KYRGYZ INSIDER SEES MERCANTILE INTERESTS

C O N F I D E N T I A L SECTION 01 OF 02 BISHKEK 000517 SIPDIS DEPT FOR SCA/CEN E.O. 12958: DECL: 05/28/2019 TAGS: PGOV PREL PINR KG SUBJECT: KYRGYZ INSIDER SEES MERCANTILE INTERESTS DOMINATING POLICY DECISIONS REF: BISHKEK 494 BISHKEK 00000517 001.2 OF 002 Classified By: Amb. Tatiana Gfoeller, Reason 1.4 (b) and (d). ¶1. (C) Summary: According to a Kyrgyz White House official, "mercantile" personal financial interests dominate virtually all policy-making among the Kyrgyz political elite. The official, Sapar Isakov (strictly protect),who was close to former Presidential Chief of Staff Medet Sadyrkulov, said Sadyrkulov had opposed closure of Manas Air Base. Isakov added that he himself viewed the Base closure as limiting Kyrgyzstan's options. Isakov expects to be purged from the Administration, along with other officials, following President Bakiyev's anticipated reelection this summer. He also noted that the Kyrgyz s cret services want to revise the bilateral assistance agreement with the United States to lift "immunity" of U.S. assistance implementers. End summary. ¶2. (C) In a mid-May meeting, Sapar Isakov, Prime Minister Chudinov's International Cooperation Department Chief and Chair of the Kyrgyz Secretariat for Millennium Challenge activities, moved beyond the original focus of the meeting (to discuss Millennium Challenge-related issues) to express concerns about governance in Kyrgyzstan. Sadyrkulov's Exit and Manas Air Base -------------- ¶3. (C) Isakov believed that Medet Sadyrkulov's late 2008 resignation from his position as President Bakiyev's Chief of Staff permitted "mercantile" personal financial interests among the Kyrgyz leadership to dominate policy-making. He said the course was set on October 7, 2008 when, he claimed, Kyrgyzstan had sealed the deal with Russia on Russian financial assistance (and presumably closure of Manas Air Base.) Sadyrkulov, Isakov noted, opposed such close ties to Moscow, but was overruled. ¶4. (C) "The Russians," Isakov claimed, "would not keep their side of the deal, as they had done before." (Comment: Moscow has delivered $450 million in assistance as well as forgiven outstanding bilateral debt. However, Embassy is not aware of any progress on Russia's $1.7 billion commitment to the Kambarata-1 hydroelectric plant construction project. End Comment.) Although Isakov considered the Base's closure a foregone conclusion, he also argued that this step limited Kyrgyzstan's options. However, he reiterated the point that, subsequent to Sadyrkulov's removal, all decisions, even over minor issues, are now based on the financial considerations of Kyrgyzstan's leaders. "Sadyrkulov was the only one in the inner circle who cared about the country; for everyone else the only thing that matters is personal gain," Isakov said. FM Sarbayev's Motivations -------------- ¶5. (C) Isakov praised former Foreign Minister Ednan Karabayev for disagreeing with the decision to close Manas Air Base, and commented that new Foreign Minister Kadyrbek Sarbayev had been driven by his undefined "business interests" to work for Bakiyev's Administration. While not elaborating on Sarbayev's business interests, Isakov said that "business in Kyrgyzstan is like being in a swamp, and being drawn in to it." (Note: Sarbayev previously served as Ambassador to China and Deputy Foreign Minister, but there is no public information about any business interests he might have. He has personally forcefully denied that he has any to the Ambassador. End Note.) Presidential Election and Purges -------------- ¶6. (C) Isakov expected the July 23 Presidential election to BISHKEK 00000517 002.2 OF 002 result in Bakiyev's reelection, but also indicated that, prior to his death, Sadyrkulov had been planning some form of opposition to Bakiyev. He said he was certain that Sadyrkulov had garnered Kazakh President Nazarbayev's support, as well as unspecified, but "very serious," support from Russia. Isakov noted the efforts of former Deputy Prime Minister Elmira Ibraimova to oppose Bakiyev, but concluded that she had no chance of success in the current situation (see reftel). He added that following Bakiyev's expected reelection, his August 1 60th birthday celebration, and the Presidential inauguration, there would be a government restructuring and personnel purge. Isakov said that he expected to be pushed out by October, even though Prime Minister Chudinov had taken steps to protect him from previous efforts to evict him from the Kyrgyz White House. Immunity -------------- ¶7. (C) Isakov said that the Kyrgyz s cret services wanted the 1993 bilateral assistance agreement between the United States and Kyrgyzstan revised, largely due to a desire "to lift immunity to allow the Kyrgyz government to deal with the National Democratic Institute (NDI)." While he also identified lingering issues over tax and social fund payments by assistance implementers as irritants, Isakov stressed the issue of "immunity" repeatedly. (Comment: The bilateral assistance agreement does not confer immunity to implementers like NDI, rather it exempts them from certain taxes and fees. The Embassy is, however, aware of longstanding Kyrgyz displeasure with NDI activities. End Comment.) Comment -------------- ¶8. (C) Isakov was one of Medet Sadyrkulov's proteges, many of whom have resigned or been sacked in recent months. Therefore, his comments may simply reflect concern about both Kyrgyzstan's future and his own prospects outside of government. Many of Isakov's observations, such as the "mercantilist" trend of Kyrgyz decision-making, track with feedback Embassy has heard elsewhere. However, other comments, such as speculation regarding Foreign Minister Sarbayev's "business interests" are difficult to substantiate, and should not be accepted as completely accurate. As noted above, Sarbayev himself has denied to the Ambassador that he has any outside business interests, but it is widely assumed that his tenure as Ambassador to China gave him influence over lucrative trade deals. GFOELLER