'Bridges to Nowhere' America's Unsavory Friends in Central Asia

In Central Asia, contrasts are often stark.
REUTERS

In Central Asia, contrasts are often stark.

By and

Part 2: A Yacht Named 'Awakening'


In December 2006, the medication-addicted despot, whose secret police even raided children's Halloween parties and threatened to throw the organizers in prison, died. Before he had even been buried, the US Embassy in Ashgabad penned a report recommending that a new ambassador could help quickly forge a "fresh start" with the Turkmen.

Niyazov was succeeded as president by his former dentist, Gurbanguly Berdymukhamedov. The new president renewed a "generous overflight agreement" with the Americans for their military operations in neighboring Afghanistan, as the US embassy duly noted in a dossier.

Washington is particularly keen to gain access to Turkmenistan's immense gas reserves. But diplomats complained that the Turkmen were preventing US companies from exploiting the gas. "US integrated energy companies such as ExxonMobil, Chevron, ConocoPhillips and Marathon continue to express interest in working with the Turkmen to develop energy projects," one dispatch reads. "But the Turkmen have shown little reciprocal interest."

The Russians, it would seem, have simply been cleverer when it comes to establishing business relations. The Russian natural gas company ITERA -- which is involved in three offshore oil and gas fields in the Caspian Sea, is interested in exploiting fossil fuel fields in the Karakorum, and is otherwise heavily involved in Turkmenistan -- appears to have discovered one of Berdymukhamedov's weaknesses. The company presented the president with a yacht, as the US ambassador cabled to Washington on Oct. 23, 2008.

Sailor's Cap and Binoculars

The Italian-built boat is called Galkinysh (awakening) and sails the Caspian; the president even held a cabinet meeting on board on Sept. 30, 2008. Berdymukhamedov appeared wearing a blue-and-white-striped shirt, a blue sailor's cap and binoculars hanging around his neck.

A Swedish shipping company was asked to send seven of its best to crew the ship -- there aren't enough professional sailors in Turkmenistan. The Russians, though, proved unable to completely grant all of the president's wishes. An informant told the US ambassador that the president had actually wanted a yacht that was just as large as that owned by Russian oligarch Roman Abramovich. The request, however, ultimately could not be fulfilled -- such a yacht would have been much too big for the Caspian.

Originals: The Key Central Asian Cables
Click on the headlines below to read the full texts...
Oct. 23, 2008 -- Ashgabad: "expat sources say that itera gave..."
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<<174923>> 10/23/2008 13:28 08ASHGABAT1399 Embassy Ashgabat CONFIDENTIAL 07ASHGABAT968 VZCZCXRO2404 PP RUEHAG RUEHBI RUEHCI RUEHLH RUEHPW RUEHROV DE RUEHAH #1399/01 2971328 ZNY CCCCC ZZH P 231328Z OCT 08 FM AMEMBASSY ASHGABAT TO RUEHC/SECSTATE WASHDC PRIORITY 1758 INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE RUCNCIS/CIS COLLECTIVE RUCNMEM/EU MEMBER STATES COLLECTIVE RUEHAK/AMEMBASSY ANKARA 4434 RUEHBJ/AMEMBASSY BEIJING 2246 RUEHKO/AMEMBASSY TOKYO 2111 RUEHIT/AMCONSUL ISTANBUL 2682 RUEATRS/DEPT OF TREASURY WASHDC RHEHNSC/NSC WASHDC RUCPDOC/DEPT OF COMMERCE WASHDC RHMFISS/CDR USCENTCOM MACDILL AFB FL RUEAIIA/CIA WASHDC RHEFDIA/DIA WASHDC RUEKJCS/JOINT STAFF WASHDC RUEKJCS/SECDEF WASHINGTON DC RUEHVEN/USMISSION USOSCE 3003 TAGS: PREL, PINR, EPET, EINV, ETRD, EWWT, SCUL, RS, TX SUBJECT: EXPAT SOURCES SAY THAT ITERA GAVE TURKMENISTAN A REF: 07 ASHGABAT 968

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E.o. 12958: decl: 10/22/2018 Tags: prel, pinr, epet, einv, etrd, ewwt, scul, rs, tx Subject: expat sources say that itera gave turkmenistan a yacht worth 60 million euro

Ref: 07 ashgabat 968

Classified By: Charge d'Affaires a.i. Sylvia Reed Curran for reasons 1. 4 (B) and (D).

