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UNCLAS SECTION 01 OF 04 BISHKEK 001521 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
DEPARTMENT FOR SCA/CEN 
 
E.O. 12958: N/A 
TAGS: PGOV PREL PINR KCRM KG
SUBJECT: DAS FEIGENBAUM'S ROUNDTABLE MEETINGS WITH CIVIL 
SOCIETY AND NGOs IN KYRGYZSTAN 
 
BISHKEK 00001521  001.2 OF 004 
 
 
Sensitive but unclassified.  Not for Internet distribution. 
 
¶1. (U) SUMMARY:  On October 17 and 18, DAS Evan Feigenbaum 
held separate roundtable discussions with political 
analysts, democracy NGO leaders, economic development NGO 
leaders.  Participants offered a range of views about what 
would happen as a result of planned opposition protests on 
November 2, though most thought there government and 
opposition would reach some sort of compromise before then. 
All agreed there was a serious need for constitutional and 
judicial reform, both to protect democratic rights and to 
improve the business climate.  DAS Feigenbaum also visited a 
USAID-funded condominium association project where he saw 
the tangible benefits of grassroots organization and 
initiative:  better living conditions and increased property 
values.  END SUMMARY. 
 
Political Analysts:  Lack of Policy, Talent 
------------------------------------------- 
 
¶2. (SBU) On October 18, DAS Feigenbaum met with a group of 
Kyrgyz and American political observers.  The group 
generally agreed there were serious governance problems in 
Kyrgyzstan, and they were concerned about the opposition's 
upcoming mass protest on November 2, though several thought 
the government and opposition might reach some sort of 
compromise ahead of the protest.  Describing the current 
political struggle, former Foreign Minister Muratbek 
Imanaliyev said that the problem was not with the system of 
government, but stemmed from the current government lacking 
any policy or "sense of national interest."  The current 
leadership operated from an outdated point of view; it had 
no understanding of the West, and an even "worse conception" 
of the East.  As a result, foreign partners did not take 
Kyrgyzstan seriously as a country.  Lamenting a change from 
previous eras, Imanaliyev said the absence of an educated 
"elite" with a shared sense of nationhood and national 
interest hurt Kyrgyzstan today.  Where there is such an 
elite, power is just a means to achieve goals; where there 
is no elite, there is just a struggle for power.  Imanaliyev 
said the current crisis was merely a fight to replace 
Bakiyev. 
 
¶3. (SBU) Several in the group thought that the November 2 
protest would last as long as there was money to support the 
protesters but that nothing would change in the end.  Former 
Director of the International Institute for Strategic 
Research Valentin Bogatyrev jokingly did the math on how 
much it would cost to put a protestor on the street and how 
many days a crowd would need to remain on the street to 
threaten the government.  Nursuluu Akhmetova, from the 
Business Environment Improvement Project, thought that the 
government would stay in power.  She agreed that the 
opposition had no goal beyond seizing power for themselves, 
but she also criticized the government's meager attempts to 
make policy.  Bogatyrev, however, said he thought Bakiyev 
was underestimating the capacity of the opposition to rally 
support in Bishkek and in the regions, but that the "fate of 
November 2" would be resolved beforehand through compromise 
and offering new positions to the opposition.  Bakiyev, he 
said, was more flexible than Akayev, and could "adopt new 
views." 
 
¶4. (SBU) Nurlan Sadykov, of the Institute for Constitutional 
Policy, warned that a provocation from either side was 
possible on November 2.  He said the opposition leaders were 
trying to "calm down" their most extreme members, but they 
were not strong enough to control all elements that would be 
in the crowd on November 2.  He hoped the President would 
"find the strength" to reach out to the opposition, though 
Imanaliyev cracked that the opposition would see that as 
 
BISHKEK 00001521  002.2 OF 004 
 
 
weakness.  Erkina Ubysheva, of the Association of Civil 
Society Support Centers, said civil society viewed the 
current situation as a "crisis."  She said that civil 
society ideally should be able to play a mediating role, but 
Kyrgyz civil society was now seen as "the opposition," 
because some civil society leaders had joined the 
opposition. 
 
¶5. (SBU) DAS Feigenbaum was asked about an AKIpress report, 
based on a press release from the Kyrgyz Foreign Ministry, 
that he had told FM Jekshenkulov major U.S. firms are ready 
to invest in Kyrgyzstan, especially in the energy sector. 
Feigenbaum explained that the press report was half right: 
American firms are interested to invest in Kyrgyzstan, but, 
he noted, what he actually said to Jekshenkulov was that 
this only would be possible if the Kyrgyz government took 
significant steps to improve the business climate, move 
forward on privatization in the energy sector, and tackle 
corruption.  DAS Feigenbaum noted that Kyrgyzstan had 
excellent natural resources and great potential in hydro- 
power, and there were eager markets for electric power in 
the south, as far away as Pakistan, but the necessary 
investment would only come when there was rule of law, 
transparency, and a better atmosphere for private investors. 
The group agreed that Kyrgyzstan needed to take further 
steps to reduce barriers to trade. 
 
Democracy NGOs:  No Leaps Forward or Backward 
--------------------------------------------- 
 
¶6. (SBU) On October 17, DAS Feigenbaum and the Ambassador 
held a democracy roundtable with Edil Baisolov of the 
Coalition for Democracy, Azamat Kerimbekov of ABA/CEELI, 
Marat Tazabekov of AKIpress, Elvira Sarieva from Internews, 
Natalie Losekoot of the Eurasia Foundation, and Cholpon 
Jakupova, Adilet Legal Clinic.  DAS Feigenbaum asked the 
group about constitutional reform.  The general consensus 
was that President Bakiyev had co-opted the constitutional 
reform process and that the timing of reform was 
unpredictable.  The group generally believed that the public 
would not really have a choice in the matter, and that 
ordinary people were not terribly interested in 
constitutional reform, anyway.  Baisolov went as far to 
describe the process as "theater of the absurd."  But 
according to Jakoupova, there was a serious need for 
constitutional reform because of the lack of justice, due to 
the corrupt dependence of judges on the president and 
parliament.  In addition, there was a lot of fear in 
Kyrgyzstan today. 
 
