Uzbekistan: Korean Ambassador Shares Views of Cooperation

C O N F I D E N T I A L SECTION 01 OF 05 TASHKENT 000795

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E.O. 12958: DECL: 2019/05/18
TAGS: PREL ECIN PGOV ENRG ETRD BEXP EAID EINV EMIN KS UZ
SUBJECT: Uzbekistan: Korean Ambassador Shares Views of Cooperation
with Uzbekistan

REF: STATE

CLASSIFIED BY: Steven Prohaska, Second Secretary, State, Pol-Econ;
REASON: 1.4(B),(D)


1. (C) Summary: On May 15, Korean Ambassador Jea-min Kyun gave the
Ambassador a read-out of Korean President Lee Myung-bak's visit to
Uzbekistan earlier that week. An energetic President Karimov had
accompanied Lee for virtually the entire duration of the three-day
visit, and over the course of various meetings both sides had
signed over 30 documents and agreements. Despite Uzbekistan's
tendency to exaggerate certain figures, Uzbek-Korean cooperation in
trade and other areas is on the rise and Karimov appears to admire
the Korean model of development. Bilateral cooperation on oil and
gas does not appear to include exporting any of these resources
from Uzbekistan to Korea. Instead, both sides will share in the
profits from exporting this energy to third countries. Uzbekistan
and Korea appear to enjoy particularly close ties-a relationship
that Uzbekistan may value all the more now in the context of
Uzbekistan's concerns about the domestic economic situation and the
potential to derive economic benefits from such cooperation. End
summary.



Hearty Karimov Welcomes Korean President to Uzbekistan

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2. (C) On May 15, the Ambassador met with Korean Ambassador Jea-min
Kyun to discuss the recent visit of Korean President Lee Myung-bak
to Uzbekistan. Ambassador Kyun remarked that Uzbekistan had
changed the schedule for Lee's visit at the last minute, with
President Karimov inserting himself (and taking the Prime
Minister's place) into virtually every function during the
three-day visit, though Karimov had originally been slated to
attend only two functions. Karimov even made the rare gesture of
meeting President Lee at the airport. Kyun said that much to the
Korean side's surprise, the 71-year old Karimov had appeared highly
energetic and "aggressive," especially in light of his advanced
age. Karimov even set up a private lunch with Lee during their
visit to Samarkand which dragged on for two hours longer than
anticipated. Kyun opined that Karimov may have tried to use this
lunch to convey a message to the U.S. via Lee, and that Lee would
give President Obama a read-out of this lunch during their upcoming
meeting.




3. (C) The Korean delegation had 175 members, including 24
businessmen and 43 reporters, and 150 of these had taken a special
flight to Uzbekistan from Korea. By the end of the visit,
Uzbekistan and Korea had signed over 30 documents. Ambassador Kyun
remarked that President Lee had not been enthusiastic about signing
so many of these, instead preferring only two or three, but the
Government of Uzbekistan (GOU) had been extremely insistent that a
large number of agreements be signed. Kyun said that Karimov's top
priority for the visit had been to induce Korea to invest in the
Free Industrial Economic Zone and transportation hub in Navoi.



A Steadily Growing Partnership

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4. (C) Cooperation between Korea and Uzbekistan is on the rise,
Kyun continued. Nevertheless, Uzbekistan has displayed a tendency
to exaggerate figures about their cooperation. For example, while
President Karimov has stated that Korean investment in Uzbekistan
is around four billion dollars, its actual net investment in the
country is 500 million dollars, Kyun said. Kyun said that last

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year, bilateral trade stood at $1.38 billion-a 60 percent increase
over the previous year. (Note: President Karimov stated at a
banquet in Lee's honor that bilateral trade had increased by over
80 percent. End note.) Kyun nevertheless appeared proud that
Korea had surpassed all other Asian countries besides Russia in
investing in the country, and that Korea had taken fifth place in
the world in terms of overall trade volume with Uzbekistan. Kyun
opined that Karimov admires the "Korean model" of development as
well as former Korean President Park Chung-hee, and noted that
Karimov has studied Chung-hee's books.



Close Ties Between Leaders

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5. (C) Kyun said that there is a special relationship between
Karimov and Lee and between Uzbekistan and Korea. In 2006, when
Karimov had visited Korea's previous president, Lee had been the
mayor of Seoul and had awarded Karimov the key to the city.
Karimov had been the only Central Asian president to attend Lee's
subsequent presidential inauguration, Kyun continued. Last year
during the Olympic Games in Beijing, Karimov and Lee had met a
third time. During this visit to Uzbekistan, Lee also had invited
Karimov to visit Korea. This might happen next year, Kyun said.



