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DE RUEHNT #0633/01 0901308
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P 311308Z MAR 06
FM AMEMBASSY TASHKENT
TO RUEHC/SECSTATE WASHDC PRIORITY 5464
INFO RUEHTA/AMEMBASSY ALMATY 7762
RUEHAH/AMEMBASSY ASHGABAT 1858
RUEHEK/AMEMBASSY BISHKEK 2383
RUEHDBU/AMEMBASSY DUSHANBE 2279
RUEHBUL/AMEMBASSY KABUL 1378
RUEHUL/AMEMBASSY SEOUL 0148

C O N F I D E N T I A L SECTION 01 OF 02 TASHKENT 000633 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR SCA/CEN 
 
E.O. 12958: DECL: 03/30/2016 
TAGS: PGOV PREL UZ ZK
SUBJECT: OIL, AUTOS AND HUMAN RIGHTS: KARIMOV VISITS KOREA 
 
REF: TASHKENT 611 
 
Classified By: CLASSIFIED BY AMB. JON R. PURNELL FOR REASONS 1.4 (B, D) 
. 
 
¶1. (C)  Summary: President Karimov,s trip to South Korea was 
successful, according to the South Korean DCM Jeung-Hyun Ryu, 
but it is too early to know how much fruit the agreements 
will bear.  In addition to speaking to Karimov about human 
rights, the Korean President discussed oil, gas and uranium 
extraction with him.  He also met with Hyundai to explore 
collaborative opportunities.  While the Uzbek press reported 
that numerous deals were signed and billions of dollars of 
investment will soon come pouring in, Ryu said the GOK wants 
to engage Uzbekistan &slowly8 in case the social economic 
and situations do not improve.  End summary. 
 
¶2. (C) President Karimov returned on March 30 from a two-day 
official visit to South Korea.  In a discussion with poloff 
regarding the visit, South Korean DCM Jeung-Hyun Ryu said 
Korea,s diplomatic approach to Uzbekistan is &slow 
engagement.8  He opined that only by leading the Uzbeks by 
the hand and offering them carrots will human rights and 
economic problems improve.  While the Uzbek press glorified 
reports of Korean investment and the numerous agreements 
signed during the visit, Ryu was more pragmatic.  He said the 
GOK plans to start oil and gas exploration and development 
projects here, but private businesses are still leery of the 
business environment.  The plan, he said, is to first focus 
on oil and gas projects while working to &set up a favorable 
economic situation.8  Once there is rule of law and 
transparency, then further private investment is likely to 
enter the market, especially in the information technology 
and construction sectors. 
 
¶3. (C) Multiple deals were signed to explore and extract 
mineral resources from the eastern regions. Korean state-run 
oil and gas companies are set to begin explorations for oil 
in Chust-Pap and Namangen-Terachi, and for gas in Uzunkui. 
Additionally, Korean Gas will develop a gas field in Surgil. 
Korea does not plan to export the extracted oil and gas 
directly to Korea, but perhaps instead export to Europe or 
&trade8, according to Ryu, with Russia for oil and gas 
already in Eastern Russian pipelines.  Ryu said that due to 
current high uranium prices, Korea will start extracting it 
from the second-grade site at Djantuar. 
 
¶4. (C) According to Ryu, Karimov also discussed a possible 
collaboration with UzDaewoo with Hyundai officials.  A 
contact told post Karimov was offering up to half of UzDaewoo 
shares to Hyundai (reftel).  Ryu could not confirm, however, 
whether a deal had been signed with Hyundai.   He said 
instead that Hyundai is considering making Andijon the focal 
point for its auto industry throughout Central Asia, but 
GM-Daewoo has a contract with UzDaewoo to supply it parts 
through 2009.  Ryu said business matters would be taken 
slowly, and implied that Hyundai could not start real 
collaboration with UzDaewoo until 2009. 
 
¶5. (C) Ryu brought up human rights on his own, saying the 
presidents discussed the topic during the visit.  According 
to Ryu, the Korean President told Karimov that states must 
ensure the human rights of its citizens and that Karimov 
&agreed.8  Poloff asked if the GOK intends to make human 
rights a political priority in Uzbekistan.  Ryu said his 
government believes in using &carrots8 to improve the 
situation. 
 
¶6. Comment: The South Korean Government is wary of the GOU,s 
current economic policies and is reluctant to invest, or 
encourage private Korean companies to invest, until the GOU 
cleans up its act.  By focusing on &carrots8 that are 
low-cost but potentially profitable, the GOK can engage the 
GOU without too much risk.  For example, Ryu said the over 
200,000 ethnic Koreans here are experiencing the same 
economic hardships of average Uzbeks.  Thus, the GOK plans to 
tap this labor supply and offer two-year visas to work in the 
construction and service sectors in Korea.  Korean businesses 
here are prolific and varied.  In recent years, however, 
several large Korean companies have had to pull out for 
economic reasons, including Daewoo.  It is likely the GOK 
does not want to see this happen again, especially in the 
current unpredictable environment.  Ryu,s comments, however, 
make it very clear that the Koreans will not press Karimov 
too hard on topics that the Uzbek president finds distasteful. 
 
TASHKENT 00000633  002 OF 002 
 
 
PURNELL