1. (C) SUMMARY: According to expatriate sources in Ashgabat, a yacht that recently set sail on the Caspian Sea -- reportedly worth 60 million euros -- is actually a gift from Russian company Itera. Itera is working on signing a deal jointly with Russian state-owned companies Rosneft and Zarubezhneft and Turkmenistan's Turkmenneft to develop blocks 29, 30, and 31 in the offshore Caspian area at some point in 2008. According to news reports, Itera is also an enthusiastic partner in the development of the Avaza free tourist zone located on the Caspian Sea, is funding the Ashgabat branch of the Gubkin Oil and Gas University, and is involved in importing farm equipment from Tatarstan, in competition with John Deere and Case New Holland equipment. In addition, the government forced a Swedish-owned shipping company to give up seven of its most valuable employees to become permanent crew on the yacht. Itera's business activities are wide-ranging and difficult to isolate, and the reported gift of the yacht serves as a sign that the company's willingness to go to great lengths to win business should not be underestimated. END SUMMARY.

At face value, turkmenistan has a new yacht

2. (U) The top story in the October 1 edition of official Russian-language newspaper "Neytralniy Turkmenistan" announced the acquisition of an Italian-built yacht called "Galkynysh" ("Revival") that will sail on the Caspian Sea. President Berdimuhamedov held a meeting of the Cabinet of Ministers on September 30 on board the ship. The article implied that the ship would be the first in a fleet of boats to float in the Caspian in support of the Avaza Free Tourism Zone (reftel). President Berdimuhamedov appeared in one photograph sporting a navy blue sailing cap, a French-style white and blue striped shirt, and binoculars hanging around his neck.

However, one expat lost employees to this yacht...

3. xxxxxxxxxxxx

4. (C) xxxxxxxxxxxx said that personnel on board the presidential yacht must be ethnic Turkmen, and the professionals must have internationally recognized certificates. xxxxxxxxxxxx added that there are few such professional sailors in Turkmenistan,xxxxxxxxxxxx.

5. (C) xxxxxxxxxxxx said the Turkish company TACO built the ship bay for the presidential yacht, located by the presidential palace in Turkmenbashy. Security forces closed off the entire port for two days for the construction of this ship bay complex, which includes two helipads.

...and, according to another: yacht was a gift from the company itera

6. (C) xxxxxxxxxxxx said in a meeting on October 16 that this yacht worth 60 million euros was a gift of Russian firm Itera. xxxxxxxxxxxx added that the president had originally wanted a larger yacht similar to one owned by Russian oligarch Roman Abramovich, but that yacht would not fit through the canals leading to the Caspian Sea and thus Berdimuhamedov had to settle for this one.xxxxxxxxxxxx added that Berdimuhamedov's pool of automobiles consists of a Bentley, a Mercedes Maybach (gift of a German company), a Range Rover, and a Cadillac Escalade. According to this source, Itera will build a urea/ammonia plant in Belek, Bekdash, or Turkmenbashy.

Itera's activities in turkmenistan in 2008

7. (U) According to various open source reports, Itera officials have frequently met with President Berdimuhamedov since the end of 2007:

-- On December 27, Itera Holdings Chairman of the Board Igor Makarov and Berdimuhamedov discussed projects such as development of oil and gas fields on the Caspian shelf and in the Karakum, construction of facilities for gas transportation, a carbamide plant, and creation of iodine-bromine production. The same report also said that Itera would fund the Ashgabat branch of the Russian Gubkin State Oil and Gas University in Ashgabat, implement projects in Avaza, construct an office building in Ashgabat, and participate in construction of highways and rail lines.

-- At a meeting on February 18, the president said that Itera has proven itself as one of Turkmenistan's "old and reliable partners." Makarov submitted a project for a five-star, 110-room hotel in Avaza. (NOTE: Turkmenistan celebrated "Flag Day" on the February 19 and held meetings with various companies the preceding day. END NOTE.)

-- A delegation of Itera's top management held talks with Turkmen officials on March 9 to discuss a production sharing agreement for three blocks of the Caspian Sea shelf and to receive a license to survey and develop a new block. The article added, "If Itera gets the license, it is likely to engage Zarubezhneft and Rosneft as partners."

