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P 031346Z MAR 09
FM AMEMBASSY ASHGABAT
TO RUEHC/SECSTATE WASHDC PRIORITY 2396
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
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RUEKJCS/SECDEF WASHINGTON DC
RUEHVEN/USMISSION USOSCE 3359

UNCLAS SECTION 01 OF 02 ASHGABAT 000289 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN 
 
E.O. 12958: N/A 
TAGS: ECON SOCI TX
SUBJECT: TURKMENISTAN: BUSINESS BOOMING FOR PROVINCIAL 
ENTREPRENEUR 
 
¶1. (U) Sensitive but unclassified.  Not for public internet. 
 
¶2. (SBU) SUMMARY: The deputy director of a growing 
Turkmenabat privately-held company attributed its success to 
the founder's technical savvy and the stability of its 
workforce.  Engaged in a wide range of activities, most 
prominent of which is advertising, the company also plays an 
active role in charitable activities and provides its 
employees with generous benefits.  While presenting a "sky's 
the limit" outlook about the company's future prospects, the 
businessman did nonetheless cite the unavailablity of 
business loans as a hindrance on the company's operations and 
as the primary area for Government action to improve the 
conditions for private sector development.  END SUMMARY. 
 
A COMPANY WITH DIVERSE LINES OF BUSINESS ... AND A HEART 
 
¶3. (SBU) On February 27, Political Officer met with the 
Deputy Director of the Turkmenabat-based private firm 
AvtoTrans, Shakir Kerimberdiyev.  The company's advertising 
business generates more than 50 percent of the its revenues 
and to date is its most profitable activity.  The company 
controls 90 percent of the billboards in Turkmenabat and 
Turkmenbashy and about 30 percent in Ashgabat and Mary.  In 
addition to advertising, the company engages in a broad range 
of other activities, including:  professional photocopying, 
printing and binding; English, French, German and Turkmen 
language instruction for children; translation services; 
trucking; construction; retailing; restaurants; and dry 
cleaning.  AvtoTrans also supports a range of charitable 
activities, such as funding participation by Turkmen athletes 
at tournaments; supporting a service organization for 
invalids; funding a boarding school for orphans; and 
co-sponsoring a youth initiative in computer training with 
NGO Counterpart International. 
 
GOOD BENEFITS AND STABILITY IN THE WORKFORCE 
 
¶4. (SBU) Having more than 100 employees, Kerimberdiyev 
indicated that AvtoTrans was the largest private employer in 
Turkmenistan.  He attributed the company's success primarily 
to its general director, who had a strong technical 
education.  According to Kerimberdiyev, the Soviet system 
trained workers well and the general director is skilled at 
determining which workers to hire.  He highlighted the 
continuity within the company's administrative staff.  Among 
the 11 people working in administration, six have been 
employed since the company's start in 1993.  The company also 
provides employee benefits such as subsidized lunches, 
selling merchandise to employees at cost and allowing 
employees to buy merchandise on credit.  As a result, there 
is little turnover in the company's workforce. 
 
NEVER TURN DOWN AN OFFICIAL REQUEST 
 
¶5. (SBU) Kerimberdiyev also mentioned the company's good 
working relations with government officials.  As an example, 
he pointed to Turkmenabat's recent decision to rent a large 
and well-located retail building to AvtoTrans because the 
city considers the company to be its preferred partner.  He 
shared that the general director's policy has been never to 
refuse a request from government officials to do something -- 
receiving payment was not the first consideration. 
Kerimberdiyev averred that the success of this approach is 
shown by the fact the the company is thriving long after many 
of the officials in question are no longer around.  He 
mentioned the role of the Government Statistics Bureau in 
setting prices for all goods that are sold.  He pointed out 
that working with this bureau involved the company educating 
the bureau's staff about differences in costs and quality of 
goods that would justify the price that the company wants to 
charge.  While he acknowledged that the Bureau's role could 
be cumbersome, he also thought it performed a useful service 
in preventing inflated prices. 
 
ASHGABAT 00000289  002 OF 002 
 
 
 
LACK OF FINANCING IS AN OBSTACLE TO GROWTH 
 
¶6. (SBU) Competition from state-owned enterprises does not 
pose a challenge for AvtoTrans because, according to 
Kerimberdiyev, they do not offer the same services and 
products.  The lack of credit, however, is a problem. 
Although the company has never borrowed money in the past, it 
would now like to find financing in order to construct a 
building, but cannot find a lender.  He also said that the 
lack of financing to provide working capital is a problem. 
For example, the local government had ordered USD 50,000 in 
goods and services from the company in preparation for the 
upcoming People's Council meeting to be held in Turkmenabat. 
Even though AvtoTrans had to incur expenses up front, it ill 
take one year for the company to get paid, because payment 
can be approved only by the central government in Ashgabat. 
 
¶7. (SBU) While small private businesses are growing in 
number, Kerimberdiyev did not see much threat of competition 
for AvtoTrans.  Since most of AvtoTrans' business involves 
high technology equipment, a prospective competitor would 
need both significant capital to buy equipment and properly 
train specialists.  He acknowledged that working primarily in 
Lebap Province was an advantage since the company had a near 
monopoly in the market.  The company's activities in other 
provinces began when officials were transferred from Lebap 
and invited AvtoTrans to do business at their new location. 
Overall, the deputy director thought the provincial 
authorities in Lebap had taken many positive small steps 
during the past six months to support the private sector, but 
the lack of credit remained the key obstacle that he would 
like to see the Government address. 
 
¶8. (SBU) COMMENT:  A successful business model, accompanied 
by generous worker benefits and charitable contributions, 
make AvtoTrans a standout in Turkmenistan's private business 
sector, especially in Lebap Province.  Indeed its location, 
beyond the range of vision of Ashgabat's functionaries, may 
have played a role in allowing the company to prosper without 
attracting unwanted attention.  The deputy director suggested 
as much, saying the company has no plans to expand 
nationally, but intends to keep its focus on doing business 
in Lebap.  END COMMENT. 
MILES