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DE RUEHMO #1322/01 0411518
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P 101518Z FEB 06
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 0547
INFO RUCNCIS/CIS COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC

C O N F I D E N T I A L SECTION 01 OF 04 MOSCOW 001322 
 
SIPDIS 
 
SIPDIS 
 
USDOC FOR ITA/MAC/ORUE/JBROUGHER/MEDWARDS 
 
E.O. 12958: DECL: 02/10/2016 
TAGS: PGOV ECON PREL ETRD PINR RS
SUBJECT: AMBASSADOR'S VISIT TO KAZAN:  FEDERALISM, ECONOMIC 
DEVELOPMENT AND ISLAM 
 
REF: 05 MOSCOW 14477 
 
Classified By: Ambassador William J. Burns.  Reasons: 1.4 (B/D). 
 
¶1. (C) SUMMARY:  The Ambassador's February 6-7 visit to 
Tatarstan featured themes of federalism, economic opportunity 
for U.S. firms, and Islam.  Republic President Shaymiyev, in 
a lengthy tour d'horizon, noted that he was taking 
initiatives not encouraged by Moscow, including diversifying 
the economy by developing the petro-chemical sector. 
Shaymiyev took swipes at President Putin for seeking to 
over-centralize power in Moscow and for economic 
short-sightedness.  Both Shaymiyev and a group of Tatarstan's 
business leaders expressed to the Ambassador their hope for 
broader commercial ties with U.S. firms.  Shaymiyev and the 
republic's leading Muslim figures highlighted Tatars' 
tradition of tolerant Islam, although the visit also revealed 
hints that Tatarstan's leadership is concerned about radical 
Islamic influences from the Middle East.  Despite rumors that 
Shaymiyev's presidency may be nearing an end, he appeared 
fully engaged on a range of issues and seemed very much in 
control.  Tatarstan appeared politically stable and a place 
that could offer interesting opportunities for U.S. 
commercial ties.  END SUMMARY. 
 
¶2. (SBU) Ambassador Burns visited Kazan, capital of the 
Republic of Tatarstan, on February 6-7.  He held a lengthy 
meeting with republic President Mintimer Shaymiyev, 
participated in a roundtable discussion with business leaders 
and another with Islamic figures at the Russian Islamic 
University of Kazan, and met with students and faculty of 
Kazan State University.  The Ambassador held a press 
conference at Kazan's American Corner, where he also met 
separately with alumni of USG exchange programs. 
. 
SHAYMIYEV'S TOUR D'HORIZON CENTERS AROUND FEDERALISM 
--------------------------------------------- ------- 
 
¶3. (C) As noted reftel, Tatarstan has long been a key 
battleground in center-regional relations, with Shaymiyev 
resisting Putin-era efforts at centralization of power in 
Moscow.  That theme featured prominently in the Ambassador's 
conversation with Shaymiyev, who was clearly enthusiastic 
about the meeting and extended it far longer than planned. 
 
¶4. (C) Shaymiyev began by describing Tatarstan as having 
pursued its own approach, which had produced brisk 
development.  On the economic side, this had allowed the 
republic to lessen the impact of national downturns, 
Shaymiyev argued; whenever Russia's economy had encountered 
hard times, Tatarstan's economy had not felt the impact as 
severely. 
 
¶5. (C) Turning to the current economic situation, Shaymiyev 
posited that while the federal government sought to double 
GDP, this was not an effective approach.  Instead, Tatarstan 
was focusing on qualitative economic development.  While the 
republic had sufficient oil reserves to meet its demand for 
the next thirty years, drilling for that oil was expensive 
and costs would only continue to rise.  For this reason, 
Tatarstan was focusing on developing the petro-chemical 
sector, both to diversify its economy and to cushion it from 
oil price fluctuations.  Machine building was another focus 
of development, Shaymiyev said.  The republic had been a 
central player in the military-industrial complex during the 
Soviet era, but customers for military production were 
becoming hard to find, resulting in the current turn to 
civilian production. 
 
¶6. (C) Tatarstan was following this course on its own, 
Shaymiyev said, despite the limitations imposed by the 
federal center.  Only now was Moscow coming to understand the 
wisdom of Tatarstan's approach, he continued, which had 
helped produce stability in the republic. 
 
¶7. (C) The Ambassador noted the progress made under Shaymiyev 
and emphasized his desire for broader U.S. commercial ties 
with the republic.  This should not be limited to natural 
resources, the Ambassador continued, particularly since human 
capital was Tatarstan's best resource and special economic 
zones offered interesting possibilities for U.S. business. 
Commenting that the focus on the petro-chemical sector made 
sense, the Ambassador said that Citigroup's financing of a 
petro-chemical plant was a good first step in broadening 
economic ties with the U.S.  Shaymiyev responded that Moscow 
was becoming interested in Tatarstan's petro-chemical 
development effort, and that he would be meeting with 
Economic and Trade Development Minister German Gref on 
 
MOSCOW 00001322  002 OF 004 
 
 
February 15 to discuss the issue, with an eye to pursuing a 
regional approach involving the Bashkortostan Republic, 
Orenburg Oblast and other of Tatarstan's neighbors.  The 
Ambassador noted that we would work with Gref as well to 
explore a broader U.S. role.  Noting that Tatarstan used much 
U.S. technology in its agricultural sector, Shaymiyev praised 
President Bush's proposal to use agricultural products to 
generate energy as a bold move that warranted consideration 
in Russia. 
 
