July. End comment.)

--------------
Azimov: We Can Do It Ourselves
--------------

TASHKENT 00001069 002 OF 003




4. (C) Deputy Prime Minister and Minister of Finance Azimov
told Adams that Uzbekistan has experienced strong economic
growth over the past 16 years. This positive economic
performance, he said, has been matched by political and
economic reform directed by President Karimov. Uzbekistan
has run a budget surplus in recent years and also acquired
much human resource expertise. He noted, however, that
Uzbekistan wants to increase its economic and trade
relationship with American companies, and that Minister of
Foreign Economic Relations Ganiev plans to participate in the
annual American Uzbek Chamber of Commerce meeting in
Washington later in June. In business, Azimov said, there is
no double standard; the only standard is profit.


5. (C) Azimov said that he had consulted with tax authorities
on the funds seizure issue and could only say that everything
had been done consistent with Uzbek law. Compromise
proposals should be addressed to the Ministry of Foreign
Affairs. He acknowledged that U.S. programs have helped
Uzbekistan; however, he said, the Government of Uzbekistan is
not looking for additional assistance from the United States
because it can now fund these types of programs itself. The
era of American assistance, according to Azimov, has come to
an end.

--------------
Nematov: All According to the Law
--------------


6. (C) First Deputy Foreign Minister Nematov also expressed
appreciation for past U.S. assistance on counterterrorism,
counternarcotics, border security, and nonproliferation. He
also said that the Government of Uzbekistan is grateful for
U.S. humanitarian assistance, mentioning specifically the
recent delivery of $12 million of medical assistance under
Project Hope. Like Azimov, Nematov also mentioned Minister
Ganiev's plans to participate in the American Uzbek Chamber
of Commerce meeting, commenting that the U.S.-Uzbek trade
relationship is not close to meeting its full potential.
Nematov stated total bilateral trade turnover had declined
from $543 million in 2004 to $245 million in 2006 and that
there was much potential to expand. He reiterated previous
comments to the Ambassador and Charge that there is no
campaign against U.S. interests, nongovernmental
organizations, or employees. The Government of Uzbekistan
wants a good relationship with the United States, but the
relationship must be on an equal footing, and with no
political pressure. Uzbekistan, Nematov said, appreciates
assistance, but as a sovereign, independent, and stable
country, does not absolutely require outside help,
particularly in areas such as democratic reform where the
country is doing fine on its own.


7. (C) Nematov repeated past comments to the Charge that
Bityutskiy's case was being handled in full accordance with
Uzbek law, that the investigation is ongoing, and that the
United States should not jump to conclusions until it is
completed. The Government of Uzbekistan, he said, respects
and values the work done by the U.S. Embassy in Tashkent and
its staff. However, these activities also must be conducted
within the context of Uzbek law.


8. (C) Nematov continued his "obey the law" theme with regard
to the funds seizure case. He said that financial sanctions
against the organizations were imposed in accordance with
law. Organizations that obey the law do not have any
problems operating in Uzbekistan. However, in this case, tax
audits conclusively demonstrated that the organizations did
not deposit cash in the bank as they were required to do.
Nematov estimated a total of approximately seven billion soum
($5.6 million) was involved, broken down as Mercy Corps - 707
million soum ($565,000),ACDI/VOCA - 3.5 billion soum ($2.8
million),Joint Development Associates - 68.1 million
($54,000),and FINCA - 2.6 billion soum ($2 million). This
was a very large sum in Uzbekistan, he asserted. He said
that the Government of Uzbekistan would consider Adams'
proposal to reprogram the seized funds into a mutually
acceptable area, but that the proposal would be looked at in
the context of Uzbek law.


TASHKENT 00001069 003 OF 003



9. (C) According to Nematov, the Government of Uzbekistan
welcomes continued operation of American nongovernmental
organizations. However, if they were to operate in
Uzbekistan, they must abide by several requirements: First,
they must obey Uzbek law. Second, all activities must be
coordinated with and approved by the government. Third, all
activities must work for Uzbekistan's interests. Fourth, the
activities must contribute to ongoing Government of
Uzbekistan reform efforts.

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


10. (C) Azimov and Nematov were in receive mode and clearly
did not have instructions from on high to do anything more
than parrot oft-repeated, and meaningless, statements about
Uzbekistan's respect for the law. They will report the
meetings to President Karimov, who will ultimately decide
whether to show any flexibility on the FSN and
nongovernmental organization seizure of funds cases. Based
on recent events and past experience, most likely Uzbek
rhetoric about the desire for good relations and respect for
the rule of law will continue while Uzbek actions will lag
far behind. Post found it interesting that both Azimov and
Nematov pointedly mentioned Minister Ganiev's planned visit
to Washington. The message between the lines was that the
U.S. should not allow disputes in the bilateral relationship
to negatively affect the Government of Uzbekistan's ability
to court investment from U.S. companies.
HANSON