RUSSIAN AMBASSADOR ON PUTIN-KARIMOV MEETING

C O N F I D E N T I A L TASHKENT 000199

SIPDIS

SIPDIS

SCA/CEN FOR BRIAN RORAFF

E.O. 12958: DECL: 02/13/2018
TAGS: PREL PGOV EMIN ENRG ECON SNAR RS AF TI ZK UZ
SUBJECT: RUSSIAN AMBASSADOR ON PUTIN-KARIMOV MEETING

REF: TASHKENT 114

Classified By: Poloff Tim Buckley for reasons 1.4 (B) and (D)


1. (C) Summary: On February 11 the Ambassador called on
Russian Ambassador Farit Muhametshin to discuss President
Karimov's February 5-6 trip to Moscow, including his meeting
with Russian President Vladimir Putin. Muhametshin described
the trip as "nothing extraordinary" and said all meetings and
agreements were "absolutely open." In his meetings with
Putin and other officials, Karimov discussed security,
energy, trade, economic development, and even space
cooperation.


2. (C) Muhametshin expressed Russia's support for the Afghan
government of Hamid Karzai, noting a need "to fundamentally
support the Afghan economy and government in the face of
narco and terror threats." On Tajikistan, the Russian envoy
noted Russia "completely agrees" with Uzbek calls for
multilateral approval for major hydropower projects that
affect downstream countries. He also lamented outlandish
displays of wealth by the Tajik elite that draw attention to
disparities. As with a recent meeting between emboffs and
Chinese diplomats, the Russians were congenial and
appreciated the Ambassador's effort to consult with them on
Central Asia issues on which we have common ground. End
summary.

"Nothing Extraordinary"
--------------


3. (C) On February 11 the Ambassador called on his Russian
counterpart Muhametshin to get a report on Karimov's recent
visit to Moscow. Muhametshin was joined by Counselor
Vladimir Andriyanov and Second Secretary Kirill Belikov.
Despite earlier indications that Putin might have been
planning to visit Tashkent, Muhametshin confirmed that the
planned venue for the recent meeting was always Moscow. The
Russian envoy said the meeting was an "opportunity for both
Presidents to examine the relationship" between the two
countries and look for ways to build on their partnership.


4. (C) Muhametshin described the visit as "nothing
extraordinary" and the documents that were signed as "quite
typical." Muhametshin described the agreements as laying the
groundwork for "how we intend to cooperate with each other,"
and emphasized they were all "absolutely open." He noted
that the press conference at the conclusion of the visit was
short, underscoring the routine nature of the visit.
Muhametshin added that, in addition to Putin, Karimov met
with officials at the Ministry of Foreign Affairs, where the
two sides signed an agreement about "planned joint activity
in the framework of international organizations," and at the
Ministry of Defense. He made a point of noting that Foreign
Minister Sergei Lavrov was in Armenia at the time and
unavailable to meet with Karimov. However, Karimov did meet
with Deputy Prime Minister Sergei Borisovich Ivanov, whom
Muhametshin described as a driving force in "developing
relationships between peoples."

"First Meeting in Third Term"
--------------


5. (C) Muhametshin noted that this meeting was the first
meeting between the two leaders "since Karimov started his
third term" after winning the election in December.
(Comment: The Uzbeks glossed over the issue in the run-up to
elections and cited technicalities to support Karimov's
eligibility to be on the ballot; however the Government of
Uzbekistan does not refer to a third term since the Uzbek
Constitution stipulates a two-term limit. Muhametshin's word
choice indicates the Russians are not concerned about
justifying the constitutionality of Karimov's current
mandate. End comment.)

Energy
--------------


6. (C) Muhametshin noted that Russia and Uzbekistan have "big
energy projects connecting our countries," most notably ones
involving Gazprom and Lukoil's interests. The two Presidents
"further developed contacts along these lines," Muhametshin
continued, "including the industrialization of gas assets."
He said there were indeed negotiations on the price of gas
between the countries, but he emphasized this was worked out
before the New Year, and included discussions of what
Uzbekistan's internal consumption requirements for gas were
before deciding what quantity to sell. Muhametshin also
reminded us that everyone pays the market rate for gas now,
with no separate pricing for Commonwealth of Independent
States (CIS) members.


7. (C) According to Muhametshin, Lukoil has a new agreement
to extract gas from deposits in the Bukhara Region (also
reported in the press on February 12),and Russian companies
have invested USD 50 million in the Karakalpakstan Region of
northwest Uzbekistan. In general, Muhametshin confirmed
Russian companies are interested "in more new sources" of
energy. He also mentioned ongoing Chinese and Malaysian
involvement in Uzbekistan energy extraction.


8. (C) The topic of atomic energy also came up, and
Muhametshin noted that the Russians and Uzbeks have a joint
enterprise on the extraction of uranium in Uzbekistan. He
also suggested that Uzbekistan could be invited to
participate in more nuclear energy activities in Russia
(within UN frameworks) because it has uranium resources and a
capable nuclear center of its own. (Comment: The Government
of Uzbekistan has already committed to U.S. joint venture
Nukem and has relatively little room to cut additional deals.
Muhametshin mentioned a figure of 2,000 tons of uranium
extraction for a joint venture, which is the same quantity
promised to the American joint venture. We have already
heard reports Nukem is nervous about the Uzbeks coming
through with the promised quantity, and it would be nothing
new if the Uzbeks were also dealing with a Russian entity.
End comment.)

