VZCZCXRO2470
PP RUEHAG RUEHAST RUEHBI RUEHCI RUEHDBU RUEHDF RUEHIK RUEHLH RUEHLN
RUEHLZ RUEHPW RUEHROV RUEHVK RUEHYG
DE RUEHAH #1221/01 3130717
ZNR UUUUU ZZH
P 090717Z NOV 07
FM AMEMBASSY ASHGABAT
TO RUEHC/SECSTATE WASHDC PRIORITY 9679
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUCNCIS/CIS COLLECTIVE
RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHAK/AMEMBASSY ANKARA 2962
RUEHBJ/AMEMBASSY BEIJING 0782
RUEHKO/AMEMBASSY TOKYO 0658
RUEHIT/AMCONSUL ISTANBUL 1235
RUEATRS/DEPT OF TREASURY WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RHEHNSC/NSC WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHDC
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHINGTON DC
RUEHVEN/USMISSION USOSCE 1880

UNCLAS SECTION 01 OF 02 ASHGABAT 001221 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EEB 
PLEASE PASS TO USTDA DAN STEIN 
ENERGY FOR EKIMOFF/THOMPSON 
 
E.O. 12958: N/A 
TAGS: PREL EPET EAID EFIN EINV TX
SUBJECT: ADB IN TURKMENISTAN:  OUT OF TOUCH BUT LOOKING FOR 
A NEW MISSION 
 
 
 ¶1. (U) Sensitive but unclassified.  Not for public Internet. 
 
¶2.  (SBU) SUMMARY:  The Asian Development Bank (ADB), long 
dormant in Ashgabat, especially after the Government of 
Turkmenistan failed to respond decisively to the bank's 
initial feasibility study for a 
Turkmenistan-Afghanistan-Pakistan (TAP) pipeline, is seeking 
to revive its mission in Turkmenistan.  ADB officials told 
the Charge in a November 8 meeting that they want to expand 
their operations in Turkmenistan, and to that end are 
currently conducting a seminar on ADB operating policies and 
procedures in order to promote closer ties with government 
officials.  However, ADB personnel so far seem ill-informed 
about the country they are proposing to assist.  END SUMMARY. 
 
ADB ORGANIZES SEMINAR ON OPERATIONAL POLICIES AND PROCEDURES 
 
¶3.  (SBU) In a November 8 meeting with the Charge, Asian 
Development Bank (ADB) Country Economist Xuelin Liu and Head 
of ADB's Central Asia Regional Economic Cooperation Unit 
(CAREC) Craig Steffensen said they are conducting a seminar 
on ADB operating policies and procedures for Turkmenistani 
government officials.  ADB had originally hoped for a 
three-day, high-level seminar, but scaled it back after a 
tepid response from the government.  The seminar, hosted by 
the Central Bank and primarily attended by heads of 
departments across all ministries, covers project preparation 
instructions and provides an overview of CAREC.  Although 
Turkmenistan joined ADB in August 2000, ADB has not provided 
loans for any major projects and has provided only very 
limited technical assistance in recent years.  Following 
President Niyazov's death, however, ADB decided to explore 
new development project opportunities. 
 
TURKMENISTAN-AFGHANISTAN-PAKISTAN PIPELINE:  NO ACTION 
 
¶4.  (SBU) Liu said that ADB has carried out two feasibility 
studies for a Turkmenistan-Afghanistan-Pakistan (TAP) 
pipeline, as well as a market research project.  However, to 
date, Turkmenistan has not given a green light to move 
forward with the TAP (now the TAPI, given India's inclusion 
in the project).  She expressed some frustration that 
"sometimes the government gives no response...to suggested 
dates."  ADB is "pushing hard for a contract," but Liu and 
her colleagues have the impression that TAP is at the bottom 
of Turkmenistan's list of pipeline priorities, following the 
Caspian littoral pipeline to Russia, the China project, and 
notional interest in a Trans-Caspian pipeline. 
 
¶5.  (SBU) Liu was quite surprised to hear about the expanded 
Turkmenistan International Oil and Gas Exhibition (TIOGE) 
that will take place November 13-15.  She said that because 
it was not important in the past, ADB had not planned to 
attend this year, but she would like to attend if possible. 
(NOTE:  Currently, over 3,000 people have registered to 
attend TIOGE, and conference organizers have taken names for 
a waiting list for weeks.  At this point, there is no 
possibility for anyone new to register for the conference. 
END NOTE.) 
 
ADB SAYS CENTRAL BANK IS LOOKING FOR LOANS 
 
¶6.  (SBU) Steffensen said the Central Bank is considering 
borrowing around $1 billion from an international financial 
institution to build hospitals and schools.  If Turkmenistan 
agrees to enter into lending programs with ADB, Steffensen 
said that, from ADB's perspective, transportation and energy 
are the most likely sectors for loans.  Previous to January, 
Turkmenistan did not participate in CAREC meetings, but since 
 
ASHGABAT 00001221  002 OF 002 
 
 
President Niyazov's death, Turkmenistan has attended all 
CAREC meetings.  Steffensen asked that the Embassy mention 
CAREC in its meetings with officials, adding that other 
countries in the region want Turkmenistan to join.  The 
Charge explained that Turkmenistan does not so far join 
regional organizations and is not likely to join CAREC 
because regional powers would then pressure Turkmenistan to 
join other organizations, like CSTO AND SCO, threatening 
their policy of neutrality. 
 
¶7.  (SBU) COMMENT:  Liu's underestimation of the importance 
of TIOGE -- and hence the changing landscape of the oil and 
gas sector -- as well as Steffensen's misunderstanding about 
Turkmenistan's reticence to join CAREC suggest a surprising 
lack of knowledge about today's Turkmenistan.  ADB maintains 
a locally staffed office in Ashgabat but does not have a 
resident representative. 
 
¶8.  (SBU) COMMENT CONTINUED:  The report that Central Bank 
Chairman Abilov is interested in a $1 billion loan for 
schools and hospitals is consistent with November 2 comments 
of European Bank for Reconstruction and Development Resident 
Office Head Tony Myron, although Myron quoted a figure of $2 
billion.  Myron posited that Abilov might feel that he needs 
to keep a certain amount of funds in reserve since many 
ministries are pressuring him to fund projects, "especially 
the Ministry of Textiles."  And it should not be forgotten 
that Berdimuhamedov has pledged $1 to his pet project, the 
Avaza tourist zone on the Caspian coast.  It's clear better 
coordination and information sharing among multilateral 
lenders is needed.  END COMMENT. 
HOAGLAND