¶8. (C) Turning to the political front, Shaymiyev noted that 
Tatarstan had recently agreed to a new treaty with Moscow to 
replace one signed in 1992.  (In a separate conversation, a 
republic official told the Ambassador that the treaty, having 
been approved by Tatarstan's parliament late last year, had 
been sent to Moscow for ratification.  It remained unclear 
whether the State Duma would consider it or whether it would 
go directly to President Putin for consideration and possible 
signature.)  The new treaty contained some important 
concessions, Shaymiyev argued.  It responded to the 
republic's ethnic make-up (53 percent Tatar, 47 percent 
Russian) by stipulating that the republic's president must 
know both languages and requiring that efforts be made to 
promote knowledge of the Tatar language and culture in the 
republic and among its ethnic diaspora.  Maintaining the 
Tatar language and culture had required hard work but had 
been largely successful.  Unless this effort continued, 
destabilization could result in Tatarstan. 
 
¶9. (C) More broadly, Shaymiyev posited, Moscow often tried to 
downplay the nationality factor.  While it was hard to 
account for the importance of nationalities, they could not 
be ignored anywhere in today's world.  Russia could not 
become democratic if it was unitary, Shaymiyev argued.  And 
as the post-Soviet generation emerged, such democracy was 
increasingly essential. 
 
¶10. (C) Putin had done much for the country, Shaymiyev 
continued.  He had faced a tough legacy in the North 
Caucasus, left him by Boris Yeltsin, who had admitted the 
errors of his approach to Chechnya.  More generally, Putin 
had been faced with the need to establish order in the 
country.  It was easy to criticize Putin, but he had created 
such order.  Yet there must be limits to that order, 
Shaymiyev argued, and Putin's approach on issues involving 
federalism raised serious questions.  Eliminating 
gubernatorial elections had been an error, Shaymiyev argued, 
although the law mandating that the winning party in a 
region's legislative election would pick the governor undid 
some of that damage. 
 
¶11. (C) Noting that he was a member of the United Russia (YR) 
party's national leadership, Shaymiyev said YR should adopt a 
right-center position.  The party needed to be at the center 
of the country's political spectrum, but holding rightist 
economic positions was essential, particularly during 
Russia's modernization.  Shaymiyev argued for a national 
government chosen by parliament rather than by the president. 
 Russia would develop a genuine system of political parties 
only if one party selected and controlled the government and 
others were in opposition. 
 
¶12. (C) The Ambassador noted Tatarstan's tradition of 
religious tolerance, underscoring its importance to 
maintaining stability.  Shaymiyev expressed pride that the 
Tatar model of Islam had been tolerant since well before the 
Soviet era. 
. 
BUSINESS COMMUNITY SEEKS BROADER ECONOMIC TIES 
--------------------------------------------- - 
 
¶13. (SBU) Some two dozen leaders of the republic's business 
community voiced views similar to Shaymiyev's in a meeting 
with the Ambassador.  In introductory remarks, the republic's 
Trade Minister noted Tatarstan's rapid economic growth and 
the new focus on the chemical and petro-chemical sectors, as 
well as on mechanical engineering and metallurgy.  He and 
others also highlighted the development of a special economic 
zone (SEZ) in the republic's Yelabuga region.  An official of 
that SEZ said that sizable funding was being devoted to 
infrastructure development, and that the zone would offer 
opportunities for petro-chemical production, including that 
of plastic resins, as well as car part production.  Because 
it is still under development, the SEZ offers opportunities 
to U.S. consultants, service providers and others.  The 
official of one of the republic's leading banks said that 
consultants from the U.S. could also find opportunities 
because Tatarstan's small and medium sized enterprise sector 
 
MOSCOW 00001322  003.2 OF 004 
 
 
was still far from fully developed. 
 
¶14. (SBU) Lack of sufficient U.S. business ties was a common 
theme of other speakers at the session as well.  A car parts 
manufacturer noted that, while it had established ties with 
Delphi, it sought to further expand its U.S. business 
relations.  A banking representative noted that while his 
bank had access to USD ten million in EXIM funds, it had only 
been able to use about fifteen percent of that amount.  The 
representative of a leading helicopter manufacturer 
complained that the U.S. does not certify his firm's 
helicopters, and saw the need for U.S. firms to view Russia 
as a "civilized partner."  By contrast, the representative of 
Tatneft, the republic's main oil production entity, said his 
firm had excellent ties with U.S. partners. 
 
