TURKMEN GOVERNMENT ORGANIZES LAST MINUTE

C O N F I D E N T I A L SECTION 01 OF 03 ASHGABAT 001381

SIPDIS

STATE FOR SCA/CEN; EEB
ENERGY FOR EKIMOFF/BURPOE/COHEN
COMMERCE FOR EHOUSE

E.O. 12958: DECL: 10/29/2019
TAGS: ECON EIND EINV PGOV BEXP BTIO TX
SUBJECT: TURKMEN GOVERNMENT ORGANIZES LAST MINUTE
U.S.-TURKMENISTAN BUSINESS COUNCIL MEETING

REF: ASHGABAT 1270

Classified By: Charge Sylvia Reed Curran for reasons 1.4 (b) and (d).


1. (C) SUMMARY. On the margins of Turkmenistan Independence
Day celebrations, GOTX officials organized a last-minute
meeting of the U.S.-Turkmenistan Business Council in
Ashgabat. The meeting was a follow-up event to a dinner for
Turkmen President Berdimuhamedov hosted by the Business
Council in New York in September, when the President was
attending the UN General Assembly. At the dinner in New
York, Berdimuhamedov invited the Director of the Business
Council to attend Independence Day ceremonies in Ashgabat
after the Business Council Director reportedly made a
positive impression on the President. Turkmen Ambassador to
Washington Mered Orazov conducted the Ashgabat meeting in a
room packed with GOTX officials, including current Turkmen
Ambassadors who were in Ashgabat for Independence Day Events.
Representatives from a few U.S. companies were in attendance
and four, senior U.S. company representatives provided
remarks at the meeting. To date, the Turkmen government does
not accept the U.S.-Turkmenistan Business Council as a
private organization; instead, the GOTX considers the Council
to be an intergovernmental agency. Constant efforts to wean
the GOTX from giving preference to companies that are members
of the Business Council have been unsuccessful so far. END
SUMMARY.

U.S.-Turkmenistan Business Council Director in Ashgabat


2. (C) The Executive Director of the Washington-based U.S.
Turkmenistan Business Council was in Ashgabat at the
invitation of Turkmen President Berdimuhamedov to celebrate
Turkmen Independence Day. The Director of the Business
Council told the Charge on October 26 that he had to convince
the Council's Board of Directors to fund the trip to
Ashgabat. He reportedly stressed to the Board that turning
down the President's invitation could have a negative impact
on companies that are members of the Council. He added that
the Turkmen Ambassador to the United States Mered Orazov
organized several high-level meetings with GOTX officials
including a one-on-one with the President. The Council
Director stated that he was careful to keep to friendly
conversation with the President in lieu of bringing up
particular concerns of member-companies, in order to build a
relationship of trust with the country's ultimate decision
maker. He added that he had heard from the Desk that "the
President likes him." He hoped that his good relationship
with the President would provide an opportunity for him to
advocate on behalf of Business Council member-companies.
(NOTE: In Turkmenistan, the Head of the Turkmen Chamber of
Commerce is treated as a Minister, and the Director of the
Head of the U.S.-Turkmenistan Business Council was also
treated as a high-ranking U.S. official during his first trip
to Ashgabat. END NOTE.)

Last-Minute U.S.-Turkmenistan Business Council Meeting


3. (C) On October 24, MFA's America's Director Serdar
Bashimov mentioned to the Charge the idea of holding a
U.S.-Turkmenistan "business forum" that President
Berdimuhamedov might attend, sometime while the visiting U.S.
business leaders were in town. Charge encouraged that all
U.S. businesses present in Turkmenistan be invited, if the
idea was approved. Bashimov queried whether the local
offices were headed by Americans and stated that it would be
better to invite only Westerners. Charge said that there
should be no discrimination based on ethnicity; all American
companies should be invited. On October 26, Bashimov then
met with Economic Officer to go over a list of U.S.

ASHGABAT 00001381 002 OF 003


businesses operating in the country in order to identify
possible invitees to the Business. Bashimov stated
unequivocally that only U.S. companies that were members of
the U.S.-Turkmenistan Business Council could be invited. He
had not mentioned earlier that the event would be a meeting
of the U.S.-Turkmenistan Business Council. In addition, he
proceeded to scratch off names of U.S. companies that had
non-Westerners rather than U.S expats as managers, even if
those companies were members of the Business Council. He did
not scratch off the names of companies with Western managers,
even if the company was not a member of the U.S.-Turkmenistan
Business Council. Bashimov apologized, but added that "as a
question of protocol," he had no choice but to exclude
certain U.S. companies from the event.