Energy Cooperation

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6. (C) Korea and Uzbekistan had agreed to collaborate on three oil
and gas joint ventures-Korea will provide technical assistance in
exploring and exploiting several oil and gas fields-but both sides
would share in the profits from exporting these resources to third
countries instead of exporting Uzbekistan's oil and gas to Korea.
Korea gets its energy from the Middle East and Russia instead, Kyun
noted. The three oil and gas joint ventures would include Korean
development of the Surgil gas field near the Aral Sea, the
Namangan/Chust oil field, and a third site in southwestern
Uzbekistan.




7. (C) Kyun described oil and gas cooperation as a key objective
for Korea in its cooperation with Uzbekistan, and indeed the
Central Asian region, in contrast to Uzbekistan's greater focus on
developing Navoi and receiving investment. Korea sees better
prospects for energy cooperation in Kazakhstan than Uzbekistan.
Kyun also indicated that Korea is very interested in taking care of
the large Korean diasporas in Central Asia-some 100,000 in
Kazakhstan and 180,000 in Uzbekistan.



Uzbekistan not Keen on Flights to Afghanistan, Wary of Terrorists

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8. (C) Uzbekistan continues to adhere to its position of not
permitting flights from Navoi into Afghanistan, Kyun said. Karimov
had specifically noted that cargo will be delivered to Afghanistan
overland. Kyun suggested that greater stability in Afghanistan
might soften Uzbekistan's position, but right now, such flights did
not appear likely to garner Uzbekistan's approval. He said that

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the GOU is already concerned about retaliation from the Taliban for
its support of U.S. operations in Afghanistan, and noted that when
First Deputy Prime Minister Azimov had been Chairman of the
National Bank of Uzbekistan (Kyun did not specify the year),he had
been by Karimov's side when terrorists had made an attempt on
Karimov's life. The experience had scared Azimov badly.



Further Detail on Series of Documents

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9. (C) Kyun handed the Ambassador several sets of documents: a
five-page copy of a joint statement that both sides had issued, and
three outlines of documents and agreements that both sides had
signed during the Uzbek-Korean business forum and various meetings
between senior Uzbek and Korean officials. The joint statement
noted a desire to expand bilateral ties across a wide range of
political, economic, cultural and humanitarian areas, thus building
on the strategic partnership agreement that Korea and Uzbekistan
had concluded in March 2006. Both sides agreed to collaborate on
oil and gas projects; explore and exploit mineral mines; cooperate
on developing the Navoi Free Industrial-Economic Zone; hold
cultural exchanges; facilitate regular visits between both
countries; and agree on various security issues.




10. (C) Our unofficial translation of the list of documents signed
between the Korean Minister of Finance and Uzbekistan's First
Deputy Prime Minister Azimov on May 11 includes the following: (1)
A memorandum of understanding in cooperation in the sphere of
mineral resources and modernization of the Almalik mining plant;
(2) A memorandum of understanding in cooperation in financing of
the Surgil project between Uzbekneftgaz and a consortium of Korean
companies, the Export-Import Bank of Korea, and the Korean
Corporation of Export Insurance; (3) a memorandum of understanding
in a joint study of investment blocks in the Ustyurt region of
Uzbekistan between Uzbekneftgaz and the Korean National Oil
Corporation; (4) an agreement on cooperation between Uzbekistan's
State Committee for Geology and Mineral Resources and the Korean
Resources Corporation in conducting joint geological work on
tungsten at the Tim-Kaltasaiskaya prospecting area; (5) a
memorandum of understanding between the National Bank of External
Economic Activity of Uzbekistan and Eximbank of Korea on opening a
100 million USD line of credit for financing projects on the
territory of the Navoi Free Industrial Economic Zone (FIEZ); (6) a
memorandum of understanding between Uzbekistan's Asaka Bank and
Korea's Eximbank on opening a 100 million USD line of credit for
financing projects on the territory of the Navoi FIEZ; and (7) a
memorandum of understanding between Uzbekistan's Ministry of
Finance and Korea's Eximbank on allocating a credit (of an initial
value of 17.6 million USD from the Economic Cooperation and
Development Fund) on water supply and waste treatment for the Navoi
FIEZ.




