TURKMENISTAN: PAKISTAN BANK UPBEAT ON TURKMEN

C O N F I D E N T I A L ASHGABAT 001046

SIPDIS

STATE FOR SCA/CEN; EEB
COMMERCE FOR ESHOUSE

E.O. 12958: DECL: 08/18/2019
TAGS: PGOV EIND EINV ECON TX
SUBJECT: TURKMENISTAN: PAKISTAN BANK UPBEAT ON TURKMEN
OPPORTUNITIES

REF: ASHGABAT 769

Classified By: Charge Richard Miles, reasons 1.4 (b) and (d).


1. (C) On August 18, the new director of the National Bank of
Pakistan (NBP) branch in Ashgabat, Jamal Malik, met with
Economic Officer to discuss business in Turkmenistan. Malik
became the Bank's new director after replacing long-time
Embassy contact, Rizwan Khan, last week. Malik worked at NBP
Ashgabat for eighteen months before taking over, noting that
the banking and overall business climate in Turkmenistan had
improved greatly in less than two years. Malik stated that
although Turkmenistan's banking regulations are intrusive and
corruption exists on many levels, NBP Ashgabat has a
well-educated local staff that laboriously ensures that all
GOTX requirements are met to the letter. Moreover, he added,
NBP is seriously considering opening another branch in
Turkmenistan given that business is going so well.


2. (C) Malik highlighted that NBP enjoys commercial bank
status in Turkmenistan, which is not an easy accomplishment
for foreign banks. As a commercial bank in Turkmenistan, NBP
is able to provide loans for various projects throughout the
country, including projects in the Avaza National Tourism
Zone, located just north of Turkmenbashy on the Caspian coast
(reftel). Malik asserted that because of Avaza, the GOTX
seems more willing than ever to work with foreign companies
and is making some changes to attract investment from
countries in addition to Turkey. Malik reported that an
anonymous official at the GOTX told him that the visa regime
for foreign visitors was going to be relaxed to attract
tourists to Avaza. (NOTE: Officials had earlier told us,
including at the opening of the Avaza Tourist Zone earlier
this year, that the visa regime would not be liberalized for
tourists headed to the Avaza. END NOTE.) Malik also pointed
to the introduction of pilot debit card services at several
local Turkmen banks and the opportunity for Turkmen
businesses to accept credit cards in the near future as
additional changes the GOTX was considering.


3. (C) When asked about the overall economic situation in
Turkmenistan, Malik stated that the GOTX in retrospect did
the right thing in redenominating its currency on January 1,

2009. Malik added that the isolated Turkmen economy remains
insulated from negative global economic trends, adding that
Turkmen Central Bank reserves and the increased price of oil
sufficiently buffered the impact of the lack of Russian cash
for gas since April. In fact, he opined that since Russia
has stopped gas purchases, the GOTX must look to other
hydrocarbon customers and other foreign investment which
will, over time, improve the overall business climate.


4. (C) COMMENT: Malik admitted that the NBP enjoys a good
working relationship with the GOTX due to extensive diplomacy
on behalf of the bank by the Pakistani Government and the
NBP's eagerness to meet all government regulations without
hesitation. In addition, his unusually positive attitude
toward restrictive regulations that require extensive
government knowledge of all banking transactions is clearly
the exception and not the rule. At the same time, Malik is
not alone in noticing that Turkmenistan's ambitious
commercial projects will not be completed without foreign
investment and know how, and that those wishing to do
business in Turkmenistan will have to follow all the rules in
order to get a piece of that business. END COMMENT.
MILES