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UNCLAS SECTION 01 OF 05 ASHGABAT 000461 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN 
 
E.O. 12958: N/A 
TAGS: PGOV TX
SUBJECT:  TURKMEN GOVERNMENT VIEWS ON 2009 FIRST QUARTER RESULTS 
 
¶1. (U) Sensitive but Unclassified.  Not for Internet distribution 
 
¶2. (SBU) SUMMARY: President Berdimuhamedov chaired an expanded 
session of the Cabinet of Ministers on April 6 for the purpose of 
reviewing social and economic development in the first quarter of 
the year, as well as a number of priority policy issues.  Although 
the session declared that the first quarter was generally stable, it 
revealed shortcomings in the field of livestock development for 
which President Berdimuhamedov severely reprimanded the responsible 
officials.  Summing up the session, Berdimuhamedov identified major 
successes in early 2009 and outlined goals to be achieved in 2009. 
As a result of the session, Berdimuhamedov issued decrees 
authorizing extravagant multimillion dollar construction contracts. 
END SUMMARY. 
 
ECONOMIC PARAMETERS 
 
¶3. (SBU) At the April 6 session of Turkmenistan's Cabinet of 
Ministers session, Deputy Chairman of Cabinet of Ministers for 
Economy, Tuwakmammet Japarov reported on economic developments 
during the first quarter of  2009.  During the reporting period, 
Japarov claimed a stable increase in macroeconomic indices, caused 
by the steady development of all sectors, in particular, industry, 
construction and trade.  This had led to an increase the welfare of 
population, he claimed.  In February, the average monthly wages in 
Turkmenistan exceeded last year's analogous index by 12.4%.  Finance 
Minister Gochyev then reported that the budget of Turkmenistan has a 
large surplus. According to the results of the first quarter of this 
year, the revenues were 2.8 times more and expenditures were 2.1 
times more than the same period of in 2008.  More than 80% of the 
budget funds have been directed towards implementing social policy. 
 
 
¶4. (SBU) According to the report of the Chairman of the Board of the 
Central Bank of Turkmenistan Guvanchmyrat Goklenov, the step by step 
introduction of the redenominated manat continues.  He noted that 
almost 79.8% of available money in circulation is comprised of the 
newly denominated manats and coins.  Minister of Economy and 
Development Bashimmyrat Hojamukhammedov reported on the progress of 
implementing President Berdimuhamedov's national program on 
reforming the social-living conditions of the population of the 
provinces.  He provided information regarding work completed in each 
province and also the work planned for this year.  Noting the need 
for a constant improvement in the professional and educational level 
of officials, Berdimuhamedov ordered the Academy of State Service to 
conduct a certification of mayors and other executives of local 
administrations.  Deputy Chairman of the Cabinet of Ministers for 
Trade and Textile Hojamuhammet Muhammedov reported on a significant 
increase in the production of textile products caused by their high 
demand in domestic and foreign markets.  He noted a steady increase 
in the commodity turnover in the Ministry of Trade and Foreign 
Economic Relations of Turkmenistan. 
 
ENERGY FIELD AND TURKMENISTAN-CHINA GAS PIPELINE 
 
¶5.  (SBU)  Deputy Chairman of the Cabinet of Ministers, Tachberdi 
Tagyev reported on the progress of implementation of the oil and gas 
industry development program of Turkmenistan for the period until 
¶2030.  In order to strengthen the raw-material base of this sector 
and increase the volume of production and processing of oil and gas, 
exploration-geological survey work has increased recently.  In 
addition, industrial development and construction of new promising 
oil and gas fields are well under way.  Work on the modernization of 
production infrastructure of the fuel-energy complex as well as the 
creation of a diversified system of transport of Turkmen energy 
carriers to world markets is also under way. 
 
¶6. (SBU) Commenting on the report, Berdimuhamedov noted that the 
effective development of hydrocarbons and other natural resources of 
Turkmenistan is fundamental to the successful development of 
large-scale social and economic programs achieved in the country.  A 
broad international partnership, built on the principles of equality 
and mutual advantage, will contribute to achieving the targets that 
have been set.  In this context, drawing the attention of session 
 
ASHGABAT 00000461  002 OF 005 
 
 
participants to the highest priority tasks associated with the 
export of Turkmen energy resources to world markets, the President 
ordered that they implement all measures to complete the 
construction of Turkmenistan-China gas pipeline by the end of 2009. 
Touching on the prospects for the development of other sectors of 
the fuel-energy complex, Berdimuhamedov ordered Tagyev to ensure 
that the domestic fish industry become extremely profitable.   In 
this regard, the President appointed Mr. Tekayev, who  earlier 
worked as a General Director of the "Nebitgazkhyzmat" (Oil and Gas 
Service) Joint Stock Company of the Ministry of Oil and Gas Industry 
and Mineral Resources, as a new chairman of the State Fishery 
Committee. 
 