11. (C) Our unofficial translation of the list of documents signed
during the Uzbek-Korean Business Forum on May 11 includes the
following: (1) a memorandum of understanding on cooperation between
Uzbekistan's Ministry of Foreign Economic Relations and the Korean
Daewoo International Cooperation in the sphere of supplying uranium
concentrate, cotton-fiber, cathode copper, and molybdenum; (2) a
memorandum of understanding between Uzbekistan's State Committee
for Geology and Mineral Resources and the Korean Institute for
Geological Sciences and Mineral Resources; (3) a memorandum of
understanding between Uzbekistan Railways and the administration of
the Korean railway network in railway cooperation; (4) a memorandum
of understanding in cooperation on state electronics purchases; (5)
documents on the creation of a joint venture between Uzeltechsanoat

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and the company "Dong Seung Development Co., LTD" in the production
of LCD monitors; (6) documents on the creation of a joint venture
between Uzeltechsanoat and the company "Daebang Phostech Co., LTD"
in the production of energy-saving lamps; (7) a memorandum of
understanding on cooperation between Uzeltechsanoat and the company
"LG Electronics" on the production of refrigerators; (8) documents
on the creation of a joint venture between Uzavtosanoat and the
company Erae Cs Limited in the production of automobile lines; (9)
documents on the creation of a joint venture between Uzavtosanoat
and the company Erae Cs Limited in the production of automobile
generators; (10) documents on the creation of the joint venture "UB
Energy;" (11) documents on the creation of a joint venture between
Uzbekneftgaz and the company DongHo ENC Co. LTD in the production
and assembly of electronic instruments for inspecting gas; (12) an
agreement on joint work on a project in producing plastic products
between Uzbekneftgaz and the company Honam Petrochemical; (13)
documents on the creation of a joint venture between Fayz and the
company Shindong Enercom in the production of "sandwich panels;"
(14) a memorandum of understanding in cooperation on a
geoinformational support system for town-planning activities; and
(15) a memorandum of understanding in cooperation in construction
and engineering-consulting activity.



Karimov Gives Long-Winded Remarks at State Banquet

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12. (C) The Ambassador also attended a state dinner hosted by
President Karimov in honor of President Lee. Lee spoke briefly in
comments that mentioned the similarity of "culture and
temperament" between the two countries, bilateral ties that have
developed beyond friendship to something akin to a blood
relationship, and their agreement to pursue cooperative projects of
mutual benefit. In contrast to Lee, President Karimov went on at
great length in his remarks, at times drifting from his seven-page
speech to offer extemporaneous commentary on the importance of
developing Navoi. Karimov called Lee's visit "a landmark event"
and noted the strategic partnership between both countries. He was
effusive in his praise of both Korea and Lee, calling Korea "a
reliable and time-honored partner" and Lee energetic and "an
experienced and wise leader... [and a] globally recognized
authoritative political figure, who pragmatically and ...
resolutely leads a policy of balanced and dynamic development of
his country." Karimov praised Korea's foreign policy in promoting
peace and stability and its role in countering the effects of the
global financial crisis. He expressed pleasure with the growth in
bilateral trade and drew special attention to Korea's active work
in developing the Free Industrial Economic Zone and the logistical
hub at Navoi.



Comment:

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13. (C) Uzbekistan and Korea appear to have developed an especially
close relationship, and much like Japan, Korea is an easy partner
for Uzbekistan. The documents both sides signed not only address
the investment and economic cooperation that Uzbekistan so badly
craves, but also support Uzbekistan's policies on issues that
matter to Tashkent such as water, while avoiding more sensitive
subjects like human rights altogether. Moreover, Uzbekistan
probably appreciates the favorable coverage it has received in the
Korean media in recent years. Korea appears to be figuring
prominently in Uzbekistan's foreign and domestic economic policy,
particularly given the GOU's persistent concerns about the global
financial crisis and Karimov's desire to build Navoi into a new

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transcontinental transportation hub. Also interesting was their
decision to cooperate in supporting the employment of Uzbekistan's
labor force by establishing a career training center and exchanging
views on labor policy-a possible reflection of Uzbekistan's
concerns about its underemployed populace, especially in light of
diminishing opportunities for Uzbek migrant workers in Russia.
President Karimov's decisions to meet President Lee at the airport
(an unusual step),spend almost the entirety of the visit with Lee,
and give extremely laudatory remarks about Korea and its president
attests to the importance of this bilateral relationship.
Uzbekistan has almost no friends in the world; Korea may just be
one of them, in a partnership that advances both countries'
interests in a pragmatic way.
NORLAND