¶7. (SBU) There was no consensus in the group as to what 
would happen in the current political struggle, as it was 
unclear who was in the stongest relative position.  On the 
one hand, the group seemed to feel that the President was 
weak.  Bakiyev had taken steps to stall constitutional 
reform, had reorganized the security services, and had 
attempted to gain some support by bringing the north-south 
divide out into the open.  But on the other hand, the group 
conceded that the steps he had taken had given him more 
control and helped him to be more effective at clamping down 
on free speech.  According to Baisolov, the window of 
opportunity for reform was very small.  The bottom line for 
the group appeared to be that this fall will not represent 
any great leaps forward or backwards and that there was wide 
scope for compromise. 
 
Economic Development NGOs:  Judicial Reform Needed 
--------------------------------------------- ----- 
 
¶8. (SBU) On October 18, DAS Feigenbaum met with a group of 
individuals representing economic and enterprise development 
 
BISHKEK 00001521  003.2 OF 004 
 
 
NGOs.  Margarita Cherikbaeva of the EBRD Micro and Small 
Enterprise Finance Facility described the success of her 
program's work with banks to expand loans to small and 
medium enterprises.  The program had placed over USD 
80,000,000 in loans with an average size of less than USD 
2400 through lenders who had been trained by USAID technical 
assistance to evaluate cash flow instead of traditional land 
or equipment collateral.  The program had grown rapidly and 
was evidence of the strength of the small/micro sector in 
this country.  Tatiana Kim of the Chamber of Tax Accountants 
spoke passionately about the drastic need for civil service 
reform in Kyrgyzstan.  According to her, the number of civil 
servants had increased five-fold since Soviet times, but the 
level of compensation was now absurdly low, creating 
incentives for corruption.  Tax reform also was an urgent 
need, and she believed the size of the shadow economy was 
far greater than the government estimates.  Umar Shavarov of 
the International Business Council, a lobbying group for 
Kyrgyz and foreign companies, agreed with Kim that judicial 
reform was the number one concern of business.  He said 
"everything in Kyrgyzstan is possible; everything is 
impossible.  It just depends on how you play the 
[corruption] game."  Christine Smith, AmCham's Executive 
Director, also shared concerns about the need for judicial 
reform, and said her organization was looking to do more to 
coordinate with her counterparts in the region.  Isaac 
Swartsman, an advisor to the USAID-funded economic policy 
reform project, spoke about the continued need to respect 
the independence of the Central Bank, and agreed with 
comments that the drug economy and money laundering both may 
be vastly underestimated in the Kyrgyz Republic because of 
the open foreign exchange regime. 
 
Condominium Association:  Tangible Benefits 
------------------------------------------- 
 
¶9. (U) On October 18, DAS Feigenbaum visited a USAID-funded 
project to develop local condominium associations.  Under 
the Local Government Initiative (LGI), USAID has helped to 
bring 59,000 units into such associations, and a National 
Condominium Association, representing condominium 
associations from across the country, was formed in July 
¶2006.  Ludmila Salyakaeva, Chair of Svobodny Dom 
Condominium, gave an overview of the assistance provided by 
USAID, including co-funding roof repairs, help with 
registration, and training for the association.  The 
benefits of condominium ownership of the common areas of the 
building were readily apparent.  The condominium 
association's building had a well-kept garden with a new 
fence, a repaved entrance path, freshly painted hallways and 
a new roof.  Standing in contrast across the yard, an 
identical building -- but without a condominium association 
-- had a poorly kept yard surrounded by an old wooden fence, 
an entrance path that was in poor shape, and dark, smelly 
hallways. 
 
¶10. (U) Having a condominium association also encouraged 
residents to make improvements to their own apartments. 
Salyakaeva showed the top floor apartment that had recently 
renovated.  She noted that she would have never purchased, 
much less renovated, a top floor apartment if it wasn't for 
the association.  Without an association, any roof leak 
ended up being the problem of the apartment owners on the 
top floor.  But with the association, roof repairs were the 
responsibility of all members.  There are 33 units in the 
apartment building, and most of the owners made improvements 
after the association was formed.  Forming the association 
also had a significant impact on property values.  According 
to Salyakaeva, the value of a three-room apartment in her 
building was USD 27,000.  The identical apartment in the 
other building had an asking price of only USD 18,000.  She 
 
BISHKEK 00001521  004.2 OF 004 
 
 
also noted that there was a mortgage market in Kyrgyzstan, 
but most people used their own savings and loans from family 
or friends to purchase a home 
 
¶11. (U) Despite the benefits, not all buildings have formed 
condo associations, according to Salyakaeva.  The City 
Housing Management Company still exists, and some people 
just prefer to keep things as they are.  Salyakaeva said it 
was a matter of attitude; someone has to want to organize 
it, manage it and collect dues.  Finally, the USAID project 
was established as a way of introducing grass-roots 
democracy.  When asked whether people in housing 
associations tend to become more active, her reply was no. 
She believed that active people form and are in housing 
associations.  Hence, associations probably don't make 
people more active, but provide those who are with an outlet 
and the tools to make meaningful change. 
 
¶12. (U) DAS Feigenbaum has cleared this cable. 
 
YOVANOVITCH