C O N F I D E N T I A L SECTION 01 OF 02 ASHGABAT 001665

SIPDIS

STATE FOR SCA/CEN, EEB

E.O. 12958: DECL: 12/28/2019
TAGS: EAID ETRD PREL JA TX
SUBJECT: TURKMEN PRESIDENT'S VISIT TO JAPAN NOT A PANACEA
FOR JAPANESE COMPANIES

REF: A. ASHGABAT 1060

B. ASHGABAT 1286

Classified By: Charge d'Affaires Sylvia Reed Curran. Reasons 1.4 (B) a
nd (D).


1. (C) SUMMARY: Turkmen media spent several days giving
headline coverage to President Berdimuhamedov's recent visit
to Japan. Although they painted the trip as successful, a
Japanese Embassy official was more cautious, saying that the
visit was more productive economically than politically.
Even in the commercial realm, while Japanese companies signed
agreements with the Turkmen Government, those deals were not
purchase contracts and did not afford the companies any
guarantees. Still, engagement at a high level seems the only
way to get one's foot in the door with the Turkmen
government, and the Japanese scripted a visit that
demonstrated to the Turkmen that Japan is serious about
advancing their relationship. END SUMMARY.

FEW POLITICAL AGREEMENTS


2. (U) Turkmenistan President Berdimuhamedov traveled to
Japan from December 16-18 on his first presidential visit to
that country. Turkmen state-run newspapers ran front page
stories during the visit, which showed pictures of
Berdimuhamedov with Prime Minister Hatoyama, Emperor Akihito,
and a range of executives of Japanese companies. The
newspaper coverage focused on the growing political and
economic relationship between the two countries and listed
numerous examples including the Japanese Embassy in Ashgabat,
the continued meetings of the bilateral economic commission,
the new projects that the Japanese International Cooperation
Agency (JICA) has started, and Berdimuhamedov's meetings with
private Japanese companies, including Mitsubishi, Kawasaki,
Sojitz, and Komatsu.


3. (C) Tetsuro Chida, the Special Advisor to the Charge of
Affaires at the Japanese Embassy in Ashgabat, related to
Poloff Japan's views on the visit of Berdimuhamedov to Japan.
He said that the visit was more successful economically that
it was politically. Two political agreements were signed
during the three-day trip, which Chida assessed as "not

many." Berdimuhamedov and the Japanese Prime Minister signed
a joint statement, and the Ministries of Foreign Affairs
concluded an agreement on cooperation. Other planned
agreements, including one on technical cooperation, were not
signed because the two sides were not able to finalize the
details. Chida added that JICA had hoped to sign agreements
with the Turkmen Government on a seismology study and the
modernization of the port at Turkmenbashi (Ref A), but
details were still being discussed. He hoped the agreements
would be ready by March.

MORE ECONOMIC DEALS


4. (C) Chida said that the visit was more successful
economically because the bilateral economic commission met
for the eighth time (Ref B), and because private companies
signed a total of four deals with the Turkmen Government. As
part of the bilateral economic commission, the Turkmen and
Japanese Governments signed a protocol document and an
agreement on development in the fields of economics and
statistics. Chida noted that the development project would
be implemented by private companies on the Japanese side, but
the Turkmen partner would, of course, be the government.

5. (C) Three of the four deals signed by Japanese companies
were for projects at chemical factories. Sojitz Corporation
was offered a project valued at $600 million at a factory in
Mary. The Turkmen Government would use money from the
Japanese Development Bank to finance this project. Two other

ASHGABAT 00001665 002 OF 002


projects were in Tejen and in Balkan province. In addition,
Japanese companies Itochu and JGC entered into agreements
with TurkmenGas on projects in Turkmenbashi. Chida placed
several caveats on his positive assessment of these deals.
The first was that he did not know all the details of private
companies' agreements. The second was that none of these
deals were contracts. Most of these projects could be
considered to be still at the beginning stages. By way of
emphasizing that point, Chida mentioned that Japanese company
Komatsu in 2008 had signed an agreement with the Turkmen
Government for 200 tractors. Komatsu thought the agreement
was definite, but the Turkmen Government did not buy the
tractors. Komatsu still has a negative attitude about doing
business in Turkmenistan, although they did put a lot of
money into Berdimuhamedov's visit.


6. (C) Poloff asked Chida if Turkmenistan had bought 1,000
taxis from Japanese companies, as was rumored. Chida said
that there had been some problems that prevented a final
deal. An agreement, but not contract, had been signed
between the Turkmen Government and Toyota in February 2009.
However, the price that the Turkmen Government offered was
too low, and they wanted to buy directly from Japan, whereas
Toyota wanted to sell the cars the "normal way," through the
dealership in Ashgabat. Chida did not say that there would
be no deal, but he did imply that many problems would need to
be smoothed out before one was concluded.

TURKMEN STUDENTS TO JAPAN


7. (C) Veering off the topic of the visit, Chida asked Poloff
if Embassy Ashgabat usually reported the names of Turkmen
students traveling to the United States to the Ministry of
Education. He said that last year the Japanese Government
had sponsored one Turkmen student to go to university in
Japan, and that student was hand-picked by the Turkmen
Government. Next year, the Japanese Embassy plans to send
three Turkmen students to Japan for Master's degrees in
various specialties, including energy and Japanese language.
This time the Japanese Embassy chose the students, not the
Turkmen Government, and the Ministry of Education is
requesting the students names. Chida said his Embassy had
not yet decided whether to honor the Ministry's request.


8. (C) COMMENT: Berdimuhamedov's visit to Tokyo was a perfect
occasion for Turkmen state media to portray the president as
a "world leader," highlighting meetings with the prime
minister and emperor. However, appearances aside, the
Japanese were not able to finalize key deliverables,
especially in the non-commercial sphere. Even on the
business side, Japanese companies weren't able to get firm
commitments from the Turkmen Government, but only agreements
to draft projects that may or may not lead to further
business, as Komatsu's experience illustrates. Still,
engagement at a high level seems the only way to get one's
foot in the door with the Turkmen government, and the
Japanese scripted a visit that demonstrated to the Turkmen
that Japan is serious about advancing their relationship.
END COMMENT.
CURRAN