TURKMENISTAN: COMMERCIAL EXPO REAFFIRMS TURKISH

C O N F I D E N T I A L SECTION 01 OF 02 ASHGABAT 001121 SIPDIS SCA/CEN; EEB COMMERCE FOR ELLEN HOUSE E.O. 12958: DECL: 09/03/2019 TAGS: PGOV EIND EINV ECON ETRD TU TX SUBJECT: TURKMENISTAN: COMMERCIAL EXPO REAFFIRMS TURKISH PRESENCE IN COUNTRY Classified By: Charge Sylvia Reed Curran for reasons 1.4 (b) and (d). ¶1. (C) SUMMARY. On September 2, Economic Officer attended the opening of the Turkish National Export Exhibition in Ashgabat. The Turkish government sent State Minister for Trade and Industry Mehmet Zafer Caglayan to co-open the event with Turkmen officials. Almost 70 Turkish companies were present at the Expo, and their products and services covered a wide range-- from cookies to cement truck pumps. The Expo took place amid rumors that Turkmen President Berdimuhamedov would like to see the number of Turkish companies reduced in Turkmenistan, in order to reduce Turkey's substantial commercial influence in the country. Turkish diplomats denied any such rumors; but admitted that Turkey's "biggest and brightest" companies are not yet fully convinced that doing business in Turkmenistan is worth the risk. END SUMMARY. ¶2. (SBU) Speeches by Turkmen Deputy Chairman for Trade and Textiles Hojamuhammet Muhammedov and Turkish State Minister Caglayan, indicated that the Turkmen and Turks share a unique cultural understanding, allowing them to maintain good relations, especially in the commercial sector. Both speakers alluded to the many beautiful buildings sprouting up all over Ashgabat as the majority of them are Turkish-built. While joining Turkmen and Turkish officials on a tour of the Expo, it became immediately clear that the majority of the booths belonged to Turkish construction companies and building supply firms. Turkish-produced metal, siding, paint, lighting, tile, office furniture, and construction equipment were proudly on display. The widely known NATA Group had the most elaborate and largest booth, displaying the many construction projects it had completed around the world. Not to be outdone, the Turkish cookie and confection company Pastaci was busy handing out hundreds of Turkish made sweets, which many Turkmen at the Expo said were the best in the country. ¶3. (C) There was discussion among foreign diplomats at the Expo regarding rumors that the Turkmen President intends to lesson Turkey's commercial presence in the country. Russian Embassy Economic and Commercial Officer Alexander Akulenko told us that Turkey had done well to grab the bulk of the Turkmen construction contracts and not "create international scandals," by publicly complaining when the Turkmen delayed payment of millions of dollars for several months. Akulenko stated that the Turkish have probably "figured out the Turkmen for now," thanks to cultural, historic, religious, and linguistic ties, but that the Russian government is "having a difficult time determining what the Turkmen really want." Akulenko added that more and more Russian companies are used to doing business with Western firms and have learned what to expect, but the Turkmen "have become more and more unpredictable." Akulenko opined that the Turkish Export Exhibition was simply another "expensive overture" by Turkey to eventually get access to Turkmen gas. He also stated that the GOTX is becoming more and more leery of any one country gaining too much influence in Turkmenistan. ¶4. (C) Turkish Embassy DCM Hakan Cengiz told us that Turkmen and Turkish relations are very good, and he knew nothing of rumors that Berdimuhamedov was concerned by the number of Turkish companies in the country. Cengiz clarified that he had heard complaints from GOTX officials that mostly second-tier Turkish companies were interested in doing business in Turkmenistan, a situation that had offended some Turkmen officials. He noted that some Turkish firms still view Turkmenistan as a risky market, given that the GOTX can be very unpredictable toward foreign companies, and the Turkmen have a reputation for paying for goods and services months after delivery. He repeated that the Turkish ASHGABAT 00001121 002 OF 002 government was trying to encourage its biggest and brightest companies to invest in Turkmenistan, and the attendance of Turkey's State Minister for Trade and Industry at the Expo was proof of Turkey's commitment to Turkmenistan. He stressed that the Export Exhibition demonstrates how many Turkish companies are actively working in the country, adding that the Turkish government strongly supports an even more robust commercial relationship with Turkmenistan. ¶5. (C) COMMENT. The Turkish Export Exhibition is the first exhibition in Turkmenistan solely dedicated to the goods and services of one exporter country. The Turks have made it clear that they have great plans for increasing their already large commercial presence in Turkmenistan. At the same time, the GOTX policy of "Positive Neutrality" might not allow for any one foreign country to extend its influence in Turkmenistan too much. For now, the Turks have the reputation of dominating the markets for many goods and services in Turkmenistan. However, in an autocratic state, if the president decides that Turkey's influence is getting to large, he could send some of Turkey's businesses packing. END COMMENT. CURRAN