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