TURKMENISTAN: POST HOSTS ENTREPRENEURSHIP

C O N F I D E N T I A L SECTION 01 OF 02 ASHGABAT 001652 SIPDIS STATE FOR SCA/CEN; EEB; S/P FOR GBERHMAN; S/SRMC FOR KCHANDLER; R FOR SNOOR-ALI COMMERCE FOR DSTARKS/EHOUSE E.O. 12958: DECL: 12/23/2019 TAGS: ECON PGOV EINV BEXP BTIO TX SUBJECT: TURKMENISTAN: POST HOSTS ENTREPRENEURSHIP ROUNDTABLE REF: STATE 112495 Classified By: Charge Sylvia Reed Curran for reasons 1.4 (b) and (d). ¶1. (C) On December 22, Post hosted a roundtable to discuss entrepreneurial issues in Turkmenistan with private, independent Turkmen business people. The roundtable was held in accordance with action items per reftel. Turkmen entrepreneurs who participated in the roundtable are successful, wealthy entrepreneurs. All of them received university degrees outside of Turkmenistan. One is a former movie director, who started his own construction business in 1996 as a subcontractor for large, Turkish construction companies in Ashgabat. He now reportedly owns the largest, non-foreign, construction company in Turkmenistan, Bally construction. Another is the director of a chain of supermarkets, officially owned by her parents. Her company, Ak Enar, owns and operates five supermarkets in Ashgabat and recently received a loan from EBRD to open an additional twelve stores throughout the country. Another participant owns a large international transportation company; he claimed that his company is the only Turkmen-owned company that can compete with well known, international transportation and logistics companies. The fourth participant started out as a waiter; twelve years later, he now owns two of the most popular restaurants in Ashgabat. ¶2. (C) Roundtable participants started the discussion by praising the Government of Turkmenistan's (GOTX) laws and initiatives designed to assist small and mid-sized enterprises, and their businesses have benefited from these reforms. They added that the Turkmen business climate has improved "a hundredfold" since current President Berdimuhamedov took office in 2007. They noted that there are few Turkmen owned private companies, asserting that most successful entrepreneurs in the country were educated outside of Turkmenistan, which allowed them to attain contemporary marketing, managing, and customer service skills needed to be successful. They lamented that most Turkmen have no idea how to start their own business, especially if they have not lived and studied in a country with a more developed economy. They suggested that the greatest contribution the U.S. could provide to would-be Turkmen entrepreneurs is a high-quality business education by opening educational institutions in Turkmenistan. They added that the Turkmen Ministry of Education would not currently support such programs, but they planned to continue to press their government contacts to push the idea up to the President, as the President is the country's ultimate decision maker. They felt there was a large market for university and professional degrees as well as sector-specific training in Turkmenistan, adding that U.S. companies and institutions should seek to fill that growing demand. ¶3. (C) After about an hour of discussion, roundtable participants started to converse more openly. They acknowledged that Turkmen bureaucracy requires private businesses to employ skilled attorneys who can mitigate ambiguous national, regional, and local laws and regulations. Aspiring entrepreneurs, they added, often get frustrated by the huge amount of bureaucracy and corruption, often giving up on opening their own businesses. They suggested that less educated entrepreneurs are not savvy enough to deal with experienced bureaucrats, and as a result often end up paying large portions of their profits in bribes. Participants were also eager to learn about trade shows in the United States that they could attend in 2010, stressing that since Turkmenistan is fairly isolated, foreign trade shows would help Turkmen entrepreneurs gain access to the latest technologies and best business practices in their respective ASHGABAT 00001652 002 OF 002 fields. Participants applauded the Presidential Entrepreneurship Summit to be held in Washington in 2010 (reftel),opining that commercial relations between Turkmenistan and the U.S. were improving steadily. ¶4. (C) COMMENT: Post originally had eight confirmed attendees until hours before the event, when four confirmed attendees suddenly had important meetings at the same time. Post believes that the four entrepreneurs, who initially seemed enthusiastic about the event, but canceled at the last minute, were most likely told by government officials not to attend. The four Turkmen entrepreneurs who did attend hinted that there was some pressure not to attend the event, but they would not elaborate. Although only four Turkmen entrepreneurs attended the roundtable, the participants eventually warmed-up and began to discuss the overall business climate in Turkmenistan more objectively. They were pleased to learn of President Obama's efforts to reach out to Muslim-majority countries like Turkmenistan. They stressed that a gross lack of quality education has stymied entrepreneurship and not the President of Turkmenistan. They genuinely felt that the GOTX hopes to build its own cadre of Turkmen businesses, so that the country is not so reliant on foreign companies for goods and services. At the same time, they stated that the GOTX needs to foster a freer exchange of business ideals and practices among private foreign companies and private Turkmen businesses, instead of treating commercial issues as high-level, bilateral negotiations. END COMMENT. CURRAN