VZCZCXRO9711
PP RUEHAG RUEHAST RUEHBI RUEHCI RUEHDF RUEHIK RUEHLH RUEHLN RUEHLZ
RUEHPW RUEHROV RUEHVK RUEHYG
DE RUEHAH #0179/01 0361048
ZNR UUUUU ZZH
P 051048Z FEB 08
FM AMEMBASSY ASHGABAT
TO RUEHC/SECSTATE WASHDC PRIORITY 0213
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUCNCIS/CIS COLLECTIVE
RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHAK/AMEMBASSY ANKARA 3339
RUEHBJ/AMEMBASSY BEIJING 1155
RUEHKO/AMEMBASSY TOKYO 1023
RUEHIT/AMCONSUL ISTANBUL 1592
RUEHVEN/USMISSION USOSCE 2184
RUEATRS/DEPT OF TREASURY WASHDC
RUCNDT/USMISSION USUN NEW YORK 0711
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

UNCLAS SECTION 01 OF 02 ASHGABAT 000179 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, SCA/PPD, EUR/ACE, EEB 
USAID/W FOR EE/EA 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON EFIN EAID TX
SUBJECT:  TURKMENISTAN:  WORLD BANK OUTLINES RE-ENGAGMENT 
 
 
¶1. (U) Sensitive but unclassified.  Not for public Internet. 
¶2.  (SBU) SUMMARY: During the last week in January, a World 
Bank visiting delegation met with government officials and 
resident donor nation representatives to discuss 
re-engagement with Turkmenistan.  The Government of 
Turkmenistan's priorities for assistance from the World Bank 
are exchange-rate unification and rural-development strategy. 
 Other possible areas for cooperation include as market 
forecasting, improving public-sector use of government 
assets, removing regulatory and administrative barriers to 
public-sector development, and reforming the agricultural 
subsidies policy.  According to one World Bank official, the 
bank plans to engage slowly, through one or two investment 
projects in rural infrastructure and social services. 
Because the World Bank has not spent much time here for 
years, these officials also have a lot to learn about 
engaging with the Government of Turkmenistan before they can 
be effective.  Close coordination with other donors and 
consistent, on-the-ground engagement are essential to achieve 
results.  Further, it is essnetial to listen carefully to the 
Turkmen and then help them prioritize how to reach their 
ambitious goals.  END SUMMARY. 
¶3. (SBU) On January 31, the World Bank visiting delegation 
met with various donors to discuss their experience and ask 
for suggestions for working in Turkmenistan.  Annette Dixon, 
the World Bank's Country Director for Central Asia, said that 
Government of Turkmenistan officials have some idea of what 
they want.  However, due to the fact that Turkmenistan had 
not engaged with the World Bank for some time, government 
officials' expectations were unrealistic.  For example, 
Turkmen officials had no idea what loan terms to expect. 
Officials also expressed surprise at the difficulty of 
engaging Government of Turkmenistan officials in dialogue, on 
which the World Bank places a priority because of its belief 
in serious consultations with a government before initiating 
assistance projects. 
NEED FOR CAPACITY BUILDING 
¶4. (SBU) The World Bank officials noted the huge demand and 
potential for capacity building and technical assistance. 
They mentioned that the government had requested assistance 
setting up a graduate-level economics program.  The donors 
agreed with the need for capacity building, but emphasized 
that this must occur at a very fundamental level, because 
Turkmenistan must rebuild after many years with an extremely 
weak education system. 
PLANNED PROGRAM OF ASSISTANCE 
¶5.  (SBU) Mehrnaz Teymourian, World Bank Country Program 
Coordinator for Central Asia, hosted a roundtable discussion 
on the World Bank Group's Program of Assistance to 
Turkmenistan on February 1.  She said the Government of 
Turkmenistan's priorities for assistance from the World Bank 
were exchange-rate unification and rural-development 
strategy.  She said the World Bank will engage slowly, 
through one or two investment projects in rural 
infrastructure and social services such as health, rural 
water, or rural roads.  The World Bank also foresees working 
with the economic ministries and entities on economic 
training such as market forecasting, improving public-sector 
use of government assets, removing regulatory and 
administrative barriers to public-sector development, and 
reforming the agricultural subsidies policy.  Teymourian said 
the World Bank also plans to pursue co-financing arrangements 
to ensure ownership on both sides of the relationship. 
However, the parties must resolve many issues before lending 
can commence, such as data sharing and the need for 
Government of Turkmenistan officials to participate actively 
in the consultative process of assessing areas of need. 
¶6.  (SBU) According to Teymourian, so far, Turkmenistan has 
requested programs in banking supervision and regulation, 
modernization of the payments system, introduction of the 
Pension Reform Options Software Toolkit (PROST) and pension 
 
ASHGABAT 00000179  002 OF 002 
 
 
reform, improvement of national account statistics, 
measurement of living standards, a survey of small and medium 
enterprises, and an introductory seminar on the World Bank. 
In addition, Turkmenistan requested assistance in assessment 
of the informal economy, development of leasing transactions, 
development of a competitive insurance market, development of 
a securities market, introduction of non-cash payment 
systems, strategizing a rural-development program, anti-money 
laundering and cardholder funds transfer workshops, 
establishing a financial-intelligence unit, and development 
of sector strategies for the Ministry of Motor 
Transportation.  The World Bank will work on the Interim 
Strategy Proposal (ISP) from February through April and 
present the ISP to the World Bank Board of Directors in May. 
(NOTE:  An ISP is usually the Bank's first stage of 
re-engagement and typically last 18 months.  END NOTE.) 
¶7. (SBU) On a slide on the "New Government's Priorities," the 
World Bank listed the Avaza tourist zone as part of 
Turkemnistan's ambitious agenda.  On the same slide, they 
quoted from President Berdimuhamedov's New Revival ideology: 
"...and ultimately make Turkmen people's life happier." 
Teymourian expressed surprise that Central Bank Chairman 
Geldimurat Abilov could not assist the World Bank delegation 
in meeting with President Berdimuhamedov.  (NOTE:  Currently, 
the Foriegn Ministry, with the advice and consent of the 
Ministry of National Security, controls nearly all access to 
the president by foreigners.  END NOTE.) 
¶8. (SBU) COMMENT:  World Bank officials showed foresight by 
asking to meet with donors many times throughout their 
week-long visit to Ashgabat.  To their credit, they 
proactively asked many questions to better understand the 
unique state of affairs in Turkmenistan, issues which 
differentiate Turkmenistan from other CIS countries.  Because 
the World Bank has not spent much time here for years, these 
officials also have a lot to learn about engaging with the 
Government of Turkmenistan before the Bank can be effective. 
Close coordination with other donors and consistent, 
on-the-ground engagement are essential to achieve results. 
¶9.  (SBU)  COMMENT CONTINUED:  There is another message 
embedded here.  The Turkmen are amazingly fast learners.  In 
meetings six months ago, we never would have heard such a 
detailed to-do list as they present the World Bank (see para 
six above).  More sobering, their need dwarfs the 
international community's ability to respond.  It is 
essential to listen carefully to the Turkmen and then help 
them prioritize how to reach their ambitious goals.  END 
COMMENT. 
HOAGLAND