Ashgabat 00001399 003 of 003

-- In April, Itera CEO Vladimir Makeyev announced that the company, within the framework of the Zarit joint venture, expected to sign a production sharing agreement to develop blocks 29, 30, and 31 in the offshore Caspian area at some point in 2008. Zarit was set up in 2002 and is comprised of Itera, the Russian state-owned companies Rosneft and Zarubezhneft, and Turkmenistan's Turkmenneft. Makeyev acknowledged in the April report that issues with Iran -- one of the blocks is located in a disputed area of the Caspian Sea -- remain unresolved. Makeyev said that Itera was discussing working on gas extraction in inland areas as well.

-- On June 11 in Ashgabat, Makarov gave the president a report on construction of a hotel in Avaza, a stadium in Turkmenabat, and progress on the carbamide plant construction project. In addition, Makarov updated Berdimuhamedov on preparation for joint activities in the Karakum Desert including development of deposits and construction of relevant infrastructure, in particular laying gas pipelines.

-- The official Turkmen television news program Watan showed Makarov visiting President Berdimuhamedov at the guesthouse in Kazan where Berdimuhamedov stayed during his official visit to Tatarstan on June 28, 2008.

-- On August 16, MRK Energy DMSS, an Emirati-based subsidiary of Itera, announced the sale of 400 Russian-made UAZ39629-016 ambulances worth $8 million to Turkmenistan.

-- On the day of the ship's introduction -- September 29 --Berdimuhamedov discussed the construction of a carbamide plant and a spa, as well as opportunities for Itera's participation in exploration in offshore deposits with Makarov at the Serdar Hotel in Turkmenbashy.

"Nothing is free in this country"

8. (C) COMMENT: Itera has a deal to build a urea/ammonia plant, and also an $8 million deal for ambulances, but there are most likely other deals of which post is not aware. The company undoubtedly really wants a gas exploration contract, especially onshore, and the gift of the yacht is a nice enticement to move the process along. xxxxxxxxxxxx said, "The gift of a yacht might be for an onshore gas deal, a chicken farm, or works already in progress. Nothing is free in this country." IPC Group, official distributors of John Deere and Case New Holland equipment in Turkmenistan, have had concerns about Itera and the company's ability to take over the farm equipment market in Turkmenistan at least since Berdimuhamedov's visit to Tatarstan. Itera's business activities are wide-ranging and difficult to isolate, and the reported gift of the yacht serves as a sign that the company's willingness to go to great lengths to win business should not be underestimated. End comment. Curran
Dec. 18, 2009 -- Ashgabad: "berdimuhamedov and turkmenistan's ruling..."
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<<240618>> 12/18/2009 13:57 09ASHGABAT1633 Embassy Ashgabat CONFIDENTIAL 09ASHGABAT1503 VZCZCXRO0347 PP RUEHAG RUEHBI RUEHCI RUEHDBU RUEHLH RUEHNEH RUEHPW RUEHROV RUEHSL RUEHSR DE RUEHAH #1633/01 3521357 ZNY CCCCC ZZH P 181357Z DEC 09 FM AMEMBASSY ASHGABAT TO RUEHC/SECSTATE WASHDC PRIORITY 3934 INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE RUCNCIS/CIS COLLECTIVE RUCNMEM/EU MEMBER STATES COLLECTIVE RUEHAK/AMEMBASSY ANKARA 6025 RUEHBJ/AMEMBASSY BEIJING 3719 RUEHKO/AMEMBASSY TOKYO 3578 RUEHIT/AMCONSUL ISTANBUL 4267 RHEHNSC/NSC WASHDC RHMCSUU/CDR USCENTCOM MACDILL AFB FL RUEAIIA/CIA WASHDC RHEFDIA/DIA WASHDC RUEKJCS/JOINT STAFF WASHDC RUEKJCS/SECDEF WASHINGTON DC RUEHVEN/USMISSION USOSCE 4206 RUCNDT/USMISSION USUN NEW YORK 1332 RUCPDOC/DEPT OF COMMERCE WASHDC RHEBAAA/DEPT OF ENERGY WASHDC RUEATRS/DEPT OF TREASURY WASHDC TAGS: PGOV, PINR, TX SUBJECT: BERDIMUHAMEDOV AND TURKMENISTAN'S RULING FAMILY REF: ASHGABAT 1503

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E.o. 12958: decl: 12/17/2019 Tags: pgov, pinr, tx Subject: berdimuhamedov and turkmenistan's ruling family

Ref: ashgabat 1503

Classified By: Charge d'Affaires Sylvia Reed Curran. Reasons 1.4 (B) a nd (D).

