Cablegate: Turkmenistan: President Tries to Kick-Start

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UNCLAS SECTION 01 OF 04 ASHGABAT 000474

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C O R R E C T E D C O P Y (PARA MARKING - PARA 1)

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E FOR UNDER SECRETARY JEFFERY
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E.O. 12958: N/A
TAGS: PGOV PREL EAID ECON EFIN SCUL TX
SUBJECT: TURKMENISTAN: PRESIDENT TRIES TO KICK-START
ECON/FINANCIAL, MEDIA, OTHER REFORMS

REF: 07 ASHGABAT 1246

ASHGABAT 00000474 001.2 OF 004

1. (SBU) SUMMARY: President Gurbanguly Berdimuhamedov on
April 14 held a marathon cabinet meeting at which he
announced a number of new initiatives in the
economic/financial, media, and construction sectors directed
toward accelerating reform. Most significantly, he ordered a
one-year process for redenomination of Turkmenistan's
currency, introduction of a new management department in the
State Institute for National Economy, fired Central Bank
Chairman Abilov and promoted Minister of Finance Hojamyrat
Geldimyradov to Deputy Prime Minister. He directed that
media should begin covering foreign news, and instructed that
Turkmenistan should begin establishing overseas news bureaus
-- and should begin allowing foreign journalists in to cover
the country. All of this is quite remarkable and, if fully
implemented, would hasten significant reform. END SUMMARY.

2. (SBU) The business-like April 14 cabinet meeting, whose
purpose was to review results from the first quarter of 2008
and long-range strategies for economic/social development,
was one of the longest and most extensively reported that
President Berdimuhamedov has ever held. The president
focused primarily on three sets of issues: economy/finance,
media/Internet, and construction. Demonstrating that this
was meant to be an unusually important meeting,
Turkmenistan's newspapers on April 15 focused solely on
reporting the cabinet meeting and the related presidential
decrees, contrary to usual practice.

ECONOMIC/FINANCE: KEY PERSONNEL CHANGES OFFER HOPE OF MORE
COOPERATION

3. (SBU) Noting the importance of the changes that
Turkmenistan is making in the financial sphere, including the
unification of the dual exchange rate, Berdimuhamedov said he
was making some additional changes, including:

-- A decree on currency redenomination orders banks to begin
January 1, 2009, introducing new national currency which
would make one new manat equal to 1000 old manats, and
requires redomination to be completed by December 31 2009
(more septel).

-- Turkmenistan's State Institute of National Economy will be
renamed the State Institute of Economy and Management to
develop a cadre of highly qualified experts in market
development and management. The Institute and the Ministry
of Education have been tasked to establish a new charter and
a plan for restructuring the Institute within a month.

-- To help promote a new concept for economic and social
development, the president designated Balkan Province as the
pilot province for implementing a stage-by-stage transition
to a market economy by 2012 with the guidance of UN
specialists. Other provinces will be expected to follow
suit, learning from Balkan's experiences.

-- Central Bank Chairman Geldimurat Abilov was fired "for
serious shortcomings" and for not following through on tasks
related to unification of the exchange rate. Berdimuhamedov
appointed Vneshekonombank Chairman Guvanch Goklenov in
Abilov's place (more septel). (NOTE: Goklenov's wife and
Berdimuhamedov's wife are sisters, and Goklenov is also the

ASHGABAT 00000474 002.2 OF 004

nephew of Minister of Textiles Jemal Goklenova. END NOTE.)

-- Berdimuhamedov promoted Minister of Finance Hojamyrat
Geldimuradov to the position of Deputy Prime Minister, giving
him responsibility for the entire "economic block," including
the Ministries of Finance, Economy and Development, Social
Welfare, the State Tax Service, the Central Bank, and all of
Turkmenistan's banks.

-- Deputy Prime Minister for Transportation and
Communications Gurbannazar Ashyrov was removed "for grave
shortcomings and inability to fulfill his duties."
Berdimuhamedov temporarily handed over responsibility for
overseeing these sectors to Deputy Prime Minister for Energy,
Industry, Construction and Motor Transportation Nazarguly
Shaguliyev.

-- Chairman of the State Oil and Gas Construction Concern
Jumageldi Babashev was replaced by Atamurat Durdiyev,
previously a deputy chairman of the State Concern.

-- Bayar Abayev was appointed Chairman of the Food Industry
Association.

-- Bayramgeldi Jumayev was appointed Chairman of the
"TurkmenMallary" Livestock Association.

MEDIA/INTERNET: FOCUS ON INTERNATIONAL COVERAGE AND
BROADENING INTERNET ACCESS

4. (SBU) Making Deputy Chairman for Culture and Media Maysa
Yazmuhammedova and all state reporters attending the meeting
stand up, Berdimuhamedov delivered a pointed, but still
gently worded rebuke of their work, stating that they needed
to increase their professionalism. Specifically, he:

-- Stated that Turkmenistan's mass media should cover
international news, ordered that the Watan channel should
establish a department to cover international news, and said
there should be a cadre of journalists who specialize in
analysis of domestic and overseas political events.

-- Instructed that Turkmenistan should establish overseas
bureaus staffed by Turkmen journalists and said -- without
elaboration -- that foreign media should be allowed to cover
events in Turkmenistan.

