VZCZCXRO9357
RR RUEHDBU
DE RUEHAH #0704/01 1861254
ZNY CCCCC ZZH
R 051254Z JUL 06
FM AMEMBASSY ASHGABAT
TO RUEHC/SECSTATE WASHDC 7521
INFO RUCNCIS/CIS COLLECTIVE
RUEHIL/AMEMBASSY ISLAMABAD 1676
RUEHKP/AMCONSUL KARACHI 0041
RUEHLH/AMCONSUL LAHORE 0005
RUEHPW/AMCONSUL PESHAWAR 0343
RUEHVEN/USMISSION USOSCE 1651
RUEAIIA/CIA WASHDC
RHEHNSC/NSC WASHDC
RHEFDIA/DIA WASHINGTON DC//DHO-2/REA/NMJIC-J2//
RHMFISS/CDR USCENTCOM MACDILL AFB FL//CCJ2/HSE/CCJ5//
RUEKJCS/SECDEF WASHINGTON DC
RUEKJCS/JOINT STAFF WASHINGTON DC//J5/RUE//

C O N F I D E N T I A L SECTION 01 OF 04 ASHGABAT 000704 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR SCA/CEN MRUBIN 
 
E.O. 12958: DECL: 07/05/2016 
TAGS: PREL ENRG PK TX KPAO ETRD EPET ZK PGOV
SUBJECT: TURKMENISTAN AND PAKISTAN: PROBLEMS ABOUND 
 
ASHGABAT 00000704  001.2 OF 004 
 
 
Classified By: CLASSIFIED BY AMB TRACEY JACOBSON FOR REASONS 1.4 B AND 
D 
 
Summary 
------- 
 
¶1.   (C) SUMMARY: PolOff met with Pakistani Deputy Chief of 
Mission in Turkmenistan, Dr. Ali Ahmad Arian on June 30 and 
talked about the bilateral relationship between Turkmenistan 
and Pakistan, including their declining trade relations, 
Trans-Afghan Pipeline feasibility, educational exchanges, and 
several proposed transport projects linking the two 
countries.  Arian also shared his views and predictions about 
Turkmenistan,s current and future political situation.  END 
SUMMARY. 
 
Economic and Trade Relations 
---------------------------- 
 
¶2.   (C) Turkmenistan and Pakistan have a primarily 
trade-based relationship right now, according to Arian, with 
Pakistan,s main export crops comprising $7 million worth of 
fruit and rice, which is traded on &a largely informal 
basis.8  In return, Turkmenistan sells Pakistan roughly $4-5 
million in cotton through the official state exchange -- 
although he suspects there is more cotton trade that happens 
off-the-books -- as well as a limited amount of liquefied 
natural gas. 
 
¶3.   (C) There are approximately 100 Pakistanis living in 
Turkmenistan, mostly working for foreign oil or construction 
firms, but only a handful of Pakistani firms operating in 
Turkmenistan.  The largest is the SKB construction company 
who owns a major downtown office building in the center of 
the city, called the &World Trade Center8 where the 
headquarters of the Pakistan National Bank in Ashgabat are 
located.  According to Arian, SBK is &winding up8 its 
business in Turkmenistan as a direct result of obstruction 
and other problems with the government.  The U.S. Embassy,s 
Public Diplomacy Center was evicted from the building at 
Niyazov,s insistence in 2003 and SKB has had problems 
renting out floors ever since.  SBK is currently prohibited 
from renting office space to tenants of their choice, namely 
businesses, since the government wants retail shops located 
there instead.  Arian told PolOff that &they are trying to 
get out8 and may sell the building shortly, and leave 
Turkmenistan for good. 
 
Pakistan National Bank,s Woes 
----------------------------- 
 
¶4.   (C) Pakistan National Bank is Turkmenistan,s only 
international financial institution.  Most of the expatriates 
living in Ashgabat and many Turkmenistani businesspeople keep 
their personal accounts there, because &the bank provides 
better service and a wider range of services.8  Previously, 
Pakistan National Bank could conduct transactions via their 
branch in New York, which let clients easily make foreign 
currency payments to businesses in other countries.  However, 
PNB has since lost this ability and now all international 
transactions must go through the Central Bank of 
Turkmenistan.  Furthermore, PNB has been repeatedly denied 
permission from the Central Bank to offer personal loans by 
the Central Bank.  A further problem is the staffing 
situation:  although the host government insists that the 
Bank maintains a 30/70 percent ratio of Pakistani to 
Turkmenistani employees, at present the figure is closer to 
10/90, and just a few weeks ago the bank,s new manager was 
denied a visa to Turkmenistan.  When asked by PolOff how the 
bank makes money in the face of all these difficulties, Arian 
simply smiled wanly and spread his hands in lieu of an answer. 
 
