TURKMENISTAN: DEPUTY FOREIGN MINISTER URGES MORE

C O N F I D E N T I A L SECTION 01 OF 02 ASHGABAT 000044 SIPDIS STATE FOR SCA/CEN, EEB E.O. 12958: DECL: 01/12/2019 TAGS: PGOV PREL ETRD ECON TX SUBJECT: TURKMENISTAN: DEPUTY FOREIGN MINISTER URGES MORE TRADE WITH UNITED STATES Classified By: Charge d'Affaires a.i. Richard Miles. Reasons 1.4 (B) a nd (D). ¶1. (C) SUMMARY: In a January 9 meeting with U.S. Trade Development Agency (TDA) Regional Director for Europe and Eurasia, Dan Stein, and Charge, Turkmenistan Deputy Foreign Minister, Wepa Hajiyev, expressed hope the Stein's visit would encourage more trade between Turkmenistan and the U.S. Hajiyev favorably cited South Korean companies' efforts as an example of trade development with Turkmenistan. He also urged formation of a comission to address bilateral trade. Hajiyev said Turkmenistan continues to address diversification of its energy routes. On the issue of U.S energy company executives' inability to obtain meetings with President Berdimuhamedov, Hajiyev said the companies needed to lay the groundwork for such meetings and should engage more at other levels of the hydrocarbon sector. In order to boost trade, word about business opportunities in Turkmenistan needs to reach U.S. companies. END SUMMARY. FOCUS ON IMPROVING BILATERAL TRADE TIES ¶2. (C) Hajyev noted that the TDA Regional Director's visit indicated that U.S. efforts to increase trade with Turkmenistan continue. Turkmenistan government policy during the past two years has been to further the country's international economic ties, including with the United States. He understood TDA's role in improving bilateral relations, and hoped that the upcoming TDA-sponsored information and communications technology study trip for Turkmen officials to the U.S. would facilitate commercial ties, especially through the participants' business meetings. He informed Stein that participation by Turkmenistan government officials in the study trip had been approved. BUSINESS WITH SOUTH KOREANS BOOMING ¶3. (C) Remarking the the Turkmen economy has specific characteristics, particularly the importance of state sector actors, the Deputy Foreign Minister suggested that the United States could share its experience as it relates to the specifics of the Turkmen economy. He also highlighted the use of bilateral commissions as a mechanism for achieving positive results. He referred to recent commercial advances by South Korean companies in Turkmenistan. In 2007, South Korean companies came to Turkmenistan and established real commercial contacts, "more than U.S. companies." Prior to 2007, South Korean presence had been negligible, but the companies themselves, together with a chamber of commerce and newly-established South Korean embassy, held meetings, studied the market, and were flexible. Visits by South Korean officials contributed to the forward progress, but now the companies operate on their own. GOTX READY FOR EXPANDED COOPERATION WITH THE U.S. ¶4. (C) According to Hajiyev, Turkmen external economic policy is multi-faceted, based on "the principles of economic rationality and consistency with local reality." He noted that since reforms began in 2007, they have completed currency reform and increased the tempo of economic reform overall. In sum, Hajiyev said the Turkmenistan government was ready to further expand cooperation with the United States and that the two sides needed to find concrete ways to accomplish it. He proposed the creation of a business council or commission and suggested that TDA could play a role. USG COMMITTED TO EXPANDED TRADE WITH TURKMENISTAN ¶5. (C) Stein confirmed that his visit signified a continuing U.S. commitment to developing trade ties with Turkmenistan. He noted the establishment of the U.S.-Turkmenistan Business Council, led by Executive Director, David Goldwyn, a person who knows Turkmenistan well. He also remarked that, in his ASHGABAT 00000044 002 OF 002 experience, bilateral economic commissions could be effective, but often failed to produce concrete results. The most effective commissions address narrow issues with the aim of achieving well-defined, concrete objectives. Stein then raised the current Russia-Ukraine gas dispute, pointing out that it highlighted the importance to producers of diversified export routes. DIVERSIFICATION OF GAS ROUTES A TURKMEN PRIORITY ¶6. (C) Hajiyev said it was sad that European countries were suffering and that it was in the interest of all sides to resolve the dispute positively. For the Turkmenistan government, diversification was and remained a priority. President Berdimuhamedov said the country will seriously work on diversification in all directions. The Turkmenistan government has taken steps with neighboring states and expected steps from other players "in a mutually beneficial way." In Hajiyev's view, the gas dispute would end soon because it was too expensive for the consumers, transit countries and suppliers to engage in an extended shutdown. He called for continued exchanges of opinion and dialogue until the dispute was resolved. ¶7. (C) Concerning the recent Turkmen-initiated UN resolution on pipeline reliability, Hajiyev thought that at the beginning stage, a framework for action would need to be developed and strengthened based on the specific items required for implementation. Once that took place, the pipeline reliabiity initiative would significantly reduce the risk of disputes such as that between Russia and Ukraine. U.S. ENERGY EXECUTIVES SHUT OUT FROM PRESIDENTIAL MEETINGS ¶8. (C) Stein and the Charge pointed out that many U.S. energy companies are interested in working in Turkmenistan and would like to send their top-level executives to meet with President Berdimuhamedov. However, they've repeatedly been unable to get approval for such meetings. Cited were recent requests made on behalf of senior Chevron and ConocoPhillips executives. A pattern seemed to be developing that Berdimuhamedov would meet with executives from non-U.S. companies, but not from ours, even though the U.S. executives are ready to meet. ¶9. (C) Hajiyev replied rather sharply that, when other meetings took place between Berdimuhamedov and executives, the companies in question had established the background for such meetings. He said there was a need to find beneficial ways for U.S. companies to lay the groundwork for such access, such as regular meetings by experts and lower-level company executives with other levels of Turkmen officials. He cited a proverb that, if one is not allowed through the door, better to find a way through the window than to keep knocking at the closed door. He suggested that there should be other ways to activate interaction between U.S. energy companies and the Turkmen hydrocarbon sector that would achieve the desired end result. ¶10. (C) COMMENT: In what was largely a brainstorming session about how to accelerate U.S.-Turkmen trade relations, the Deputy Foreign Minister advocated for a formal bilateral trade commission, which is a preferred Turkmen mechanism, but also noted South Korean companies' "flexibility" in successfully pursuing business in Turkmenistan. On the U.S. side, there is a need to raise the profile of the business opportunities that exist in Turkmenistan. TDA's upcoming ICT sector study trip will be a useful opportunity to introduce Turkmen officials to U.S. businessmen and vice versa, a role that the U.S.-Turkmenistan Business Council could also play with a broader U.S. audience. MILES