1. (C) SUMMARY: Turkmen President Berdimuhammedov is vain, fastidious, vindictive, a micro-manager, and a bit of an Ahal Teke "nationalist." He also is the only son in a family of eight children. His father is a retired prison guard with the rank of colonel. The father, many in Turkmenistan think, is more intelligent than the son. Berdimuhamedov reportedly has a Turkmen wife and a Russian mistress. He has two daughters and a son with his Turkmen spouse and a daughter with his Russian wife. One of his sons-in-law runs the London office of the Turkmen State Agency for Management and Use of Hydrocarbon Resources. His other daughter lives with her husband, a diplomat, in Paris. Berdimuhamedov's second oldest sister, Aynabat, was at the center of a bribery case at the Turkmenistan World Languages Institute. Her son was also involved in corrupt activity when he helped the Turkish company ERKU receive prestigious construction projects in 2007-2008. The president's nephews frequently figure in lucrative deals and businesses. END SUMMARY.

2. (C) President Gurbanguly Berdimuhamedov is the "decider" for the state of Turkmenistan. Since his word is often law, it is beneficial to understand what makes him tick and to know something about those closest to him, his family. According xxxxxxxxxxxx Berdimuhamedov is vain, suspicious, guarded, strict, very conservative, a practiced liar, "a good actor," and vindictive (reftel). In fact, this source noted that xxxxxxxxxxxx had called Berdimuhamedov a name xxxxxxxxxxxx. Our source said that while he usually forgets something after a few months or a year, Berdimuhamedov never forgets. Our source described Berdimuhamedov as a micromanager. He said that the president signs off on work schedules for experienced doctors.

3. (C) Our source said Berdimuhamedov is very clean and neat and requires all around him to be the same. xxxxxxxxxxxx Berdimuhamedov would remark they were not clean enough. xxxxxxxxxxxx. About 30 years ago, when Berdimuhamedov owned an old Russian car, he would leave it at home if it rained and take a taxi instead.

4. (C) Berdimuhamedov apparently does not think all Turkmen are the same. He once told our source that the true and first Turkmen come from the area between Kaka and Baharly in Ahal Province. Other people are not real Turkmen.

5. (C) Berdimuhamedov does not like people who are smarter than he is. Since he's not a very bright guy, our source offered, he is suspicious of a lot of people. Our source claimed Berdimuhamedov did not like America, Iran, or turkey, but likes China. (COMMENT: Berdimuhamedov probably views other countries in terms of what they can do for him and his country, rather than in terms of like or dislike. END COMMENT.) He also asserted that the president is not fond of either Uzbek President Karimov or Kazakhstan President Nazarbayev.

Born of goodly parents

6. (SBU) Gurbanguly Berdimuhammedov's father, Myalikguly Berdimuhamedov, worked as a senior Interior Ministry officer in a prison guard detachment. He retired as a Colonel of

Ashgabat 00001633 002 of 002

Internal Troops. In local public opinion, the father is rumored to be far more intelligent than his son. The president's mother was a housewife. The president's parents now live with their son in the official residence in Firuza Valley, which is 19 km from Ashgabat. His grandfather Berdimuhamed Annayev was the principal of a school in his native village of Izgant.

Wife, mistress and children

7. (C) Berdimuhammedov is married and has two daughters and one son, Serdar. The oldest daughter is married to Yhlasgeldi Amanov, who is a representative of the Turkmen Agency for Use and Management of Hydrocarbon Resources for Europe, posted in London. His other daughter lives with her husband, who works at the Turkmenistan Embassy in Paris. A local Turkmen entrepreneur claims this daughter has a villa on the Cote d'Azure in southern France. There is a rumor among Ashgabat residents that Berdimuhamedov has a mistress, in addition to his Turkmen wife, who is reportedly very conservative. The mistress is supposedly an ethnic Russian by the name of Marina. She was reportedly a nurse at a dental clinic where Berdimuhamedov worked earlier in his career, and has a 14-year old daughter with the president. Berdimuhamedov's wife has reportedly been living in London since 2007.

