SAKHALIN GOVERNOR PUSHEDS FOR MORE COOPERATION WITH U.S.

UNCLAS SECTION 01 OF 02 VLADIVOSTOK 000109 SENSITIVE SIPDIS E.O. 12958: N/A TAGS: PGOV EAIR EPET ETRD CMGT RS SUBJECT: SAKHALIN GOVERNOR PUSHEDS FOR MORE COOPERATION WITH U.S. VLADIVOSTO 00000109 001.2 OF 002 ¶1. (SBU) Summary: Sakhalin Region Governor Khoroshavin would like to strengthen business and cultural ties with the United States. U.S. businesses such as Exxon Mobil employ hundreds in Sakhalin, and many local students speak English, but Khoroshavin said that U.S. foreign direct investment (FDI) was low compared to neighboring countries. He added that Sakhalin Air was searching for a partner to reestablish direct flights to the U.S. that could facilitate stronger cultural and commercial links. Khoroshavin said that he was glad there was a U.S. Consular Agent in Yuzhno-Sakhalinsk, but repeated his request that the U.S. establish a Consulate General there. He also said that Sakhalin enjoyed good relations with Moscow, although the financial crisis had decreased the amount of money Moscow gives to Sakhalin. He also said Sakhalin was committed to protecting the environment as new oil and gas sources come on line. End Summary. -------------- Governor Says Ties With U.S. Are Strong... -------------- ¶2. (SBU) On September 28 Sakhalin Region Governor Aleksandr Khoroshavin told us that he was enthusiastic about cooperation with the U.S. and wanted it to continue and grow. He pointed out that many U.S. companies such as Exxon Mobil were already carrying out projects in the region, employing hundreds of specialists in the process. In addition, Sakhalin hosted the Russian-American Pacific Partnership for the fourth time, which facilitated increased business cooperation. Khoroshavin also pointed out that many students in Sakhalin study English. "The United States is an important partner for Sakhalin," he said. -------------- ...But Could Be Stronger -------------- ¶3. (SBU) Khoroshavin, however, pushed for stronger business ties between the U.S. and Sakhalin. He lamented that the U.S. accounted for only USD 360 million in investment in Sakhalin (USD 40-50 in FDI),while South Korean and Japan accounted for over USD 5 billion (USD 150 million in FDI). He said the U.S. could especially invest more in hydrocarbons, oil, fisheries, and timber. ¶4. (SBU) In addition to business cooperation, Khoroshavin argued for stronger cultural ties between the U.S. and Sakhalin. The Russian city of Okha in northern Sakhalin used to have an active relationship with Kenai, Alaska. "This should be reactivated," he said. Khoroshavin added that the youth of Sakhalin feel "at home" in South Korea and Japan, and would like the U.S. as well if more educational and travel opportunities were open to them. -------------- -------------- Governor Requests Establishment of a Consulate General -------------- -------------- ¶5. (SBU) Khoroshavin said he was pleased to have a Consular Agent in Sakhalin since 2007, but he said the needs of the region, along with U.S. citizens and companies there would be better served if a Consulate General was established in Yuzhno-Sakhalinsk. He added that many companies, including U.S.-based companies, spend a lot of money traveling to Vladivostok for consular services. -------------- Direct Flights Between the U.S. and Sakhalin -------------- ¶6. (SBU) Khoroshavin said he was in favor of reestablishing direct flights between Sakhalin and the United States. Direct flights to Anchorage, Alaska, were once possible, but the company that offered them went bankrupt. Sakhalin Air offers flights to China, Japan, and South Korea, but is still searching for a partner to fly to the United States. Many Sakhalin residents are affluent, he argued, and want to travel to the United States. -------------- Sakhalin's Relations With Moscow -------------- ¶7. (SBU) Khoroshavin said that Sakhalin Region enjoyed good relations with Moscow. The financial crisis, however, had reduced the amount of money Moscow gave to Sakhalin from USD 16 billion in 2008 to USD 3 billion in 2009. -------------- Environmental Protection -------------- VLADIVOSTO 00000109 002.2 OF 002 ¶8. (SBU) Khoroshavin told us that Sakhalin was committed to protecting the environment as new oil and gas fields come on line. He said that Phase 2 of Sakhalin III, IV, and V have all passed environmental inspections. He also invited us to meet with him more often on the issue. ARMBRUSTER