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

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CORRECTING TEXT IN PARAS 1 AND 2

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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

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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

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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