Sisters-housewives, sisters-teachers and sisters-businesswomen

8. (SBU) Berdimuhamedov is the only son in his family of eight children. One of the younger sisters teaches at the Turkmen National Economy University; another, the youngest one, is a housewife married to a Central Bank employee. His second oldest sister, Aynabat Berdimuhamedova, actively exploits the influence of her brother. According to xxxxxxxxxxxx World Languages Institute of Turkmenistan will no longer be pressured by the president's family during admission exams. In the summer of 2008, Aynabat Berdimuhamedova used her family connections to influence the admissions process at the language institute, allegedly taking bribes in exchange for successful admission. In order to avoid a scandal due to public exposure, Berdimuhamedov sent Aynabat to London in the summer of 2009 until examinations were complete.

Business-nephews

9. (SBU) According to xxxxxxxxxxxx, one of the president's nephews in 2009 offered one million USD as an investment into the Bailiyev's successful construction business. Turkish construction company ERKU reportedly received many prestigious projects in Ashgabat through one the president's nephews, perhaps the son of the Aynabat.

10. (SBU) COMMENT: Berdimuhamedov has gone to great lengths to conceal information about his family and personal life from the public. For a public figure who tries to project an image as a renaissance man, whether it be author, surgeon, pilot, sportsman or statesman, the failure to cultivate a "family man" image leaves a void that the public is ready to fill. END COMMENT. Curran
Oct. 5, 2005 -- Almaty: "kazakhstan: a/s fried's meeting with president..."
Important note on the dispatches...

<<42026>> 10/5/2005 8:34 05ALMATY3603 US Office Almaty CONFIDENTIAL

This record is a partial extract of the original cable. The full text of the original cable is not available.

TAGS: KZ, PGOV, PHUM, PREL, POLITICAL SUBJECT: KAZAKHSTAN: A/S FRIED'S MEETING WITH PRESIDENT

C o n f i d e n t i a l almaty 003603

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E.o. 12958: decl: 10/03/2015 Tags: kz, pgov, phum, prel, political Subject: kazakhstan: a/s fried's meeting with president nazarbayev

Classified By: Ambassador John Ordway, reasons 1.4 (B) and (D).

1. (C) Assistant Secretary Dan Fried met with Kazakhstani President Nazarbayev in Astana on September 30 for over an hour. On the Kazakhstani side the participants included Presidential Administration Head Dzhaksybekov, Foreign Minister Tokayev, and Assistant to the President Masimov. Ambassador Ordway, DOD DAS Jim MacDougall, NSC Director David Merkel, and SA DAS John Gastright accompanied Fried. The atmosphere was cordial, and Nazarbayev was relaxed and engaged throughout the meeting. He made a point of referring to each member of the delegation and where he had met him before. In the case of Merkel, this led to a retelling of a telephone conversation that Merkel had facilitated with President Bush during the 2000 election on the situation in Chechnya. Nazarbayev referred to prepared papers only at the end to bring up some issues that had not come up in the course of the largely free-form conversation. This message reports the conversation thematically.

Democratization ---------------

2. (C) Assistant Secretary Fried noted the strong progress Kazakhstan had made under President Nazarbayev's leadership in establishing its sovereignty, and in building a free market system. Economic reforms have provided Kazakhstan with a strong basis to take advantage of its hydrocarbon resources. The U.S. had been a partner of Kazakhstan, most recently in fighting terrorism, and looked forward to continuing this partnership. Now, the U.S. and the entire world were watching to see how Kazakhstan handled the upcoming Presidential elections. They represented the next step forward for the democratic evolution of Kazakhstan. The decision about the NGO law had been a good one. The President's speeches to the nation (in February) and to Parliament (in September) had laid out clearly where he stood on the issues, and the U.S. appreciated them very much. Good elections would mark another step forward in our relationship, which must be based on the broad range of our shared interests: security, the economy, and democratization. Kazakhstan is poised very well compared to the other countries in the region: large, wealthy, and on the verge of elections that can provide the winner a strong, democratic mandate. The U.S. cannot build a relationship with any Central Asian country on the basis of security alone. As Secretary Rice has said, our interest in security and in democracy is indivisible.

3. (C) Fried said that he wanted to express the hopes of his government for a deepening of our relationship, especially after the elections, if they are democratic. We take seriously Nazarbayev's commitments that they be free and fair.

4. (C) Nazarbayev said that those post-Soviet leaders who had put political development first had made a serious error, as shown by the failures of Gorbachev, as well as the leadership in Ukraine and Kyrgyzstan. Trying to implement democratic reform in poor countries will end up badly. Kazakhstan, he said, had chosen a different path: first the economy, then politics. The development of small and medium enterprises, and a middle class, sets the stage for electing representative who will have a stake in the system. Nazarbayev said that that USG would not tolerate a group of people trying to take over the White House, and added that the U.S. was trying to lecture to others without knowing the true situation in the countries concerned. As a friend of the U.S., Nazarbayev said, this approach would only stimulate those like Lukashenko who criticize the U.S.

