VZCZCXRO8960
RR RUEHAG RUEHAST RUEHBI RUEHCI RUEHDBU RUEHDF RUEHIK RUEHLH RUEHLN
RUEHLZ RUEHNEH RUEHPW RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHAH #0335/01 0721517
ZNR UUUUU ZZH
R 131517Z MAR 09
FM AMEMBASSY ASHGABAT
TO RUEHC/SECSTATE WASHDC 2474
INFO RUCNCIS/CIS COLLECTIVE
RUCNMEM/EU MEMBER STATES COLLECTIVE
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHDC
RHEHNSC/NSC WASHDC
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHDC

UNCLAS SECTION 01 OF 02 ASHGABAT 000335 
 
SENSITIVE 
 
SIPDIS 
 
STATE FOR SCA/CEN, EUR/ACE, EEB 
AID/W FOR EE/EA 
 
E.O. 12958: N/A 
TAGS: PGOV PREL EAID TX
SUBJECT:  TURKMENISTAN:  MICROFINANCE APPEARS INCREASINGLY POSSIBLE 
 
¶1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
¶2. (SBU) SUMMARY:  On February 27, Turkmenistan's first-ever 
conference on microfinance was organized in Ashgabat by the UN 
Development Program (UNDP).  Titled "Microfinance - A Tool to 
Enhance Private Sector Development in Turkmenistan:  International 
Experience, " the conference came in response to a request by 
Tuwakmamed Japarov, Turkmenistan's Deputy Prime Minister responsible 
for the economic sector.  Workshop participants included 
representatives from the Ministry of Finance, Ministry of Economy 
and Development, Central Bank, local banks, entrepreneurs and 
international donor organizations.  As follow up, UNDP sent a letter 
endorsed by participating donor agencies to Japarov asking that he 
designate a focal point for this issue and organize a working group 
of relevant stakeholder.  Following President Berdimuhamedov's March 
6 speech to the Council of Elders, in which he announced a desire 
"to improve the banking system in the villages and to establish the 
provision of micro-credits for purposes of the stimulation of the 
construction of the rural objects of different designation," it 
appears that the elusive goal of microcredit in Turkmenistan appears 
increasingly possible.  END SUMMARY 
 
DONORS INTRODUCED VARIOUS FORMS OF MICROCREDIT 
 
¶3.  (SBU) During a February 27 conference on microfinance, organized 
by UNDP, the Country Representative of the European Bank for 
Reconstruction and Development (EBRD) presented its programs 
implemented in Eastern Europe and NIS, including specific examples 
of how bank-based micro-credits can contribute to the growth of 
small businesses.  Titled "Microfinance - A Tool to Enhance Private 
Sector Development in Turkmenistan:  International Experience, " the 
conference came in response to a request by Tuwakmamed Japarov, 
Turkmenistan's Deputy Prime Minister responsible for the economic 
sector.  The Deputy Resident Representative of UNDP/Turkmenistan 
provided an overview of its recent program for rural women in 
Turkmenistan improved economic conditions for poor families through 
small grants.  A visiting EU-TACIS microfinance specialist presented 
different types of community-based savings and credit unions, while 
an EU-TACIS agriculture specialist described his experience in 
developing a community-based credit union in North Cornwell in the 
United Kingdom. 
 
¶4.  (SBU) The Bishkek-based Chief of Party for USAID's Central Asian 
Micro-Finance Alliance (CAMFA II Project) provided an overview of 
the types and structure of micro-finance institutions in Central 
Asia.  Through the presentation, it became clear that all Central 
Asian countries except Turkmenistan have significantly improved the 
legal environment for microfinance, which has increased 
opportunities to promote economic activity in even the most 
disadvantaged groups of society.  USAID/Turkmenistan's Economic 
Growth Program Management Specialist introduced the savings and 
credit union development program implemented in Uzbekistan with 
USAID's support by the U.S.-based NGO World Council for Credit 
Unions (WOCCU).  The presentation highlighted the growing number of 
non-banking credit unions in Uzbekistan. 
 
AFTER ACTION RESULTS IN LETTER TO DEPUTY PRIME MINISTER 
 
¶5.  (SBU) After the presentations, participants discussed in small 
groups possible paths forward to start microfinance activity in 
Turkmenistan.  Key recommendations identified by the groups were to 
amend existing legislation to allow microfinance, to build the 
capacity of state agencies and banking sector in dealing with 
microfinance, as well as to launch pilot project with interested 
stakeholders. 
 
¶6.  (SBU) In the week after the conference, participating entities 
collected legislative examples, case studies and general 
microfinance information.  A joint letter drafted by participating 
donors, along with the assembled materials and workshop 
recommendations, was sent by UNDP Resident Representative to 
Japarov.  EBRD indicated that it is willing to provide technical 
assistance to improve the legal, regulatory and institutional 
framework for microfinance.  The letter also asked that Japarov 
designate a focal point for microfinance issues and organize a 
working group of relevant stakeholder. 
 
¶7.  (SBU) COMMENT:  Separate from the conference, USAID's Program 
Management Specialist learned from local NGO Union of Economists 
 
ASHGABAT 00000335  002 OF 002 
 
 
that Turkmenistan's parliament has included plans to draft a law on 
microfinance as part of its the five-year work plan and have 
requested assistance in drafting it.  Following President 
Berdimuhamedov's March 6 speech to the Elders' Council, in which he 
announced a desire "to improve the banking system in the villages 
and to establish the provision of micro-credits for purposes of the 
stimulation of the construction of the rural objects of different 
designation," it appears that the elusive goal of microcredit in 
Turkmenistan appears increasingly attainable.  END COMMENT. 
 
MILES