Aircraft Production
--------------


9. (C) Muhametshin described Russia's strong interest in the
Tapoich aircraft production factory in Uzbekistan. He said
that while the IL-114 mid-range propeller-driven passenger
plane is assembled in Uzbekistan, up to 80 percent of the
component parts originate at factories within the Russian
Federation. The Ambassador also noted a U.S. interest, as
American firms also have been involved in supplying
components to the Tapoich factory. This seemed to surprise
Muhametshin, who acknowledged that the factory's success is
"an area of mutual interest" for the U.S., Russia, and
Uzbekistan. He predicted long-term success at the factory
"due to modern technology at the plant," as well as
attractive fuel-efficiency that should contribute to strong
consumer demand for the IL-114 aircraft.

Economic Development
--------------


10. (C) One of the documents signed by Putin and Karimov
pertains to economic development, which Muhametshin described
as "a five-year plan of cooperation." The elements of the
deal were worked out last year, and Muhametshin stressed that
Russia "considers this a very important part of the bilateral
relationship." He specifically mentioned automobiles, rail
container cars, transportation equipment, and agricultural
machinery (tractors and combines) as key items the countries
expect to sell to each other. He added that "this type of
state-level cooperation -- with concrete ideas -- will
benefit the private sector companies" who wish to do
business. Muhametshin also mentioned that Karimov and Putin
reached an agreement about space cooperation, particularly
pertaining to Uzbek interests in satellites.


11. (C) Muhametshin also said there were also conversations
in Moscow with Karimov about the need to promote small and
mid-sized businesses here instead of just focusing on
big-ticket commodities like natural gas and cotton.
Muhametshin noted that this would help generate jobs in small
cities and rural areas throughout Uzbekistan that sorely need
investment. He also made the point that the cumulative
impact of successful small businesses could generate as much
income as one of the staple commodities Uzbekistan relies on
so much. (Note: Karimov delivered a major speech to his
Council of Ministers shortly after his return from Russia
focusing on economic reform, including the investment
climate, with practically the entire newspaper devoted to it.
We view this as a signal that Uzbekistan wants to encourage
more investment. Interestingly, while the Ministry of
Foreign Affairs was eager to find out about the U.S. and UK
reaction, the Russians were not asked what they thought,
indicating the speech was tailored for the West. End
comment.)

On Afghanistan
--------------


12. (C) Muhametshin said that Afghanistan was discussed
during the Putin-Karimov meeting last week, and cited the
drugs and terrorism originating in Afghanistan as "an area of
mutual concern and threat" for all affected countries (he
specifically mentioned Pakistan as well). He added "from the
Russian point of view there need to be optimal solutions. To
a maximum extent, we need to help the economy and Government
of Afghanistan in the fight against narco-aggression." This
reflects a policy distinction between Russia and Uzbekistan,
as Karimov favors removal of President Karzai and has bluntly
expressed this to recent visitors such as CENTCOM Commander
Admiral William Fallon (reftel). Muhametshin acknowledged
that, "slowly" (but surely),Afghanistan is developing and
that Russia is definitely interested in Afghanistan's
progress.

On Tajikistan
--------------


13. (C) Muhametshin emphatically confirmed that Uzbek
officials worry a lot about the balance between hydropower
generation in Tajikistan and the impact on Uzbekistan,
particularly concerning agricultural output. "And they worry
for good reason," he explained, as river levels are already
demonstrably lower in summer and agricultural output has
already been affected. He described this as "a real
concern," and noted the main Uzbek goal is to ensure that
"all future projects should be done according to
international expertise and not just unilateral Tajik
actions." Muhametshin also mentioned concern that Russian
companies cannot participate in Tajikistan's projects after a
decision by the Government of Tajikistan last year. Russia
"completely agrees with the Uzbeks" on this issue, according
to Muhametshin, and said tradeoffs in energy and agricultural
output must be balanced per the "agreement of all affected
parties."


14. (C) Muhametshin also lamented that President Rakhmon and
his cronies are making outlandish displays of their wealth
which draw attention to the disparities between members of
the ruling elite and impoverished masses. The Russian envoy
said this was especially troubling given the harsh winter
that is causing hardship for ordinary Tajiks. In addition to
expensive palace-like homes, Muhametshin noted that one of
President Rakhmon's brothers spent one hundred thousand
dollars on a Rolls-Royce used just for inauguration day,
which he said "is not good" and "is too different from real
life there." Nonetheless, Muhametshin noted Russia is
mobilizing relief for Tajiks afflicted by the severe winter
weather.


15. (C) Russia also remains concerned about the security
situation in the country, and Muhametshin mentioned the Tajik
Colonel who was recently killed by separatist groups in the
mountainous south-central region of Garm. He said this is
similar to incidents years ago when the security situation
was worse, and so creates "worries for us and you."

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


16. (C) One foreign ambassador has asked the pertinent
question: why did Karimov visit Moscow so close to the end
of Putin's term? We're not sure, but the answer may lie in
Karimov's perpetual quest to finely calibrate the balance
between Russian, Chinese, and Western influence in Central
Asia. Having welcomed CENTCOM Commander Admiral Fallon to
Tashkent on January 24, and knowing the visit would fuel --
as it has -- speculation about the return of U.S. bases to
Uzbekistan, Karimov may have wanted to signal to all
concerned that any rapprochement with the U.S. will not be at
the expense of continued close relations with Russia.
Karimov has had a good relationship with Putin; his ties to
Medvedyev appear more tenuous (Muhametshin says the two did
not meet on this visit) and Karimov may have decided to try
to lock in his gains with Russia while he can. As one
diplomat here joked recently, there is probably more talk
about Uzbek "regime change" in Moscow than there is in the
West.

NORLAND