TURKMENISTAN: MORE ON SHAKE-UPS OF ECONOMIC AND

C O N F I D E N T I A L SECTION 01 OF 02 ASHGABAT 000479 SIPDIS SIPDIS STATE FOR SCA/CEN, EEB, INR/B E.O. 12958: DECL: 07/20/2017 TAGS: PGOV PINR EFIN TX SUBJECT: TURKMENISTAN: MORE ON SHAKE-UPS OF ECONOMIC AND FINANCIAL LEADERSHIP REF: A. ASHGABAT 0474 ¶B. 07 ASHGABAT 1246 Classified By: Charge Richard E. Hoagland for reasons 1.4 (B) and (D). ¶1. (C) SUMMARY: At an extended Cabinet of Ministers meeting April 14 that included a discussion of economic and financial reforms (Ref A),President Berdimuhamedov made a number of personnel changes. According to the well-connected local representative of the European Bank for Reconstruction and Development (EBRD),ex-Central Bank Chairman Geldimurat Abilov has been on his way out for a long time. The incoming Chairman, former Chairman of the State Bank for Foreign Economic Relations (Vneshekonombank) Guvanchmurat Goklenov, is a "total politician" who can be "obstructive" and "not particularly open." The new Deputy Chairman for economic and financial issues, former Minister of Finance HojamuratGeldimuradov, has a strong background and will strengthen the Cabinet. While many of these personnel changes seem to be an improvement, sacking some ministers may only superficially resolve problems and in itself will not necessarily lead to successful reforms. END SUMMARY. CENTRAL BANK OF TURKMENISTAN ¶2. (C) At an extended Cabinet of Ministers meeting April 14 that included a discussion of economic and financial reforms, President Berdimuhamedov fired Central Bank Chairman Geldimurat Abilov. Rumors that Central Bank Chairman Geldimurat Abilov would be fired had been current in Ashgabat for months. According to EBRD local representative Tony Myron, EBRD President Jean Lemierre said that Abilov was "cold" in meetings. Myron added that Abilov was often "sullen," and communicated in an impolite manner to Lemierre that EBRD's lending rates and terms were not needed in Turkmenistan. ¶3. (C) The president appointed Chairman of the State Bank for Foreign Economic Relations (Vneshekonombank) Guvanchmurat Goklenov, whose wife is Berdimuhamedov's wife's sister (Ref B),as the new Central Bank Chairman. In Myron's opinion, Goklenov is no improvement over Abilov. Myron described Goklenov as "obstructive," "not particularly open," and a "total politician." In addition, Goklenov maintained an unproductive relationship with EBRD in his role at Vneshekonombank. Myron said that Goklenov refused to sign some EBRD documentation, because to Goklenov, signing the papers would have limited Turkmenistan's sovereignty. As Myron put it, Goklenov's personality exemplifies "arrogance stemming from a lack of (being in) touch with reality." NEW DEPUTY CHAIRMAN FOR ECONOMIC ISSUES ¶4. (C) Minister of Finance Hojamurat Geldimuradov was named Deputy Chairman for Economic Issues, which will encompass the Ministries of Finance, Economics and Development, and Welfare and Social Care. He will also oversee the work of the Central Bank, Main State Tax Inspectorate, State Customs Service, Main State Standards Inspectorate, State Insurance Organization, and State Committee on Statistics. Myron said that Geldimuradov has a strong background in finance and suggested that he will strengthen the Cabinet. ¶5. (C) Hojamuhammet Muhammedov will remain Deputy Chairman of Agriculture and Textiles, but is losing his economic and financial portfolio. Myron said that Muhammedov is an "economic lightweight" who "talks rubbish" and is "not credible." Muhammedov appears to have quickly shot up the ranks from the Stock Exchange to a Deputy Chairmanship as a result of a close relationship with President Berdimuhamedov. To illustrate Muhammedov's incompetence, Myron mentioned that he had justified state involvement in a 20-year $100 million marble cutting project supported by foreign ASHGABAT 00000479 002 OF 002 investors, because the investors "needed state guidance." DEPUTY CHAIRMAN FOR TRANSPORTATION AND COMMUNICATIONS FIRED ¶6. (C) Deputy Chairman in charge of Transportation and Communications Gurbannazar Ashirov was also fired. Deputy Chairman of Energy, Industry, Construction, and Motor Transportation Nazarguly Shagubiyev will take over responsibilities for this area temporarily. Myron added that rumors that Ashirov would be sacked also had circulated for a long time (Ashirov had received multiple reprimands from the president). However, Myron thought that heaping the blame for lack of progress in the communications sector on Ashirov was unfair, because Minister of Communications Resulberdi Hojangubanov remained steadfast in favor of continuing the monopolization of the cellular network. ¶7. (C) COMMENT: Goklenov and his aunt, Minister of Textiles Jemal Goklenova, are two leaders that we know are part of the extended family of President Berdimuhamedov's wife. Post has also noticed that three ministers -- Minister of Economy and Development Gurbanmurat Gurbanmuradov, newly-appointed Minister of Construction and Construction Materials Industry Shamuhamet Durdiliyev (to be reported septel),and now Deputy Chairman Hojamurat Geldimuradov -- come from the Ahal province village of Bakharly. We will try to find out whether there is also a familial connection in these cases. However, sacking ministers may only superficially resolve problems and in itself will not necessarily lead to successful reforms. END COMMENT. HOAGLAND