5. (C) Kazakhstan, Nazarbayev said, had reached a point where its economic development now required liberal reforms of society. His goal, he said, was a sustainable democratic Kazakhstan that cannot be turned back. After the election, he would sit down personally with all political forces and seek a consensus on further democratic reforms. If necessary, the constitution could be changed to accommodate the reforms. (Note: This is a nod toward two of the major criticisms by the opposition over the past year, who refused to participate in the existing commission on democratization because it was not chaired by Nazarbayev, and who have been insisting on constitutional reform to reduce executive powers.)

6. (C) Fried told Nazarbayev that what had happened in Georgia, Ukraine and Kyrgyzstan was the result of political and economic failures. The U.S., he said, supports democratic and economic reform; revolution was the result of

failure and never the preferable route. The U.S. is not interested in revolution; we are interested in reforms like those Nazarbayev had just described.

Elections ---------

7. (C) On the upcoming election, Nazarbayev was supremely confident. He cited Western polls that showed him with 70% support. (Note: A 2004 IRI poll did show impressively high approval ratings for Nazarbayev, but did not pose a direct election question. Senior Presidential Administration officials have told us that their polls indicate electoral support for Nazarbayev has grown from 42% in February, to 70% in September. Both have a margin of error of 3%. End Note.) In campaign mode, Nazarbayev boasted that he would not even leave his office in the pre-election period. (Comment: not likely.) He continued, enthusiastically, to denigrate united opposition candidate Zharmakhan Tuyakbay, calling him a Soviet procurator responsible for sending patriotic students to jail in 1986 -- and adding that they had the documents to prove his involvement

8. (C) Note: Tuyakbay was chairman of the lower house of parliament, and the first candidate on the Otan party list in the September 2004 parliamentary elections, until he broke with Nazarbayev later that year, charging massive falsification of the results. The reference to 1986 refers to massive anti-Soviet demonstrations in Almaty in December 1986 after Gorbachev sacked long-time party boss Kunayev, an ethnic Kazakh, and replaced him with Gennadiy Kolbin, an ethnic Russian with no previous association with Kazakhstan. Tuyakbay's role in prosecuting the students will not play well with the Kazakh electorate where his primary appeal lies. End Note

9. (C) Nazarbayev acknowledged, indirectly, that corruption will be a major element in the campaign. He said, however, that charges against his administration would backfire as the opposition had truly corrupt persons in their ranks. Turning strategic, Nazarbayev promised that the elections would be free, fair and transparent. He said that given the strength of his support he did not need any "supplemental measures." He added that he welcomed as many international observers as possible, especially from the OSCE.

10. (C) Fried said that he appreciated Nazarbayev's evaluation of elections. It was particularly astute to welcome the presence of OSCE observers, since this could protect the government from unfounded charges of election manipulation. Fried added that he knew that on December 5, the day after the elections, the first thing Secretary Rice would ask would be "what does the OSCE think" -- not what the opposition had charged. Fried said that he hoped he would be able to say that they were pretty good elections. If so, this would be the best news of the year.

Security --------

11. (C) Assistant Secretary Fried praised Kazakhstan's support for the war on terrorism, and for its contingent in Iraq. Nazarbayev said that Kazakhstan was not yet prepared to join NATO or to have a U.S. base, but did want a closer security and defense relationship. He asked for U.S. assistance with Caspian security. This would not mean deployed forces or bases, but would include technical assistance and training, and help with control of the air and sea. He suggested that we might want to consider concluding a detailed, comprehensive, confidential action plan in this area.

Regional Issues ---------------

12. (C) Assistant Secretary Fried provided an overview of his discussions in Tashkent and Bishkek. Nazarbayev underscored the risk to Kazakhstan of a breakdown in Uzbekistan. He said that he had been working for some time to encourage Karimov to undertake reform, particularly economic reform. Now, however, he has given up any hope that Karimov will be able to move his country forward and avoid a societal breakdown. Nazarbayev predicted that there would be turmoil in the Fergana Valley that would then spread to other cities in Uzbekistan. Kazakhstan was preparing to receive refugees, and he noted that there are 1.5 million ethnic Kazakhs in Uzbekistan who are discriminated against and deprived of their rights.