AGRICULTURAL SECTOR RESULTS 
 
¶7.  (SBU)  Deputy Chairman of the Cabinet of Ministers for 
Agriculture Myratgeldi Akmammedov reported on increased production 
of almost all types of agricultural products, which has led to 
increased earnings across the board in this sector.  It was noted 
that the measures undertaken for the purpose of the practical 
implementation of the new strategy of the development of the 
agricultural sector and solutions developed by the President and 
adopted by the Council of Elders in March in Turkmenabat became a 
powerful stimulus for villagers. 
 
¶8.  (SBU) As far as conducting seasonal agricultural campaigns is 
concerned, preparations are well under way for harvesting grain 
crops and sowing cotton seeds.   Currently, almost 30% of the 
farmlands allocated for this valuable industrial crop, has been sown 
with cotton seeds.  Summing up the report, Berdimuhamedov designated 
the most urgent tasks needed for further progress of agrarian reform 
and the development of the Turkmen village.  In particular, it was 
noted that it is necessary in the very near future to solve all 
issues connected with the opening of the specialized stores on the 
sales of agricultural machinery and spare parts for them to the 
population. 
 
¶9. (SBU)  In their reports, governors of provinces paid special 
attention to the state of affairs in the agrarian sector, and 
specifically, seasonal field work.  They presented detailed 
information on the implementation of state social and economic 
programs, including on the progress of the Avaza National Tourism 
Zone on the Caspian Sea coast.  They also reported on the readiness 
for commissioning of the first sanatoria and health resorts there as 
well as on the quick pace of construction of the Ashgabat-Dashoguz 
highway, which will be opened in the near future.  Governors of Mary 
and Lebap provinces thanked the Turkmen leader for the newly built 
sports complexes in Mary and Turkmenabat cities.  The complexes have 
stadia for 10,000 viewers each, swimming pools and other sports 
facilities, which were opened a day before. 
 
SHORTCOMINGS REVEALED 
 
¶10.  (SBU) Chairman of the Supreme Auditing Chamber (SAC), 
Gurbannazarov reported on the results of inspection of the condition 
of storage and refrigerator facilities intended for storing 
vegetables and fruits in the capital and other cities of the 
country, undertaken on the instruction of the President of 
Turkmenistan. Chairman of the Food Industry Association Bayar Abayev 
also reported on the state of affairs in his sector.  Noting that 
the improvement of the material and technical base of the sector is 
the key aspect for ensuring the food security program, 
Berdimuhamedov instructed Deputy Chairman Akmammedov and other 
relevant officials to adopt the measures necessary for the creation 
of contemporary storage facilities for agricultural and other food 
products to provide Turkmenistan with high-quality fresh products at 
affordable prices year round.  Berdimuhamedov ordered the transfer 
of part of these storage facilities to the private sector. 
 
¶11. (SBU) The President listened to the reports of the chairman of 
SAC about the audit results of the activity of the Turkmenmallary 
(Turkmen Livestock) Association, and also the report of the chairman 
of this association, Bayramgeldi Jumov.  Berdimuhamedov emphasized 
the need to steadily increase the potential for cattle-breeding both 
 
ASHGABAT 00000461  003 OF 005 
 
 
for domestic and consumption and export.  The President designated 
the priorities of this work, the importance of the creation of 
conditions for the satisfactory wintering of cattle, the expansion 
of pastures and their economic utilization, creation of specialized 
cattle-breeding farms and noted the attraction of private 
entrepreneurs to this work.  As Berdimuhamedov noted, "During last 
winter (2007-2008), we have lost a lot of livestock.  According to 
the report of the Office of the Prosecutor General, this was caused 
by the careless attitude of former officials of the association to 
their duties.  If the livestock shelters are not in good condition 
during the harsh winter, if there are not enough feed and if nobody 
cares about the protection of livestock from cold, then it is 
obvious that there will be such losses."  According to the SAC 
report, not a single new shelter for wintering of livestock has been 
built.  The President criticized the work of Turkmenmallary 
Association and severely reprimanded Chairman Jumov and Minister of 
Agriculture Esenmyrat Orazgeldiyev.  Berdimuhamedov instructed them 
to work out a plan on the elaboration of the program of development 
of the livestock sector together with the provincial governors' 
offices within 10 days.  The President also instructed them to raise 
livestock in especially designated farms rather than breeding them 
in the desert. 
 
