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Cablegate: Lunch with Max: Soup to Nuts

VZCZCXRO3292
RR RUEHBI RUEHCI RUEHDBU RUEHLH RUEHNEH RUEHPW
DE RUEHEK #1065/01 2651124
ZNY SSSSS ZZH
R 221124Z SEP 09
FM AMEMBASSY BISHKEK
TO RUEHC/SECSTATE WASHDC 2688
INFO RUCNCIS/CIS COLLECTIVE
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RHMFISS/CDR USCENTCOM MACDILL AFB FL
RHEHNSC/NSC WASHDC
RUEKJCS/SECDEF WASHDC
RUEKJCS/OSD WASHDC

S E C R E T SECTION 01 OF 03 BISHKEK 001065

C O R R E C T E D C O P Y (SECURITY CLASSIFICATION CHANGED)

SIPDIS

STATE FOR SCA/CEN

E.O. 12958: DECL: 09/21/2019
TAGS: PGOV PREL KG
SUBJECT: LUNCH WITH MAX: SOUP TO NUTS

REF: BISHKEK 1058

BISHKEK 00001065 001.2 OF 003


Classified By: Ambassador Tatiana C. Gfoeller, for Reasons 1.4 (b) and
(d).

1. (S) Summary: In a wide-ranging lunch, Maxim Bakiyev, son
of President Bakiyev, and Kyrgyz FM Sarbaev argued that the
$20 million Economic Development Fund needs to be a new kind
of assistance, targeted strategically toward the development
of the country and its integration into the world economy.
Bakiyev described Russian machinations against the U.S. and
his own intelligence efforts against the Russians, complained
about personal attacks on him by an organization connected to
the National Democratic Institute, and stated that the
Russians have not come through with the $2 billion they had
promised for the Kamburata 2 hydroelectric project. Bakiyev
came across as very pro-U.S., well educated, and dedicated to
the betterment of his country. Of course, we have
information from many other sources suggesting that he is
also very dedicated to his own advancement and corrupt
financial interests. End Summary.

2. (SBU) Ambassador and DCM had lunch with Maxim Bakiyev,
the son of President Bakiyev and Foreign Minister Kadyrbek
Sarbaev on September 18, at the invitation of the Foreign
Minister. Plov, Manti and other Central Asian delicacies
were served at one of the guest houses on the Presidential
compound. The tone of the hosts was extremely warm and
friendly, and the conversation was open and wide ranging.

Russian Meddling
----------------

3. (C) Sarbaev and the Ambassador began with a short
discussion of the delivery, the day before, of the Department
of Defense check for $250,000 to Marina Ivanova, the widow of
the man killed in the Hatfield case. The Ambassador thanked
Sarbaev for facilitating delivery of the check. Bakiyev
noted that the Russians had played an unhelpful role with
Mrs. Ivanova. He said they had met with her in July and
tried to convince her to come out in the press again to
denounce the U.S. and call again for the closing of the U.S.
base. Kyrgyz officials had then met with her, he said, and
convinced her that it was not in her interests to become a
pawn in a fight between the U.S. and Russia.

4. (S) Bakiyev followed up by noting that the Russians play
an unhelpful role in many issues. However, he said, "I have
my own very good computer experts, and we are able to
intercept and read FSB communications." In that way, he
said, they keep abreast of what the Russians are doing. He
said that he had read intercepts from the FSB regarding his
own efforts to put together a team of experts to study the
needs of the country (further described in para 8 below).
The Russians had concluded that the Americans must be behind
the effort, as it was too well put together to be Kyrgyz, he
said, commenting that the Russians are racist in their view
of the Kyrgyz.

And Democracy Activists Meddling, Too
-------------------------------------

5. (C) There were also problematic people within Kyrgyzstan,
Bakiyev said. Just a few months ago articles attacking him
personally began appearing on the website compromat.ru. His
computer people had been able to trace them back to
"purported" democracy activist Tolekan Ismailova, director of
the Human Rights Center "Citizens against Corruption" which
receives grants from the National Democratic Institute of the
U.S. (Ismailova was arrested and released on July 30, 2009
for protesting the presidential election.) Bakiyev was
unaware of a major article in the Kyrgyz press that very
morning which stated that he, Maxim Bakiyev, is the power
behind the throne in Kyrgyzstan, and that he wields that
power with the acquiescence and at the direction of the USG
(via the CIA).