13. (C) Nazarbayev said that his offer of a Central Asian economic community remained on the table, offering open borders, unified tariffs, and free movement of people and capital. Karimov, however, is afraid to open the border. Nonetheless there are already 500,000 Uzbeks working illegally in Kazakhstan, along with 200,000 Kyrgyz. Kazakhstan is prepared to establish consortia on energy and transportation, and to develop hydroelectric projects in Kyrgyzstan and Tajikistan. The region is interlinked, he said. Kazakhstan can provide food and meat, and will buy power and cotton. He said he did not know why there was not agreement on this. However, a meeting in Dushanbe had approved the consortia and there would be a supra-national body to control them. (Note: This initiative appears to be limited to Kazakhstan, Kyrgyzstan and Tajikistan.)

14. (C) Nazarbayev commented briefly on Turkmenistan, saying that Niyazov "is getting crazy." Nazarbayev said Niyazov had renamed the first month of the year "Turkmenbashi." Since then, Nazarbayev said he had been calling him "Mr. January," which infuriates Niyazov.

15. (C) Fried asked for Kazakhstan's support for Kyrgyzstan, saying that the new leadership there were facing very difficult problems. They were focusing on the right issues, but solving them would be tough. Nazarbayev said Kyrgyzstan was a bankrupt country, whose external debt equalled its GDP. Kazakhs consider themselves "brothers" with the Kyrgyz, and had already outlined a course to help them through their current difficulties. Nazarbayev said he would meet with Bakiyev on October 6, and was ready to go to Bishkek. Kazakhstan was providing help to get Kyrgyzstan through the winter, possibly coal and oil, and had already sent grain. Nazarbayev said that he would take Kazakhstani bankers there to see opportunities, and added that Kazakhstan needed to export capital. He had provided political support by attending Bakiyev's inauguration.

16. (C) Nazarbayev expressed support for U.S. efforts in Afghanistan. He noted that Kazakhstani companies might be able to assist with reconstruction efforts. The GOK has raised this issue with the GOA. Nazarbayev noted that an Uzbek decree which prevents land access to Afghanistan for Kazakhstanis (NFI) could hamper efforts to assist with reconstruction.

Partnership with the U.S. -------------------------

17. (C) Nazarbayev outlined his vision of strategic partnership and true friendship with the U.S. He referred pointedly to an old Kazakh saying said that the country is geographically located between the Russian bear and the Chinese dragon, and (mixing metaphors a bit) remarked that it's dangerous for a fly to be between two camels. However, while Kazakhstan had some vulnerability, it must have, and does have, excellent relations with both of these powerful neighbors. At the same time, Kazakhstan wanted to develop its partnership with the U.S., but the U.S. must understand that Kazakhstan cannot "split" with either of its neighbors. On the bilateral relationship, much has already been done. The U.S. is the largest foreign investor in Kazakhstan (providing 35% of all FDI). Kazakhstan aspired to be among the top five oil exporters within ten years. The fact that U.S. oil companies are in a very prominent position in Kazakhstan was the result of a deliberate choice.

18. (C) Nazarbayev continued, noting that Kazakhstan is the "only Muslim country" with the U.S. in Iraq. (Comment: This isn't true; we've tried to gently correct the record a couple of times but Nazarbayev keeps repeating this. End Comment.) He described the Kazakhstani contingent as a symbolic contribution, but important for the U.S. When America's closest friends leave, he said, Kazakhstan will be there with the U.S. Nazarbayev said he told Bill Clinton that Kazakhstan would donate $250,000 for Hurricane Katrina relief -- again an important symbolic gesture of support. Kazakhstan had supported the U.S. on terrorism from the first day. Working together with the U.S., Kazakhstan had solved its problems with denuclearization and non-proliferation.

19. (C) Kazakhstan was not asking for grants or loans; having paid off its IMF debt it needed no credits. However, Kazakhstan was interested in true cooperation on a range of issues -- attracting U.S. investment in the SME sector, and obtaining U.S. economic and political support for strengthening the independence of Kazakhstan in a way not

directed against China and Russia. "We can do it in a smart way," Nazarbayev said, by making the presence of the U.S. "very powerful." Nazarbayev said that the U.S. and Kazakhstan should sign an agreement on strategic partnership (as the U.S. had done with China, Russia and Uzbekistan). "That would be political support. We would not ask for anything, just sign the agreement that would provide for mutual obligations which could be fulfilled.

