Identifier
Created
Classification
Origin
08BISHKEK1132
2008-11-06 10:20:00
CONFIDENTIAL
Embassy Bishkek
Cable title:  

TURKS COUNSEL KYRGYZ PRIME MINISTER ON INVESTMENT

Tags:  PREL ECON EINV KG 
pdf how-to read a cable
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C O N F I D E N T I A L SECTION 01 OF 02 BISHKEK 001132 

SIPDIS

DEPT FOR SCA/CEN (GORKOWSKI)

E.O. 12958: DECL: 11/06/2018
TAGS: PREL ECON EINV KG
SUBJECT: TURKS COUNSEL KYRGYZ PRIME MINISTER ON INVESTMENT
ISSUES

BISHKEK 00001132 001.2 OF 002


Classified By: Amb. Tatiana Gfoeller, Reason 1.4 (b) and (d).

C O N F I D E N T I A L SECTION 01 OF 02 BISHKEK 001132

SIPDIS

DEPT FOR SCA/CEN (GORKOWSKI)

E.O. 12958: DECL: 11/06/2018
TAGS: PREL ECON EINV KG
SUBJECT: TURKS COUNSEL KYRGYZ PRIME MINISTER ON INVESTMENT
ISSUES

BISHKEK 00001132 001.2 OF 002


Classified By: Amb. Tatiana Gfoeller, Reason 1.4 (b) and (d).


1. (C) Summary: The Turkish Ambassador to the Kyrgyz
Republic briefed the Ambassador November 5 on Kyrgyz Prime
Minister Chudinov's recent visit to Turkey. While not making
any explicit promises regarding Chudinov's request for $60
million in bilateral debt forgiveness, the Turkish Ambassador
said officials in Turkey pressed Chudinov on the importance
of transparency and progress against corruption in the Kyrgyz
Republic. Turkish officials reportedly told Chudinov that
reliance on Russian, Chinese and Kazakh investment would be
"politically stupid," and could threaten the Kyrgyz
Republic's independence. The Turks reasoned with him that
Western countries, including Turkey, would be better sources
of investment because they lacked "political designs" on the
Kyrgyz Republic. Chudinov "made all the right noises in
response" and generally impressed his hosts with his command
of Kyrgyz economic realities. End summary.

Making an Appearance
--------------


2. (C) On the sidelines of the Ambassador's November 5 U.S.
elections event (septel),Turkish Ambassador Serpil Alpman
briefed the Ambassador on Kyrgyz Prime Minister Igor
Chudinov's October 31 - November 1 visit to Turkey. Alpman
attended the meetings in Turkey, and said Chudinov appeared
"statesmanlike, in charge, and knowledgeable about economic
issues." She said these impressions registered with Turkish
officials, but remarked that they contrasted with what she
considered his less impressive image on home turf in the
Kyrgyz Republic.

Debt Forgiveness
--------------


3. (C) Alpman told the Ambassador that, prior to his trip,
Chudinov had approached the Turkish Ambassador with a request
that Turkey forgive the Kyrgyz Republic's $60 million
bilateral debt to Turkey. She reportedly advised him that
Turkey has a firm policy of not forgiving debt. Chudinov,
she reasoned, decided to make a direct approach to Turkish
officials during the recent trip. Alpman told the Ambassador
she forewarned Turkish officials of the impending request,

and considered the resulting Turkish response that it would
"review" Chudinov's request a "success." She added that
Turkish officials emphasized that any consideration of this
request would require prior Kyrgyz action to improve economic
and investment conditions in the Kyrgyz Republic, to include
greater transparency and increased efforts against corruption.

Investment Models
--------------


4. (C) Turning to the investment climate in the Kyrgyz
Republic, Alpman praised the World Bank's recent Doing
Business survey, but lamented that it did not reflect
investment conditions on the ground. She reasoned that the
"Kyrgyz ruling class" is solely focused on short-term
personal financial gain. Alpman then added that Turkish
officials cautioned Chudinov that a reliance on Russian,
Chinese and Kazakh investment would be "politically stupid,"
and could result in a loss of Kyrgyz "independence." "The
Kyrgyz government should welcome Western (including Turkish)
investment," Turkish officials reportedly told Chudinov,
"because we have no political designs on you."


5. (C) Alpman told the Ambassador that she had advised
Chudinov that Turkish investors prefer the Kyrgyz Republic
over its Central Asian neighbors, but that many Turkish
businesspeople are waiting for Kyrgyz reforms before making
any investment in the Kyrgyz Republic. The Turkish

BISHKEK 00001132 002.2 OF 002


government, she said, wants to encourage Turkish investment
in the Kyrgyz Republic. But, she concluded, short-term views
predominate among Kyrgyz officials, who do not care about
long-term issues of improving the investment climate or even
securing their country's independence.

Budgetary Concerns
--------------


6. (C) Alpman lamented Kyrgyz budgetary imbalances for the
past five years, and noted that the Kyrgyz are spending more
than they have been receiving. She believed this problem
might permit outsiders "to buy them up." In a later November
5 conversation with the Ambassador, World Bank Resident
Representative Roger Robinson commented that such imbalances
were not necessarily negative.

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


7. (C) As Turkey is one of the top ten sources for
investment in the Kyrgyz Republic and Turkish companies are
already heavily represented in the consumer goods sector,
Alpman has had a large community of fellow Turks to query
concerning business and investment conditions in her nearly
four years of serving in Bishkek. Points raised by
Chudinov's interlocutors in Turkey regarding transparency and
the fight against corruption echo similar concerns the
Embassy has raised previously with Kyrgyz officials. While
it is unclear if Chudinov will be able to make any
appreciable efforts to realize such changes, it is reassuring
to hear that these points are being reinforced by our allies.
GFOELLER