KYRGYZ PRESIDENTIAL ADVISOR COMMENTS ON

C O N F I D E N T I A L SECTION 01 OF 03 BISHKEK 000288

SIPDIS

SENSITIVE
SIPDIS

DEPARTMENT FOR SCA/CEN

E.O. 12958: DECL: 03/26/2018
TAGS: PREL PGOV MARR KG
SUBJECT: KYRGYZ PRESIDENTIAL ADVISOR COMMENTS ON
POST-ELECTION POLITICS

REF: A. BISHKEK 256

B. BISHKEK 195

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Classified By: Ambassador Marie L. Yovanovitch, reasons 1.4 (b) and (d)
.


1. (C) Summary: On March 13, Ambassador met with political
consultant and Presidential advisor Valentin Bogatyrev for a
wide-ranging discussion on economic reform, politics and the
President's health (ref A). Bogatyrev described an economic
reform process that is lagging and incompetent decisions on
the part of the government that could give the Opposition a
break they could never have engineered for themselves.
Bogatyrev was less confident about the course the country was
on and more fearful about the possible political backlash,
then he has been in previous conversatons. In noting that
"any random event could cause a problem," Bogatyrev seemed to
imply that Kyrgyzstan is not predictable, and that the
political structure is more fragile than it appears. End
Summary.

SLOW GOING ON ECONOMIC REFORM
--------------


2. (C) Bogatyrev has been telling us for some time that
President Bakiyev has no choice, but to move forward on
economic reform and market solutions to Kyrgyzstan's woes.
If he doesn't, Bogatyrev believes that Bakiyev will be a
one-term president, because the country's economic
difficulties are becoming increasingly acute. Bogatyrev said
he was very concerned with the slow movement on economic
reforms.


3. (C) Bogatyrev has previously told us that a small group,
including himself, had prepared a package of approximately 40
draft laws in December. The plan had been that in February,
these laws, which also included some laws on privatization,
would be passed quickly by a compliant parliament. Bogatyrev
expressed some frustration that the parliament, whose role,
he told us in January, would be limited to voting "da," was
asking questions, raising concerns, and to date had only
managed to pass one of the laws. (Note: Presidential
Economic Advisor Azamat Dikambayev provided a detailed
comments supporting the draft laws, known as the "New
Economic Policy," in a March 26 press interview. End Note.)


4. (C) Even worse, said Bogatyrev, government apparatchiks
were getting in on the act. Where Bogatyrev and his group
had tried to eliminate or minimize the role of the
government, the bureaucracy, nervous about losing control and
losing their jobs, was writing its role back into the
legislation. For example, he said, who would buy government
property if he could not sell it later without obtaining
government approval? Bogatyrev shared that Presidential
Chief of Staff Medet Sadyrkulov would call a government
meeting and crack heads in order to jumpstart economic
reform. (Comment: News reports corroborated this, showing
Sadyrkulov, that very afternoon, calling Ministers to
account. End Comment.)

PRIVATIZING THE BISHKEK ENERGY ASSETS
--------------


5. (C) According to Bogatyrev, the State Committee on
Property (Goskomimuchestvo) is doing a survey of the three
Bishkek energy assets, Severelektro, TETS, and the city
thermal heating network. He said, by April 10, the survey
will be completed and a tender let. By mid-May, Bogatyrev
claimed the assets would be sold. He acknowledged that the
process was rapid, but claimed that the sale was "already too
late." The energy problems that Kyrgyzstan suffered this
winter would occur again; the only solution was investment in

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the infrastructure, and the only way to get the money for
repairs and coal was through a private owner. The government
simply does not have the $90MM it will take. A quicker sale
would bring a quicker solution, so that next winter's weather
would not represent a threat. Bogatyrev also said that there
is some consideration being given to offering a $44MM per
year subsidy to the new owner of TETS, so that prices will
not be raised. Another solution might be to only raise the
prices for commercial buildings. (COMMENT: Energy Minister
Balkibekov told us recently that commercial rates would rise
at a different rate than individual rates, but all rates
would rise. (ref B) END COMMENT.)