20. (C) Fried said that Nazarbayev had outlined ideas on the bilateral relationship in which the U.S. was very interested, i.e. deepening political and economic relations and security cooperation. The relationship would deepen and grow as Kazakhstan proceeds through economic and political reforms.

Other Issues ------------

21. (C) At the end of the meeting, Nazarbayev referred to briefing papers for the first time. He said that Kazakhstan was holding a conference on Central Asia in Washington October 25, and was seeking high-level administration attendance. The Kazakhstani delegation would be led by his Assistant, Karim Masimov, whom he hoped would be able to see Secretary Rice to deliver a letter responding to President

Sipdis Bush's recent letter. He asked for U.S. assistance with WTO accession. Finally, he asked for U.S. support for Kazakhstan's candidacy for OSCE Chairman-in-Office in 2009. He admitted that further reform efforts would be needed, including strong performance on the presidential elections, for Kazakhstan to be a viable candidate.

22. (U) A/S Fried has cleared this cable.

23. (U) Dushanbe minimize considered. Ordway

Nnnn
The story is more than just gossip. It shows that Turkmenistan is no better off following the death of the dictator Niyazov. Berdymukhamedov is a typical Central Asian despot, a man who, as a dentist, used to drive an old Russian car, but who now prefers luxury. He installs friends and fellow clan members in powerful government positions and neglects relations with neighboring countries.

Today, his garage is allegedly filled with a Bentley, a Maybach ("gift of a German company," reads a US dispatch), a Range Rover and a Cadillac Escalade, according to an American source. Berdymukhamedov's wife lives in London, the dispatch continues, and the president himself has a Russian mistress, a nurse in the dentist's office where he used to work. One of his daughters likewise lives in London, another in Paris.

Similar Stories of Nepotism

More importantly from a political perspective, however, is the fact that the president is considered vain, suspicious, very conservative and just as good a liar as he is an actor, the US ambassador writes. His father, a former prison guard with the rank of colonel, is said to be much more intelligent than his son. And: Berdymukhamedov likes neither the US nor his neighbor Iran, but has a weakness for China. The leaders of Uzbekistan and Kazakhstan have little respect for him.

US diplomats have similar stories of nepotism and corruption from neighboring Kazakhstan. More importantly, however, the country's president, Nursultan Nazarbayev, is "the most important partner for the United States in the region," according to a cable from August 2006.

Nazarbayev's country too has large oil and gas reserves. And the leader himself, formerly the head of Kazakhstan's Communist Party, is the most adroit of Central Asian leaders.

Since 2002, Nazarbayev has granted US planes flyover rights for missions to Afghanistan. Not surprisingly, therefore, US Undersecretary of State Daniel Fried was effusive in his praise of "the strong progress Kazakhstan has made under President Nazarbayev's leadership in establishing its sovereignty and in building a free market system" during a visit to the ultramodern new capital, Astana.

But when Fried urged the Kazakh president to hold "good elections" and quoted then US Secretary of State Condoleezza Rice as having said "our interest in security and in democracy is indivisible," Nazarbayev tersely remarked: "Trying to implement democratic reform in poor countries will end up badly. Kazakhstan ... had chosen a different path: first the economy, then politics."

Overly Ambitious

The autocratic president, who is suspected of corruption himself, insisted he was "a friend of the US." That should be enough. Two months later, the man who had ruled his country since 1990 was confirmed as its president for another seven-year term by a suspiciously high 91.1 percent of the votes.

The US Embassy noted that the official results "probably did not" reflect true voting patterns. On the other hand, however, the Nazarbayev regime has proven to be rather truculent in its relations with Moscow. Despite pressure from the Kremlin, for example, he refuses to recognize the two Caucasian republics of Abkhazia and South Ossetia, which broke away from Georgia with the Kremlin's backing.

US diplomats are busy trying to ensure that Kazakhstan becomes an even less-reliable ally for Moscow in the future. In a confidential memo from the American embassy in Astana dated Feb. 22, 2010, diplomats reported they were looking after a "pro-western faction within the Ministry of Defense," led by a pro-American senior politician.

"We have the long-term goal of transforming the Kazakhstan Armed Forces into a deployable force which not only can adequately protect national sovereignty, but also becomes an agent of democratic reform and rule of law within Kazakhstan," one cable reads. That, though, may turn out to be overly ambitious.

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