¶15. (SBU) The Ambassador stressed the importance of economic 
ties with the U.S., and the broader significance of WTO 
accession.  He welcomed the examples of good ties but 
stressed the need for more models of success, which would 
draw potential U.S. partners' attention to Tatarstan.  The 
Ambassador said he would follow up, including with AmCham 
Moscow and with visiting delegations.  He underscored that 
the G-8 Summit would allow Russia to highlight its business 
opportunities, and hoped Tatarstan would take advantage of 
that occasion. 
. 
TOLERANT ISLAM, BUT WITH A FEW STRESSES 
--------------------------------------- 
 
¶16. (C) Reiterating his message about the importance of 
tolerance, the Ambassador echoed in several other meetings 
the message he had conveyed to Shaymiyev about Tatarstan's 
reputation for having a tolerant version of Islam.  On a 
visit to the Russian Islamic University in Kazan, he held a 
roundtable discussion with several major Muslim figures led 
by Gasman Iskhakov, who is both the school's rector and Chief 
Mufti of the republic.  Noting the dramatic rise of Islamic 
religious and educational institutions in Tatarstan since the 
fall of the Soviet Union, Mufti Iskhakov said that each of 
the republic's 47 administrative subdivisions now had their 
own imam and, typically, some twenty to forty mosques.  His 
university had been founded to ensure that Tatars, rather 
than those from the Middle East, would provide religious 
leadership throughout the republic.  His university, which 
had begun with 18 students when it was founded in 1998, now 
had between two hundred and three hundred students.  Plans 
were afoot to open branches in other regions of Russia, 
including Saratov, the Mufti reported. 
 
¶17. (C) The Mufti shared the Ambassador's view about the 
importance of a tolerant Islam.  Commenting on the Danish 
caricatures controversy, he said they reflect lack of respect 
for Muslims.  Those who had drawn the caricatures and 
published them were to blame, however, rather than the Danish 
population as a whole, the Mufti argued.  (Note:  A few 
participants in the Ambassador's meeting with USG program 
alumni noted they had heard rumors that Danish food was being 
boycotted in the republic, but said they opposed any such 
boycott.  According to the press, one of the republic's major 
food chains took Danish food off the shelves as the 
controversy was playing out, but stopped that policy, 
particularly after Shaymiyev's administration took issue with 
it.  End Note.) 
 
¶18. (C) Despite his comments to the Ambassador, the Mufti is 
viewed by the Shaymiyev administration as overly influenced 
by the Middle East, State Secretary for Political Affairs 
Rafael Khakimov told us on the margins of Shaymiyev's meeting 
with the Ambassador.  (Indeed, the Mufti told the Ambassador 
his religious education had taken place primarily in Jordan 
and Libya.)  Tatarstan's Council of Muftis will hold an 
election later in February in which Iskhakov is running for 
reelection as Chief Mufti.  Khakimov said that Shaymiyev's 
administration was strongly leaning toward replacing Iskhakov 
with a more "secular" figure less oriented to the Middle East. 
 
¶19. (C) The Ambassador also discussed Islam while visiting 
the Kul Sharif mosque, built inside Kazan's Kremlin and 
inaugurated during the city's millennium celebrations last 
year.  Describing Kul Sharif as a Tatar hero who had fought 
off the Russians in the 16th century, the mosque's imam 
hastened to add that Tatarstan's Muslims were in no way 
anti-Russian.  Russia brought together a range of 
nationalities, of which the Tatars and their Islamic 
traditions were an integral part.  The imam added, however, 
that Russia had been built on the foundations of the Golden 
Horde, of which the Tatars had been the core in the 13th 
 
MOSCOW 00001322  004 OF 004 
 
 
century; the iman's implication was that Tatarstan still 
enjoys pride of place in the country. 
. 
COMMENT 
------- 
 
¶20. (C) We have heard rumors that Shaymiyev's presidency is 
nearing an end for two reasons.  On the one hand, some 
believe that after over twenty years as president, he has 
lost his enthusiasm for running the republic; Public Chamber 
member Vyacheslav Glazychev, an expert on Russia's regions, 
recently described Shaymiyev to us as "tired and indecisive," 
and we heard a similar view from Islam expert Rafik 
Mukhamedshin on our latest visit to Kazan.  On the other 
hand, the reasoning goes, the Kremlin has gained enough power 
that it now feels itself in position to remove Shaymiyev as 
president, as long as they do it gracefully.  At least 
judging by the Ambassador's meeting with him, Shaymiyev 
remains highly engaged on a broad range of issues and appears 
to have a forward-looking vision for Tatarstan's development. 
 In his conversation with the Ambassador, Shaymiyev took some 
swipes at the Putin administration, notably on 
over-centralization of power and economic short-sightedness, 
which suggests either a leader with little to lose or one 
with much confidence about his own position. 
 
¶21. (C) In his visit to Kazan, the Ambassador found a 
thriving city with much recently built infrastructure -- 
largely the result of a huge injection of federal funds for 
the millennium celebrations -- and many new construction 
projects ongoing.  Economically, the republic appears to 
offer significant opportunities for U.S. firms.  Politically, 
the republic seemed stable, with little prospect that the 
Kremlin would oust Shaymiyev without carefully calculating 
the risks.  The Ambassador's visit revealed few signs of 
serious trouble on the Islamic front, despite some rumblings 
about potential radical influences. 
BURNS