The Trips to the U.S., and the Elections
----------------------------------------

6. (U) The Ambassador and Sarbaev discussed the upcoming
travel of the Prime Minister and Sarbaev himself to the U.S.
for UNGA, consultations in Washington, and then Sarbaev's
trip for discussions of the Annual Bilateral Consultations
mechanism. Sarbaev noted that this is the first trip to the

BISHKEK 00001065 002.3 OF 003


U.S. for the PM and that it is very important that it go
well. Ambassador pointed out that the Kyrgyz delegation
certainly must realize that U.S. concerns about human rights
and democratization will be raised in many of the PM's
meetings. He should be prepared to answer these questions in
a positive and forthcoming manner. She also noted that
slippage in the MCC indicators was also likely to be raised
during the visit.

7. (U) Bakiyev picked up on the Ambassador's comments to
state that the GOKG is very positive and proactive in its
response to all these issues. It considers them to be very
important. "When the OSCE criticized the presidential
elections," he stated, "we asked them to be specific. What
were the deficiencies? Which were the districts where fraud
had taken place? We told them that we would annul the
results from any polling stations where there had been fraud.
We got no response from them."

Development, the EDF, and Thinking Strategic
--------------------------------------------

8. (SBU) Bakiyev then broadened the subject by stating, in
terms that echoed what the PM told the Ambassador this week
(REFTEL), that they have brought together experts from many
different fields to discuss what needs to be done in the
country. Their desire to reform the institutions of
Kyrgyzstan was reflected in Bakiyev's September 1 speech.
However, he said, the country simply does not have the kind
of economic expertise it needs in order to put together a
real plan for development. That was what they hoped would
come of the new $20 million Economic Development Fund (EDF).
They would like to have a high-powered economic consultancy
come in, someone like Price Waterhouse, who could put
together a study of Kyrgyzstan's place in the world economy
and what the country needs to do to spur integration and
development.

9. (SBU) Donor support, and especially USAID, brought these
sorts of consultants to Kyrgyzstan in the early 1990s,
Bakiyev said, but they were always focused narrowly on an
already defined set of projects which were imported from
abroad -- like privatization. There was never a study of
Kyrgyzstan's potential and the barriers to development which
took a look at what overall strategy the country should
pursue and how to implement it. This was what they needed
and wanted -- and the Kyrgyz themselves should be the ones to
put together the questions which should be put to the
consultants, since they knew their country best.

10. (SBU) Ambassador responded that the proposed structure of
the fund, now on the Prime Minister's desk in the form of a
Memorandum of Understanding, would allow the GOKG to propose
just such a study, if that was what they believed was needed.
Bakiyev reiterated that the need was to gain an
understanding of the place Kyrgyzstan should occupy in the
world economy and how to take advantage of its opportunities
in order to develop. "We do not want this money for
ourselves," he said, "but we want to ensure that it is not
used in traditional, unhelpful, assistance projects, but
instead in something that is really well thought through."

11. (SBU) Bakiyev noted that one of Kyrgyzstan's natural
advantages was its hydroelectric power potential. He
expressed support for CASAREM and bemoaned the delays in
funding by the Asian Development Bank. Ambassador asked
about the status of the Kamburata 2 hydro electric project.
Bakiyev responded that the Russians had not yet come through
with the promised loan of $2 billion. He noted that the
final cost of the project is not yet clear, given that
construction would take about eight years and input prices
are not stable.

Comment: Smart, Corrupt, and a Good Ally to Have
--------------------------------------------- ----

12. (C) Maxim Bakiyev is smart and well educated. He was
able to discuss subjects ranging from early European history
to economics without any strain at all. He is apparently a
voracious reader, and said he is currently reading
Greenspan's Age of Turbulence. According to many sources of
widely varying credibility, he is also corrupt and benefiting
economically from his father's power. Statements he made
during this lunch suggest that he could still be an ally on
issues important to the USG, ranging from his support for the

BISHKEK 00001065 003.2 OF 003


Transit Center's continued operations to economic reform. It
was interesting to note that, while the convener of this
lunch was the Foreign QxMe,Qas2evQ talking points on
the Economic Development Fund were very similar to those the
Prime Minister used with the Ambassador this week. Clearly
Bakiyev has influence and access through a broad swath of the
government. While this is a relationship which must be
cultivated carefully, we believe it is also a relationship
which can pay important dividends for the USG.
MEMMOTT

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