5. (SBU) The president gave all mass media organizations two
months to address their shortcomings, or face a major
reshuffling. After Supreme Audit Chamber Director Japarov
criticized the Ministry of Communications for not making
Internet widely available and for excessive prices at public
Internet cafes, Berdimuhamedov delivered a sharp rebuke to
the Minister of Communications for the lack of affordable
public access to the Internet and gave the minister two
months to show improvement (septel).

CONSTRUCTION: BEGINNING OF A QUALITY-BASED CONTRACT SYSTEM?

6. (SBU) Noting the importance of construction to
Turkmenistan's economic development, the president addressed
representatives of Turkish and France's Bouyges construction
firms, calling on them to complete their construction
contracts on time and warning them that their contracts would

ASHGABAT 00000474 003.2 OF 004

be taken from them if they do not complete their projects in
a timely manner. Listing the best and worst construction
firms by name, he also warned them that Turkmenistan will
begin checking the quality of their work, and instructed his
cabinet not to register or license any construction firms
with insufficient capital and equipment to do their
contracted work (more on this septel). The president split
the Ministry of Construction and Construction Materials
Industry into two, and put the minister of the former super
ministry, Shamuhammet Durdyliyev, in charge of the new
Ministry of Construction.

OTHER ISSUES: PREPARING FOR A CENSUS AND CRACKING DOWN ON
SCHOOLS

7. (SBU) During the meeting, the president also signed a
large number of other decrees. Two of the most significant
included an order to begin overhauling registry procedures to
carry out a national census in 2012, and an order to ensure
that all schools are equipped with multi-media centers. The
president instructed that any schools that do not obtain this
new equipment will not be allowed to function.

8. (SBU) COMMENT: Taken as a whole, the president's changes
focus on accelerating deeper, more significant reforms in
Turkmenistan. We note, however, a trend of appointing people
the president trusts -- relatives and individuals from his
home region -- to replace non-performing hangers-on from
former President Niyazov's regime. With implementation the
key to determining these measures' success, getting Abilov
out of the Central Bank and promoting Geldimuradov (who
genuinely seems to understand the need for change) to a more
responsible position seem to be good moves. It is unclear,
however, whether Goklenov, whose primary qualification for
his new position seems to be his relationship to the
president, will be an improvement on Abilov. END COMMENT.

BIO: HOJAMURAT GELDIMURADOV

9. (U) Geldimuradov was born in 1965 in Borme Village of
Baharly District in Ahal Province. He entered the Department
of Economy and Organization Construction of the Turkmen
Polytechnic Institute. From 1983-1985, he served in the
military in Leningrad (presently Saint Petersburg, Russia).
He graduated from the Turkmen Polytechnic Institute in 1989,
and from the Law Academy of Ukraine named after Yaroslav
Mudryi in 2004. From 1990 to 1997, he served as the Head of
the Accounting Department of the State Tax Service of Baharly
District, then, from 1997-2004, he worked in Ahal Province's
State Tax Service. After graduating from the Law Academy in
2004, he worked for a year as the head of the department on
overseeing the work of tax services at the Main State Tax
Service. From 2005 to 2007, he served as Deputy Minister of
Economy and Finance, followed by a one-year stint (until
February 8, 2008) as Minister of Economy and Finance. In
this capacity, Geldimuradov represented Turkmenistan at the
2007 Central Asia TIFA meeting in Washington, DC. When the
president divided the ministry into two entities,
Geldimuradov became Minister of Finance.

BIO: SHAMUHAMMET DURDYLiYEV

10. (U) Durdyliyev was born in 1963 in Baharly township,
Ahal Province. He graduated from the Industrial and

ASHGABAT 00000474 004.2 OF 004

Residential Department of the Turkmen Polytechnic Institute,
where he majored in civil engineering, in 1986. From
1986-1990, he served as an engineer for occupational safety
and construction at Baharden Mobile Mechanical Division #3.
In 1990, he became an engineer at the production and
technical department of a self-financed construction field.
From 1992-1993, he served as Head of the Baharden
self-financed construction field of the "AshgabatRemBytStroi"
-- Ashgabat's renovation of public amenities centers. In
1993, he served briefly as Head of the Construction and
Assembling Management #3 of the "Ahal Province Gas"
Production Association, before becoming construction manager
at the Baharden District Specialized Mobile Mechanical
Division #17. In 1994 he served for a year as deputy head of
Baharly township, followed by seven years (until 2002) as an
engineer, senior engineer, then head of the "Baharden water
management production administration. From 2002-2007, he
worked as a deputy head and head of the Ahal village
construction production administration. He became Deputy
Minister of Construction and Construction Materials Industry
on August 21, 2007, and then, on July 9, 2007, Minister.

BIO: GUVANCH GOKLENOV

11. (U) From 1997-1999, Goklenov served as Deputy Chairman
of the Board of Directors of the State Bank for Foreign
Economic Activities (Vneshekonombank). From 2000-2001, he
served as Deputy Chairman of the Board of Directors of
Vneshekonombank, while also serving as Governor of the
Islamic Bank of Development for Turkmenistan and Governor of
the European Bank of Reconstruction and Development for
Turkmenistan. On March 31, 2001, he was named Chairman of
the Board of Directors of Vneshekonombank.
HOAGLAND

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