Bullish on Trans-Afghan Prospects 
--------------------------------- 
 
¶5.   (C) Despite setbacks in the areas of trade, finance and 
new transport routes, Arian was somewhat positive on the 
prospects a Trans-Afghan pipeline.  According to him, the 
proposed pipeline,s next step will be &a meeting on the 
 
ASHGABAT 00000704  002.2 OF 004 
 
 
technical level.8  Although originally scheduled for June, 
the meeting has been postponed (Note: The 9th Trans-Afghan 
Pipeline steering committee meeting was held in Ashgabat in 
February. End Note.).  He also noted that there have been 
three feasibility studies, and the latest, from the Asian 
Development Bank, will be available in the next few months. 
He admitted that he was ¬ sure8 that there was as much 
gas as the government of Turkmenistan claims.  He also 
confirmed that the UAE Ambassador approached the Pakistani 
Ambassador and expressed interest in providing financing, but 
no financial institution was identified.  Additionally, Arian 
said that the current GazProm-Turkmenistan price negotiations 
are &a very good thing8 since increased prices for 
Turkmenistan,s gas &increase the feasibility8 and interest 
in a Trans-Afghan pipeline. 
 
Proposed Transport Links: Trains, Planes and Automobiles 
--------------------------------------------- ----------- 
 
¶6. (  C) Pakistan first proposed a rail link between the two 
countries in December of 2003.  This is part of the plan to 
build a massive port facility at Gawadan in Baluchistan, but 
also has the potential to be an inexpensive way to ship goods 
to and from other Eurasian states, including Russia. The 
proposed route would pass through Herat and Kandahar. 
However, recent press reports saying that the railroad could 
start construction in the next month or two are &a little 
over-ambitious,8 admitted Arian. 
 
¶7.   (C) According to Arian, the government of Turkmenistan 
has agreed to help upgrade the condition of the roads as 
their end of the railway deal.  The existing road to Pakistan 
is ¬ in very good condition,8 but is only 700km to 
Pakistan and if upgraded could boost trade significantly. 
The Turkmenistanis have supposedly promised to start the 
project this year.  Arian also decried the general state of 
roads outside Ashgabat, having returned from a trip to Mary 
the day before. 
 
¶8.   (C) Prior to Operation Enduring Freedom, Turkmenistan 
Airlines flew twice a week between Ashgabat and Karachi. 
There have been several attempts since this time to restart 
air connections between the two nations.  A year ago, 
President Niyazov signed an agreement to start regular 
flights from Ashgabat to Lahore, but each time the embassy 
approaches Turkmenistan Airlines they claim that the route is 
not economically feasible, etc. and have declined even to run 
provisional flights for a few weeks.  Pakistan,s national 
airline has regular flights to Meshed, Iran -- just 30km away 
from Ashgabat -- and Arian discussed the possibility of 
extending the flight route to Ashgabat but Pakistani airline 
officials responded negatively, citing Turkmenistan,s strict 
visa regime: &they are not giving visas to any person -- who 
will travel on our flight?8 
 
Political & Economic Impediments: Pomp & Neutrality 
--------------------------------------------- ------ 
 
¶10.   (C) Arian attributed the somewhat strained relations 
and lack of progress on joint projects to Niyazov,s 
dissatisfaction with the amount of attention he has received 
from Islamabad.  Specifically that there have been no recent 
high level (i.e. presidential or prime ministerial) visits to 
Ashgabat or invitations from Pakistan, which has made the 
Turkmenbashy &a little unhappy that he has been left out,8 
said Arian.  This is especially keen in light of visits by 
Musharref to other Central Asian capitals and to Baku.  In 
Arian,s assessment, &what,s important to Niyazov are the 
ceremonial things.  He is not interested in developing an 
actual relationship.8  The embassy is pinning its hopes on a 
high-level guest for Turkmenistan,s upcoming celebrations 
for its fifteenth year of independence.  Arian has told 
Islamabad to convey to Musharref that he needs to &just have 
a cup of tea with this man, and our relationship will 
improve.8 
 
¶11.   (C) Another reason Arian cited for the problematic 
relationship is Turkmenistan,s dogged insistence on 
neutrality.  Since &they are not members of most 
 
ASHGABAT 00000704  003.2 OF 004 
 
 
international organizations that we participate in,8 the 
opportunities for agreements and improved relations are 
therefore fewer.  Furthermore, in Arian,s words, 
&neutrality is not an economic concept )- it,s a political 
one,8 and so Turkmenistan,s stance of non-alignment often 
prevents them from joining economically beneficial 
arrangements. 
 
