THE GOR'S "SECRET" VISIT TO KYRGYZSTAN

UNCLAS MOSCOW 001827

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PREL PGOV MARR MCAP EINV EMIN RS KG

SUBJECT: THE GOR'S "SECRET" VISIT TO KYRGYZSTAN


1. (SBU) Summary: On July 7 Russian Minister of Defense Anatoliy
Serdyukov and Deputy Prime Minister Igor Sechin made a brief,
unannounced visit to Kyrgyzstan to discuss Russia's interest in
opening a second Russian military base in the southern Kyrgyz city
of Osh. The base is expected to house Russian forces under the
aegis of the recently created Collective Security Treaty
Organization (CSTO) rapid reaction force. Experts consider the base
to be a response to the growing U.S. presence in Central Asia, and
shared Kyrgyz and Russian concern for Islamic extremism and the
growing regional narcotics trade. End Summary.

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A Second Russian Base in Kyrgyzstan
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2. (SBU) After visiting Dushanbe, MinDef Anatoliy Serdyukov and DPM
Sechin briefly visited Bishkek on July 7 to hold closed talks with
Kyrgyz President Kurmanbek Bakiev and Prime Minister Igor Chunidov.
According to press reports, they mainly discussed Russia's interest
in opening a second Russian military base in the southern city of
Osh. Russia intends to use an abandoned Soviet-era military
facility near Osh as a basis for a new military base that will
largely house Russian air force and airborne units. The Russian MFA
downplayed the significance of the visit by stating that Russia had
established basing rights in Kyrgyzstan in a 2003 agreement.

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Russia Threatened by U.S. Presence in Central Asia
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3. (SBU) Kyrgyzstan is the only country in the world that houses
both Russian and U.S. bases; Russia already occupies the Kant Air
Base near Bishkek. Seeking to offset U.S. influence in Central Asia
and assert Russian influence in Kyrgyzstan following the GOK's
acceptance of a continued U.S. military presence in Manas, experts
considered Russia's request for a second base in Osh to be a product
of Russia's concern over a growing U.S. presence in the
strategically important region bordering Afghanistan. Experts
further noted that an expanded Russian military presence in
Kyrgyzstan would supplement Kyrgyzstan's weak military and help
Russia fight against threats such as Islamic extremism and the
growing narcotics trade.

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Military-Economic Quid-pro-Quo
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4. (SBU) During the July 7 talks it was agreed that the GOR
(presumably Rosboronexport) would receive significant stock in a
number of Kyrgyz defense industries, in particular, controlling
stake in a Dastan Corporation torpedo producing factory located near
Lake Issyk-Kul. (Note: in a February 2009 agreement, Moscow
obtained a 48% controlling stake in Dastan in exchange for writing
off Kyrgyz debt owed to Russia). The Dastan plant is the only
factory in the CIS that produces the VA-111 Shkval missile torpedo.
Experts posited that the stock was given to elicit Russian favor for
moving forward with the previously announced Russian debt
concessions and financial credits given to Kyrgyzstan, including for
the construction of the Kambaratinsk Hydroelectric Dam in central
Kyrgyzstan.


5. (SBU) Experts speculated that the two countries also discussed
Russia's interest in the privatization of the Kyrgyz energy firm
Kyrgyzgaz and possible Russian investment in the recently opened
Kyrgyz Tash-Kumrskogo plant that produces inexpensive high-quality
polycrystalline silicon. The silicon plant however, is not yet
producing at full potential; plant owners are seeking an added
investment of USD 200 million dollars.

BEYRLE