DAS KROL DISCUSSES TURKMENISTAN/CENTRAL ASIA WITH

C O N F I D E N T I A L SECTION 01 OF 03 ASHGABAT 001158 ////////// C O R R E C T E D C O P Y ////////// CORRECTING TEXT IN PARAS 1 AND 2 ////////// C O R R E C T E D C O P Y ////////// SIPDIS STATE FOR SCA/CEN, EUR/CARC, EUR/RUS E.O. 12958: DECL: 09/03/2018 TAGS: PGOV PREL TX SUBJECT: DAS KROL DISCUSSES TURKMENISTAN/CENTRAL ASIA WITH THE DIPLOMATIC CORPS ASHGABAT 00001158 001.2 OF 003 Classified By: CLASSIFIED BY: CHARGE D'AFFAIRES SYLVIA REED CURRAN FOR REASONS 1.4 (B) AND (D). ¶1. (C) SUMMARY: During a September 2 lunch with members of Ashgabat's foreign diplomatic corps, Deputy Assistant Secretary George Krol raised regional issues of direct concern to the United States and western governments. There was much discussion the situation in Turkmenistan and the region, especially energy security concerns and policies, how the country has evolved since Berdimuhamedov's election last year, the country's foreign investment climate, and the region's water crisis. Director of the United Nations Center for Preventative Diplomacy, Ambassador Jenca, who attended the recent Shanghai Cooperation Summit in Dushanbe, said that Turkmenistan is very interested in promoting passage of a proposed UN resolution on oil pipeline security, and that the interest extends beyond simply protecting oil conduits to include the security of all types of transmission networks (e.g. electrical power grids, etc.) in the region. Ambassador Jenca noted that water supplies continue to be a problem throughout the region, and that Turkmenistan is looking to resolve its ongoing disputes over water rights with both Uzbekistan and Iran. The diplomats noted the slow but sure progress of reform that has occurred over the past year and a half, but also underscored that the investment climate still needs improvement. END SUMMARY. ENERGY SECURITY: PRESIDENT PUSHING PIPELINE SECURITY RESOLUTION ¶2. (C) DAS Krol used the occasion of a lunch meeting September 2 with several members of Ashgabat's diplomatic corps to elicit views on issues of particular interest to the USG in Turkmenistan and Central Asia as a whole. Present at the gathering were Alexi Petriashvili, Ambassador of Georgia; Victor Mayko, Embassy of Ukraine; George Scott, UK Charge d'Affaires; Henri Tomasini, French Charge d'Affaires; and Miroslav Jenca, Director of the United Nations Center for Preventative Diplomacy. Ambassador Jenca, who attended the recent Shanghai Cooperation Summit in Dushanbe, said that 
Turkmenistan is very interested in promoting passage of a proposed UN resolution on oil pipeline security, and that the interest extends beyond simply protecting oil conduits to include the security of all types of transmission networks (e.g. electrical power grids, etc.) in the region. He said that there is widespread belief that the UN offers the best hope as the umbrella caQble of providing such security. The conflict in South Ossetia and disruption of the oil flow via the Baku-Tblisi-Ceyhan pipeline has also heightened interest and concern in this area. Energy security reportedly was raised in talks between Presidents Medvedev and Berdimuhamedov. Energy security will one of the subjects for discussion at the EU Summit in Paris later this month. ¶3. (C) DAS Krol mentioned his plans to meet with the foreign ministers of all five Central Asian states during the upcoming UNGA, and that he will raise the need to take action to prevent the kind of food and energy crises in the region that gripped both Tajikistan and Kyrgyzstan last winter, since such crises threaten the stability of governments. It was noted that Turkmenistan supplied aid during last year's harsh winter to both Afghanistan and Tajikistan. President Rahmon of Tajikistan is expected to be the only Central Asian head of state to attend UNGA. WATER ISSUES ¶4. (C) Ambassador Jenca noted that water supplies continue to be a problem throughout the region, and that Turkmenistan is looking to resolve its ongoing disputes over water rights with both Uzbekistan and Iran. He said that water features prominently in meetings between heads of state in the region. He was disappointed, however, that the issue was not included in the summary findings of the Shanghai Cooperation Summit in Dushanbe, although it had been raised earlier in the goal ASHGABAT 00001158 002.2 OF 003 session of the summit. He noted that Turkmenistan suffers from a severe shortage of agricultural water. UKRAINE/TURKMENISTAN GAS SALES ¶5. (C) Ukrainian Ambassador Mayko said the Ukrainian side is demanding that the contract be renegotiated in Turkmenistan's continued dispute with Ukrainian companies over both construction of a gas tunnel and the sale of gas. (NOTE: As described Reftel, the two countries have had a troublesome economic relationship for the past several years, culminating in the cancellation of a number of construction contracts. END NOTE.) BERDIMUHAMEDOV AND REFORM ¶6. (C) On the subject of where Turkmenistan stands 18 months after Berdimuhamedov's announced reforms, such as in education, most agreed that there have been important changes. The process is slow, however, and the president seems aware that quick changes often lead to devastating losses of political power. Educational reforms are difficult due to a shortage of qualified teachers: Most young teachers were indoctrinated with the Ruhnama and lack the most basic pedagogical skills. However, one recent improvement is that Ruhnama is no longer required reading for university students in Turkmenistan. All in all, there was consensus that Turkmenistan is becoming a more open society: Young people have more opportunities to study abroad (Ukraine issued 1000 student visas in Ashgabat last year),and it is now much easier for young professionals to attend international conferences abroad. ¶7. (C) Berdimuhamedov plans to replace the old, rubber stamp legislature, the Halk Maslahaty, a Soviet institution that convened once a year. Instead, the parliament (Mejlis) will serve as the sole national legislative organ. Guests agreed it was a positive and long-overdue change. The Halk Maslahaty had been dominated by older members and heads of clans, whereas the parliament is expected to function as a more modern law-making body. Berdimuhamedov is thought to believe that the new institution will give the country a more democratic face. ¶8. (C) On the possibility of resistance or unrest in Turkmenistan, guests expressed the view that the Turkmen population is largely apolitical, with little tendency to challenge government actions. One exception to this, however, is when there is economic disruption as happened with the unification of the exchange rate. Removing the many subsidies that the people have come to expect, including on utilities, gasoline, and staple products. The announcement earlier this year of gasoline price hikes caused a rare display of unrest in the country that was quelled only after the measure was canceled. INVESTOR CLIMATE STILL NEEDS IMPROVEMENT ¶9. (C) DAS Krol asked the guests whether they have seen positive changes in conditions for foreign investors in Turkmenistan. Georgian ambassador Petriashvili answered unequivocally in the negative. He said that there is "no investment security and no personal security" for companies because no foreign entity can be guaranteed that a business relationship with the Turkmenistan government last. Even in those instances where new legislation has created more favorable investment conditions, government practices, including the visa regime, make it inhospitable for foreign companies. No contracts may be signed without a presidential decree. Finally, the process is so long and time-consuming that half of all tenders, as well as prices, become outdated before an agreement is ever reached. ¶10. (C) COMMENT: All parties at the gathering were concerned about the current state of affairs in Turkmenistan and the region, particularly about Turkmenistan's ability to manage its water problems. Nevertheless, they noted the slow but ASHGABAT 00001158 003.2 OF 003 sure progress that has occurred over the past year and a half. As is true with many nations in transition, patience and perseverance are necessary in encouraging further reforms. COMMENT. ¶11. (U) DAS Krol cleared this cable. CURRAN