4. (C) On October 28, Post received word that the President
would not attend the event, but Foreign Minister Meredov and
over 20 other ministers would be in attendance. Post was
also told that the Embassy could invite all U.S. companies to
attend the event, but after the meeting we were told that two
companies (Coca Cola and Caddo, both headed by non-Westerners
in Turkmenistan) were turned away at the door reportedly
because they were not members of the U.S.-Turkmenistan
Business Council. (NOTE: The representatives of two other
companies, one headed by an American and the other by a
German, although not members of the Business Council, were
allowed to enter the conference hall. END NOTE.) The
meeting was held in a large banquet hall at the President
Hotel and it was packed with Turkmen government officials.
We also noticed that many of the attendees were current
Turkmen ambassadors who were in the capital for Independence
Day or members of the World Association of Turkmen.


5. (C) Business Council Meeting organizers provided for
senior representatives of U.S. companies Boeing, Chevron,
John Deere, and Case New Holland to speak during the meeting
(NOTE: all four of these companies belong to the
U.S.-Turkmenistan Business Council. END NOTE.) All four
U.S. company representatives kept their comments short and
positive, while crediting the Turkmen President for his
initiatives and willingness to work with their respective
companies. Turkmen Minister of Economic and Development
Bashimmyrat Hojamammedov then praised the Turkmen President
for instituting reforms which insulated Turkmenistan from the
effects of the global economic crisis. Hojamammedov
maintained that foreign direct investment in Turkmenistan is
steadily increasing and that the GOTX's political and
financial support for small to medium businesses, the Avaza
Tourist Zone, and the President's rural development program
(a program designed to create hundreds of schools, hospitals,
clinics, cultural centers, and other social centers) have
created a positive business climate that U.S. businesses have
recognized and applauded.


6. (C) The Turkmen Head of the State Agency for the
Management and Use of Hydrocarbon Resources Yagshygeldi
Kakayev repeated the GOTX's policy of allowing foreign energy
companies to develop onshore hydrocarbon resources via
service contracts only. He encouraged U.S. companies to vie
for offshore blocks in the Caspian, stressing that there are
32 attractive blocks available to foreign investors. After
the meeting, Chevron representatives told us they were still
"delicately" pursuing onshore contracts with the GOTX,
despite the GOTX's current policy.


7. (C) Turkmen Minister of Agriculture Esenmyrat Orazgeldiyev
hailed U.S. companies John Deere and Case New Holland for
their agricultural equipment and training programs, noting
that cotton harvesting has become more efficient and
profitable due to U.S. equipment and technology. (NOTE: A

ASHGABAT 00001381 003 OF 003


video played during the Business Council meeting actually
showed Turkmen President Berdimuhamedov riding a John Deere
tractor. END NOTE.) The Agriculture Minister announced that
a forum for agricultural producers from CIS countries would
take place in Ashgabat on November 25-27, and he asserted
that U.S. company participation would be a key component to
the forum's success, while providing U.S. companies an
additional venue for displaying their equipment and
technology.

Turkmen Press Lauds Business Council Meeting


8. (C) Segments from the meeting also appeared on the
national television station WATAN and a description of the
meeting appeared in the government-produced newspaper
"Neutral Turkmenistan." In the state newspaper, the
U.S.-Turkmenistan Business Council meeting in Ashgabat was
described as "another step in strengthening beneficial
intergovernmental dialogue between the U.S. and
Turkmenistan." Turkmen media reports also stated, "The
American Business Council sent an elite delegation to
Ashgabat, which included vice-presidents of the biggest
American companies: Chevron, Boeing, Case New Holland, John
Deere, and others."


9. (C) COMMENT. The unexpected and last-minute meeting of
the U.S.-Turkmenistan Business Council in Ashgabat was hailed
as an initiative of President Berdimuhamedov by GOTX
officials. In reality, the President did not attend, and the
event was the brainchild of MFA Americas Director Bashimov.
It is clear that the GOTX considers the U.S.-Turkmenistan
Business Council to be associated with the U.S. government.
Although the event was a pleasant surprise for Business
Council member-companies vying for the President's ear, the
GOTX continues to treat U.S. companies which are not part of
that organization with suspicion (reftel). The recent event
showcased the GOTX's ability to pull together large,
high-profile events at the last minute, if it is something
the Turkmen believe the President wants. Although GOTX
officials and some U.S. companies lauded the last-minute
Business Council meeting, the GOTX does not show any signs of
retreating from its policy of treating foreign commercial
proposals as bilateral negotiations. END COMMENT.
CURRAN