TRANSPORT AND COMMUNICATION FIELD 
 
¶12.  (SBU) Deputy Chairman of the Cabinet of Ministers for Transport 
and Communication, Shagulyev reported on the significant increase in 
the volume of cargo and passenger transportation by all forms of 
transport, including railroad, aviation and automobile transport, in 
comparison with the same period in 2008.  According to him, 
essential growth was achieved in the sphere of communication, where 
services are being expanded thanks to the opening of new telephone 
exchanges, modernization of existing telephone stations, and also 
expansion of the number of Internet users.  Noting the importance of 
the creation of reliable transportation infrastructure as 
fundamental for implementing social and economic development 
programs, Berdimuhamedov accentuated attention on the need of 
accelerating the construction of the bridge over the Amu Darya river 
which would play an important role in the successful development of 
the rich resources and industrial potential of Lebap province. 
 
CONSTRUCTION DEVELOPMENT 
 
¶13. (SBU) Deputy Chairman of the Cabinet of Ministers for 
Construction and Power Energy Deryageldi Orazov reported on the 
steady tendency of increased production of electric power and 
construction materials.  He also noted that the of city-planning 
program is going well, especially, residential construction 
activity.  His report was supplemented with the report of the 
chairman of SAC, who presented the results of the audit on price 
formation for the construction of social facilities carried out on 
the order of the President of Turkmenistan.  Taking into 
consideration the report  and emphasizing the priority importance of 
the social component in state urban-planning policy, Berdimuhamedov 
emphasized the issues connected with implementation of the 
sequential stage of the housing program both in Ashgabat, and in the 
country.  Declaring that the eleventh stage of this program will 
start in Ashgabat in the coming months, the President instructed the 
relevant officials to prepare proposals on conducting the 
corresponding international tender.  He also emphasized the need to 
involve local construction companies in this work. 
 
SESSION RESULTS AND FUTURE GOALS 
 
¶14. (SBU) Summing up the session, Berdimuhamedov emphasized that the 
beginning of 2009 was marked by a whole series of the events, which 
have important significance for strengthening the international 
authority of Turkmenistan and the successful fulfillment of reforms 
and bring about high living standards for people of Turkmenistan. 
Among these, he named visits to Uzbekistan, Iran and the Russian 
Federation, during which a whole series of the new agreements and 
other documents aimed at activating mutually beneficial 
intergovernmental collaboration have been signed.  According to 
President Berdimuhamedov, "Despite the ongoing global economic 
 
ASHGABAT 00000461  004 OF 005 
 
 
crisis in the world, the rates of development of our economy remain 
high.  Implementation of large-scale international projects 
continues, numerous social and economic objects are being built. 
Among them are the creation of the Avaza National Tourism Zone, 
construction of the North-South transcontinental railroad, 
Turkmenistan-China gas pipeline, new settlements - district centres, 
institutes, schools, apartment buildings, kindergartens, development 
of the oil and gas deposits and others."  He continued that 
construction of 1,437 buildings at a total cost of 15 billion US 
dollars is conducted in the country.  In January-February 2009, the 
volume of investments increased by 2.1 times and the growth of 
foreign trade turnover reached 176%.  Exchange rate of the manat 
remains steady.  The level of inflation also does not exceed the 
assigned parameters.  High rates of growth are ensured in the 
industry, construction and other sectors of economy.  Reforms 
conducted in the agricultural sector also started producing results. 
 Positive results of reforms, aimed at the modernization of 
industrial and other sectors of the economy are also clearly 
visible.  Stable macroeconomic indices, high degree of financial, 
social and political stability - all this caused the investment 
attractiveness of Turkmenistan.  In his speech, Berdimuhamedov also 
emphasized the special importance of the sphere of culture and media 
in the spiritual, moral and aesthetic training of nation. 
 