POLITICAL CONCERNS ALSO
--------------


6. (C) Turning to politics, Bogatyrev dismissed the
Opposition as inept and declared, "They either can't do
anything or won't do anything." However, he is concerned
that the original economic reform schedule had legislation
and privatization moving forward early in the year, well
before the expected shocks of higher energy and food prices
hit the public in the late spring, but now everything is
converging. According to Bogatyrev, the push for painful
economic reforms will occur as the population is experiencing
higher prices during the spring, when the Opposition is
historically strongest and most vocal. He noted that the
Opposition has already made opposition to privatization their
one-item platform and that it is a popular platform, even
among pro-government Ak Zhol deputies.


7. (C) Bogatyrev also noted other government missteps that
could play into the hands of the Opposition: 1) The decision
by Bishkek City Mayor Daniyar Usenov to ban leased lands and
immediately sell all city land; this has many businesspeople
up in arms and organizing, since a large percentage of land
is leased and making such a move precipitously will incur
major hardship. 2) The government decision to cut
electricity in order to conserve water at the Toktogul
Reservoir, which is causing anxiety as Kyrygz wonder whether
their electricity will be cut and by how much. 3) The
announcement by the head of Kyrgyzlift that 140 elevators in
city apartment buildings would be put out of commission on
March 17, because they have reached the end of their service
life; Bogatyrev noted that March 17 is the sixth anniversary
of the Aksy events and if the elevators were really sidelined
Opposition leader Azimbek Beknazrov would have many
apartment-dwellers to add to his demonstration. (COMMENT:
In the event, there was no demonstration. END COMMENT.)


8. (C) Bogatyrev claims that he told Pesidential Chief of
Staff Medet Sadyrkulov that Kyrgyz bureaucrats are doing the
government in. He said that, "Any random event could cause a
problem," but the accumulation of mistakes was making him
"afraid." Bogatyrev said he told Sadyrkulov that given the
incompentence of the government, the Opposition, which
remains divided as each leader tries to position himself for
the Presidency, doesn't need to be either very united or very
smart.

PROBLEMS IN THE HOUSE OF AK ZHOL
--------------


9. (C) All is not well with pro-presidential party Ak Zhol
either, according to Bogatyrev. He said that Sadrykulov and
Presidential brother Janeesh Bakiyev are fighting over
control of the Ak Zhol Party. On April 4, there will be a
party congress, where it will become clearer who has the
upper hand. Among Ak Zhol parliamentary deputies, there are
splits among Speaker Adakhan Madumarov, Ak Zhol faction
leader Elmira Ibragimova, who is aligned with Sadyrkulov, and
Deputy Speaker Cholpon Bayekova. Bogatyrev said the fighting

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was personality driven and over control of resources. "It
will take time for a party that was artificially created" to
find its way, he said.

LEGACY? WE'LL THINK ABOUT IT LATER
--------------


10. (C) Bogatyrev said that his next task is the legacy
issue. He says that he told Bakiyev that he needs to turn
his attention to what the country will look like in 2015.
What kind of a legacy will he leave his country? Bogatyrev
said that as soon as the economic reform is finished, it will
be time, once more, to think about political reform, so that
Kyrgyzstan becomes a true democracy. According to Bogatyrev,
the President replied, "Yes, we need to think about that."

COMMENT
--------------


11. (C) We engage with Bogatyrev frequently, because he
often has the inside track on what is going to happen next.
Over the last six months, Bogatyrev has been absolutely
confident of where the country was headed; during this last
meeting, it is clear that it's been tougher to get there than
he thought it would be, and that he is very frustrated. In
January, Bogatyrev thought that everything was going the
government's way; now, he is wondering whether the government
can stay on course with economic reform without running into
major political backlash.


12. (C) We were also struck by his comment that "any random
event could cause a problem." We have often said that
Kyrgyzstan is not predictable, and that the political
structure is more fragile than it appears. Bogatyrev's more
cautious statements during this meeting would seem to
indicate that he, at least, is coming to believe this as
well.
YOVANOVITCH