Educational and Cultural Exchanges 
---------------------------------- 
 
¶12.   (C) While Arian maintained that educational exchange 
&has been (Pakistan,s) focus for the past few years,8 
their initiatives seem to have all but fizzled out.  Pakistan 
usually sent 30-40 students annually, mostly on professional 
courses of study, to the foreign service academy, banking 
institutes, and agricultural and textile industry courses. 
However, to date this year, only six students have gone, all 
of whom are army officers on a military exchange program. 
Arian chalked up the loss of students to a lack of interest 
because Turkmenistan,s government officials are more 
interested in exchanges with &more money8 for per diem. 
&We pay room and board, but the stipend is low, perhaps $100 
-- $200 per month -- other countries, programs are more 
attractive.8  He also said that there are often problems 
with language, and that many candidates have a low level of 
English proficiency, so there are &few truly qualified 
candidates.8 
 
¶13.   (C) In addition, Pakistan has &repeatedly offered 
technical assistance in many areas,8 said Arian, including 
in the areas of diplomacy, banking, petroleum, etc., but thus 
far the ministries have either not approved or accepted any 
of these offers for such visiting experts.  Cultural exchange 
has also been very limited thus far.  Arian said since the 
Turkmen people &really like music8 he has requested a music 
troupe or a folk or pop singer, since the two countries share 
a common musical heritage in his opinion.  Moreover, the 
embassy is organizing a seminar on history and common 
ancestry between Pakistan and Turkmenistan, although this has 
not yet been approved by the government of Turkmenistan. 
 
Political Assessment, Views On Turkmenistan,s Future 
--------------------------------------------- ------- 
 
¶14.   (C) In his overall assessment of Turkmenistan, Arian 
drew parallels between modern Turkmenistan and communist 
China in the 1990s.  (Note: Arian served at the Pakistani 
Embassy in Beijing during this time. End Note.).  He cited 
similarities including two different currency rates, constant 
intelligence surveillance and distrust of foreigners and &a 
certain rudeness8 in their attitude in dealing with 
diplomats.  They &don,t know the social niceties8 
complained Arian, and are often &very rude.8 In his 
opinion, &the only difference is that (in China) they had a 
party, and here there is just one man.8  Arian also had 
several complaints about the poor state of communications and 
infrastructure.  He was critical of the fact that the 
internet does not work reliably and stated that the Embassy 
of Pakistan has not been able to send a fax to Islamabad for 
the last six months. 
 
¶15.   (C) Characterizing the current political climate as 
&very unfree,8 Arian also said that the Turkmenistani 
people are &very submissive.8  His major criticism was 
saved for the government:  &They have ruined their 
educational and healthcare system,8 he said, but predicted 
that as soon as President Niyazov dies, &the Rukhnama stuff 
will go away,8 and that it was tolerated now only because 
people knew it would later &fade away.8  Arian also did not 
see Turkmenistan as fertile ground for Islamic extremism, 
either from a Taliban-like entity or imported from Iran. 
&People here dislike Iran,8 he claimed and they are 
&staunchly Sunni.8  More importantly, the fact that there 
was no existing organized group in Turkmenistan, Islamic or 
otherwise, meant that such a movement would have difficulty 
taking root. 
 
Comment 
 
ASHGABAT 00000704  004.2 OF 004 
 
 
------- 
 
¶16.   (C) All aspects of the Pakistan-Turkmenistan 
relationship seem to be declining because Niyazov feels 
slighted by the lack of attention from Pakistan,s 
leadership.  Nonetheless, the Pakistanis are undaunted in 
their attempts to engage in Turkmenistan on many fronts, 
including economics, cultural and educational exchange, 
proposing new transport connections and most notably, moving 
forward on the Trans-Afghan Pipeline.  While things may get 
back on track if the Pakistanis manage to secure a high-level 
visit during October,s Independence Day festivities, but 
despite the sincere efforts by Pakistan, the government of 
Turkmenistan may remain a frustrating and unreliable business 
partner. END COMMENT. 
 
JACOBSON 
JACOBSON