¶15.  (SBU) Formulating goals for this year, Berdimuhamedov 
emphasized that the most critical of them are further strengthening 
of the democratic and legal bases of state,  increase the economic 
power of the country, spiritual improvement of society, development 
of education, science and culture, enhancing international 
cooperation, and a steady improvement of the living standards of 
population by developing entrepreneurship.  President Berdimuhamedov 
outlined that in order to achieve these tasks it is necessary to 
accelerate the rates of the social and economic development of 
provinces, the implementation of the national program on reforming 
social and living conditions of the population of villages, 
settlements, cities of districts and district centres for the period 
until 2020.  This acceleration will also help ensure further 
increase of the GDP (Gross Domestic Product) by at least 10.7% in 
2009 compared with 2008 and further increase of the wages in all 
sectors of the economy.  Balanced financial-credit and monetary 
policy will enable the country to preserve the stability of prices, 
and not to increase inflation.  Berdimuhamedov also said that the 
inflate rate should be maintained not higher than 7-8%. 
 
EAST-WEST GAS PIPELINE AND INTERNATIONAL ENERGY CONFERENCE 
 
¶16. (SBU) Noting the importance of the independent international 
audit of hydrocarbon deposits, which confirmed the presence of the 
enormous reserves of gas in the depths of the country, 
Berdimuhamedov emphasized that the results not only make 
Turkmenistan one of the largest energy powers but also increases the 
strategic value for expanding the framework of international 
collaboration in the sphere of ensuring energy security.  This fact 
is clearly confirmed by the Turkmenistan-initiated UN Resolution 
"Stable and reliable transit of energy resources and its role in 
ensuring sustainable development and international cooperation," 
included in the agenda of the UN General Assembly.  Part of the 
practical implementation of this important document became 
international tender on the construction of the East-West gas 
pipeline.  In this context, Berdimuhamedov instructed the Foreign 
Ministry and the oil and gas complex of the country to take all 
measures to conduct the declared tender, and also the international 
conference dedicated to the issues of ensuring security of pipelines 
and other energy-transport communications to take place in Ashgabat 
at the end of April in a well-organized manner. 
 
¶17. (SBU) The Cabinet session concluded with a solemn ceremony where 
Berdimuhamedov was awarded the Order of Honor of the Olympic Council 
of Asia.  Director of the National Security Agency of Kuwait, the 
President of Olympic Council of Asia, Sheik Akhmad Al Fakhad al 
Sabakh, who came to Ashgabat for this occasion, presented the award 
to the Turkmen leader. 
 
CONTRACTS AUTHORIZED BY PRESIDENT 
 
ASHGABAT 00000461  005 OF 005 
 
 
 
¶18.  (SBU) As a result of the session, President of Turkmenistan 
issued a decree in line with which, "Turkmennebitgazgurlushyk" 
(Turkmen Oil and Gas Construction) State Concern has been authorized 
to conclude a contract with the Turkish firm "Polimeks Insaat ve 
Taahut ve Sanayi Ticaret A.S." for covering the fountains on Andalyp 
Street in Ashgabat with granite, setting up electro-mechanical 
equipment and improvement of adjoining areas for a total amount of 
EUR 33,442,500 (including VAT) for construction between April 2009 
and November 2009.  President Berdimuhamedov signed another decree 
authorizing "Turkmennebitgazgurlushyk" State Concern to conclude a 
contract with the Turkish firm "Polimeks Insaat ve Taahut ve Sanayi 
Ticaret A.S." for design and construction of the winter sports 
complex at the intersection of Ataturk and Oguz Khan streets for 
10,000 viewers and also sports school of Olympic Reserve for a total 
amount of EUR 134.39 million (including VAT) between April 2009 and 
November 2011. 
 
¶19.  (SBU) President Berdimuhamedov also signed a decree authorizing 
the purchase of 1,040 KAMAZ brand trucks and special machinery for a 
total amount of 292,666,000 manats (equivalent of USD 102.68 
million).  The Ministry of Trade and Foreign Relations of 
Turkmenistan and Ministry of Automobile Transport of Turkmenistan 
have been instructed to accept the KAMAZ brand trucks from "KAMAZ 
FTC Corp" Company by distributing them among the provincial 
governors' offices and the office of the mayor of Ashgabat. 
 
¶20. (SBU) COMMENT:  This latest expanded session of the Cabinet of 
Ministers looked at the results of the country's social and economic 
development in the first quarter of 2009.  Although making efforts 
for social and economic development of the country to improve the 
population's living standards is a commendable activity, it is 
difficult to understand how authorization of 33 million dollars for 
covering fountains in Ashgabat with granite can contribute to the 
social and economic development of the country.  END COMMENT. 
 
MILES