TURKMENISTAN: DEPUTY FOREIGN MINISTER STRESSES

UNCLAS SECTION 01 OF 03 ASHGABAT 001330

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E.O. 12958: N/A
TAGS: ECON ETRD PGOV PREL TX
SUBJECT: TURKMENISTAN: DEPUTY FOREIGN MINISTER STRESSES
COMMITMENT TO ECONOMIC AND TRADE REFORM


1. (U) Sensitive but Unclassified. Not for internet
distribution.


2. (SBU) SUMMARY: In his September 29 meeting with Deputy
Assistant Secretary of Commerce Paul Dyck, Deputy Foreign
Minister Wepa Hajiyev summarized measures taken by the
Turkmenistan government to improve its trade relations. DAS
Dyck expressed U.S. Government interest in expanding trade
and other areas of cooperation. DFM Hajiyev emphasized the
importance of training and advanced technology in the
Turkmenistan trade strategy and proposed further
opportunities for bilateral cooperation such as involvement
in the creation of an trade policy institute, closer
cooperation with the new Ministry of Trade, and
intensification of trade promotion activities. END SUMMARY.

TURKMENISTAN STRATEGIES TO ENHANCE TRADE


3. (SBU) Deputy Assistant Secretary of Commerce Paul Dyck met
September 29 with Deputy Foreign Minister Wepa Hajiyev.
Hajiyev began by noting the economic and trade reforms
undertaken since the election of President Gurbanguly
Berdimuhamedov in February 2007. As a result of improvements
in the legal framework for trade and foreign economic
relations, conditions have improved, as indicated by a 23
percent increase in foreign investment during the past year.
Hajiyev also mentioned programs to facilitate the work of
private enterprises and small and medium businesses.
Finally, he cited efforts to improve the Trade and Industry
Chamber, particularly in its trade-related aspect, which have
allowed foreign businesses to be established in Turkmenistan.


4. (SBU) Emphasizing the importance that Turkmenistan
attaches to its trade policy, Hajiyev said ministries and
organizations want to locate foreign partners who can provide
advanced technology and improved products.
Government-organized trade fairs are arranged as a way for
Turkmen entities to find new partners with better
technologies than Turkmenistan's "traditional" partners.


5. (SBU) Hajiyev also noted the importance of stable currency
and exchange rates to attract investment and increase trade,
mentioning ongoing preparation for the redenomination of the
Turkmen manat on January 1, 2009. He added that measures to
equalize the exchange rate of the manat have been viewed
positively by foreign businesses. Other trade facilitation
measures include a "quite liberal" visa regime for business
travelers and continued improvement of the legal guarantees
for foreign businesses, including the signing of more than
100 intergovernmental agreements on issues such as trade,
double taxation and the protection of investments during

2008. (COMMENT: Turkmenistan's system of Letters of
Invitation and limiting businessmen to 30-day visas until
their offices are registered cannot be described as
"liberal." END COMMENT.)


6. (SBU) Concerning trade with the United States, Hajiyev
said our relations are based on mutual benefit and respect.
He thought it would be possible to increase the current
volume of bilateral trade, including through the use of
diplomatic channels. A more active exchange of ideas could
create a trend toward more partnerships. Hajiyev suggested
that the MFA could play the role of a coordinator in the
trade sphere.

LOOKING TO BUILD BUSINESS TIES WITH TURKMENISTAN


7. (SBU) DAS Dyck noted that the U.S. and Turkmenistan
Governments share the same goals of developing our political,
economic and strategic relations. U.S. companies have been

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involved in Turkmenistan in the hydrocarbon and agriculture
sectors, and the U.S. Government wants to build on their
success. DAS Dyck agreed on the importance of reform to
attract trade and investment and expressed appreciation for
Turkmenistan's efforts in this area, including cooperation on
a Trade and Investment Framework Agreement. At the same
time, the United States is looking for areas where our
governments can work more closely and increase trade
relations. The United States would like to see companies
such as Boeing and Case New Holland build on their current
success by adding additional projects in Turkmenistan, as
well as new projects such as Chevron's pending natural gas
proposal.

TURKMENISTAN SEEKS PRODUCTIVE RELATIONSHIPS AND ADVANCED
TECHNOLOGY


8. (SBU) Hajiyev noted the importance of "productive
relationships" with foreign companies, including, for example
the purchase not only of aircraft from Boeing, but also
Boeing's delivery of training and services. In the
agricultural sector, tractor purchases are important in order
to achieve Turkmenistan's goals in that sector. Hajiyev
pointed out that, based on presidential directives,
Turkmenistan is actively seeking to encourage exchanges of
experience and training as part of its evolving strategy for
trade policy, including the creation of an institute for
strategic economic policy. He suggested that the U.S.
Government might explore an "active exchange of experience"
with this new entity.


9. (SBU) Turkmenistan's leadership also pays close attention
to advanced technology and new developments in science.
Government agencies will pursue this interest in science,
particularly in the energy and agricultural spheres. Hajiyev
suggested that U.S. companies could contribute to this
effort. He cited President Berdimuhamedov's statement during
the 21st People's Council that urged the "rational use of
natural resources" and the use of advanced technology to
address environmental problems.


10. (SBU) The new Ministry of Trade, established in 2007, has
the high priority task of improving economic relations
through trade. Hajiyev suggested the U.S. Government could
pursue cooperation with this Ministry with the aim of helping
it to fulfill this task. He also advocated for more U.S.
trade delegations and trade shows that could foster
cooperation between U.S. business and Turkmen entities. The
results of such business fora could be "dramatic" as Turkmen
companies find out about better technologies and products
that would lead them away from their "traditional partners."
Such trade promotion activities would also help to overcome
the geographical advantage that neighboring countries have in
conducting trade. DAS Dyck mentioned that the newly-formed
U.S.-Turkmenistan Business Council will play a role along
these lines.

BETTER VISA REGIME WOULD BENEFIT TRADE


11. (SBU) DAS Dyck mentioned the importance that companies
around the world attach to a visa regime that allows business
travelers easy access to a country, a practice that
facilitates economic relations. Hajiyev noted that there is
no separate channel to obtain a Turkmen business visa, but
that it helps to have a business partner inside Turkmenistan.
He suggested that the Trade and Industry Chamber could
develop a role in facilitating business visas as part of its
work in attracting foreign companies to the country.


12. (SBU) COMMENT: Turkmenistan's visa regime is one of the

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biggest impediments to trade and investment by foreign
companies. If the Trade and Industry Chamber is able to
facilitate visas and help companies to obtain longer-term
visas, it will be a plus. We hope that the Chamber does not
become one more layer in the bureaucratic process for
obtaining a visa. END COMMENT.


13. (U) DAS Dyck cleared this cable.
CURRAN