Uzbekistan: Tashkent Tidbits - October 26, 2009

C O N F I D E N T I A L SECTION 01 OF 02 TASHKENT 001551

SIPDIS
AMEMBASSY ASTANA PASS TO USOFFICE ALMATY
AMEMBASSY HELSINKI PASS TO AMCONSUL ST PETERSBURG
AMEMBASSY MOSCOW PASS TO AMCONSUL VLADIVOSTOK
AMEMBASSY MOSCOW PASS TO AMCONSUL YEKATERINBURG
AMEMBASSY BELGRADE PASS TO AMEMBASSY PODGORICA
AMEMBASSY ATHENS PASS TO AMCONSUL THESSALONIKI

E.O. 12958: DECL: 2019/10/27
TAGS: PGOV PREL ECON UZ
SUBJECT: Uzbekistan: Tashkent Tidbits - October 26, 2009

CLASSIFIED BY: Nicholas Berliner, Pol Econ Chief; REASON: 1.4(B),(D)

EU Set to Lift Last Andijon Sanctions on Uzbekistan

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1. (C) According to both EU Embassy diplomatic contacts in Tashkent
and press reporting, the EU looks set to lift its arms embargo on
Uzbekistan, the last of the Andijon-related sanctions that remains
since Brussels lifted the visa and travel ban in 2008. Although
there apparently is not unanimity on this issue in the Council, the
sanctions will expire without a consensus to re-impose them, which
Germany and several other countries will not support. We were told
that this came about when Germany had previously tried to gather
support to lift the sanctions, but Swedish FM Bildt had insisted at
that time that any change would require consensus. Having reached
their sunset provision, the sanctions will now expire without
consensus under the Swedish EU Presidency. EU diplomats on the
ground feel that sanctions have been largely counterproductive and
consider that continued engagement is the only way to work towards
positive change in Uzbekistan.



GOU Keeps Score with EU Countries

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2. (C) The GOU is generally dismissive of the EU and prefers to
deal with its member states on a bilateral basis. Even as Brussels
prepares to let sanctions expire, the GOU is watching the positions
of individual member states. The Czech DCM in Tashkent, whom the
GOU had threatened to expel recently for human rights advocacy,
told PE Chief last week that his Embassy had been asked by the MFA
to explain Czech opposition to lifting sanctions - despite the fact
that it is a certainty that the sanctions will be allowed to expire
regardless of the Czech position. The UK and other EU members who
have advocated for maintaining sanctions also expect to get the
cold shoulder in Tashkent for a while.



THE NAVOI FIEZ FAIR: IS ANYONE BUYING?

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3. (SBU) The Ministry of Foreign Economic Relations, Investment,
and Trade (MFERIT) sponsored a conference this week on investment
in the Navoi Free Industrial Economic Zone (FIEZ) (reftel). The
event, co-sponsored by the Asian Development Bank and Islamic
Development Bank, was well attended by the diplomatic corps, but
investors did not appear in force. Thematic afternoon panel
sessions were sparsely attended. The only U.S. company represented
was Honeywell, which was in country to explore business
opportunities and participated in the conference as a side event.
The Russian Deputy Trade Representative told us that the only
Russian companies at the conference were Lukoil and Gazprom.




4. (SBU) Although this week's conference may not have met its
organizer's hopes, the Navoi FIEZ is one of the more interesting
projects undertaken by the GOU this year. With facilities and
infrastructure rapidly falling into place, we expect the FIEZ will
find its investors. To date it has been mainly South Korean
companies that have concluded deals and begun construction of
production facilities inside the FIEZ.



Visit from the Kazakhs

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5. (C) Several diplomats requested meetings following the A/S Blake
visit in order to hear about Blake's meetings with senior
officials, and specifically about his session with President
Karimov. Kazakh Charge Valikhan Turehanov met with the DCM on
October 16 to ask about whether A/S Blake discussed putting U.S.
troops in Uzbekistan and whether Uzbek military engineers would be
deployed to Afghanistan - issues that did not come up in
discussions. Turehanov expressed that Kazakhstan will be seeking a
greater role for the OSCE in Afghanistan when it takes over the
OSCE Chairmanship in 2010. Specifically, the Kazakhs hope that the
OSCE will play a role in the peaceful settlement issues,
particularly in long-standing conflict areas. They will also be
looking for Uzbekistan's cooperation on environmental issues, such
as the Aral Sea. Turehanov also informed us that Kazakh President
Nazarbayev is planning a visit to Tashkent in February. Turehanov
asserted that contrary to popular belief, Nazarbayev and Karimov
have a close personal relationship, upon which the bilateral
relationship between the two countries is based.



Chinese Embassy on Relations with Uzbekistan

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6. (C) In an October 22 conversation, the DCM from the Chinese
Embassy in Tashkent gave a generally positive characterization of
PRC-Uzbekistan relations. He noted that trade volumes had increased
by 40% over the last year, led largely by on-going investments in
the energy sector. The Turkmenistan-Uzbekistan-Kazakhstan-China gas
pipeline is near completion and expected to begin transporting 4.5
bcm of gas through Uzbekistan each year. He noted that China was
interested in expanding its investments in the gas sector in
Uzbekistan to meet growing domestic demand in China and also to
enable the country to gradually reduce its reliance on coal in
order to make reductions in carbon emissions. On security issues,
he said that there was strong cooperation with Uzbekistan,
particularly on what he termed "separatist" (i.e. Uighur) issues.
(According to press reports, Defense Minister Berdiyev was in
Beijing on Oct. 23.) Inquiring about the recent visit by A/S Blake
and the Uzbek position on Afghanistan, he said that China opposed
President Karimov's "6 plus 3" model for the same reasons as the
U.S. - that it excludes the elected government of Afghanistan and,
in so doing, creates parity between the Afghan government and the
Taliban.
NORLAND