BURNS
PRINCE ANDREW RAILS AGAINST
FRANCE, THE SFO AND THE GUARDIAN
Wednesday, 29 October 2008, 12:07
CONFIDENTIAL SECTION 01 OF 04 BISHKEK 001095
CORRECTED COPY (ADDRESSEE)
Classified By: Amb. Tatiana Gfoeller, Reason 1.4 (b) and (d).
1. (C) SUMMARY: On October 28, the Ambassador participated in a two-hour brunch to brief HRH the Duke of York ahead of his meetings with the Kyrgyz Prime Minister and other high-level officials. She was the only non-subject of the United Kingdom or the Commonwealth invited to participate by the British Ambassador to the Kyrgyz Republic. Other participants included major British investors in Kyrgyzstan and the Canadian operator of the Kumtor mine. The discussion covered the investment climate for Western firms in the Kyrgyz Republic, the problem of corruption, the revival of the “Great Game,” Russian and Chinese influence in the country, and the Prince’s personal views on promoting British economic interests. Astonishingly candid, the discussion at times verged on the rude (from the British side). END SUMMARY.
2. (C) British Ambassador to the Kyrgyz Republic Paul Brummell invited the Ambassador to participate in briefing His Royal Highness Prince Andrew, the Duke of York, ahead of his October 28 meetings with Kyrgyz Prime Minister Igor Chudinov and other high-level officials. The Prince was in Kyrgyzstan to promote British economic interests. Originally scheduled to last an hour over brunch, the briefing ended up lasting two hours, thanks to the super-engaged Prince’s pointed questions. The Ambassador was the only participant who was not a British subject or linked to the Commonwealth. The absence of her French and German colleagues was notable; they were apparently not invited despite being fellow members of the European Union. Others included major British investors in Kyrgyzstan and the Canadian operator of the Kumtor mine.
“YOU HAVE TO TAKE THE ROUGH WITH THE SMOOTH”
3. (C) The discussion was kicked off by the president of the Canadian-run Kumtor mine, who described at length his company’s travails of trying to negotiate a revised mining concession that provides a greater stake in Kumtor’s parent company to the Kyrgyz government in exchange for a simplified tax regime and an expanded concession. He was followed by the representative of the British owner of Kyrgyzneftigas, who explained his company’s role in Kyrgyz oil exploration and production, as well as doing his share of complaining of being harassed and hounded by Kyrgyz tax authorities. One example he gave was that a Kyrgyz shareholder was now suing the company, saying that his “human rights” were being violated by the terms of his shareholders’ agreement.
4. (C) The Prince reacted with unmitigated patriotic fervor. To his credit, he diligently tried to understand the Kyrgyz point view. However, when participants explained that some Kyrgyz feel that they were “unfairly” led in the 1990s to sign unfavorable contracts with Westerners, he evinced no sympathy. “A contract is a contract,” he insisted. “You have to take the rough with the smooth.”
“ALL OF THIS SOUNDS EXACTLY LIKE FRANCE”
5. (C) After having half-heartedly danced around the topic for a bit, only mentioning “personal interests” in pointed fashion, the business representatives then plunged into describing what they see as the appallingly high state of corruption in the Kyrgyz economy. While claiming that all of them never participated in it and never gave out bribes, one representative of a middle-sized company stated that “It is sometimes an awful temptation.” In an astonishing display of candor in a public hotel where the brunch was taking place, all of the businessmen then chorused that nothing gets done in Kyrgyzstan if XXXXXXXXXXXX does not get “his cut.” Prince Andrew took up the topic with gusto, saying that he keeps hearing XXXXXXXXXXXX name “over and over again” whenever he discusses doing business in this country. Emboldened, one businessman said that doing business here is “like doing business in the Yukon” in the nineteenth century, i.e. only those willing to participate in local corrupt practices are able to make any money. His colleagues all heartily agreed, with one pointing out that “nothing ever changes here. Before all you heard was Akayev’s son’s name. Now it’s XXXXXXXXXXXX name.” At this point the Duke of York laughed uproariously, saying that: “All of this sounds exactly like France.”
6. (C) The Prince then turned to the Ambassador for an American take on the situation. The Ambassador described American business interests in the country, which range from large investments such as the Hyatt hotel and the Katel telecommunications company to smaller investments in a range of sectors. She stated that part of the problem with business conditions in Kyrgyzstan was the rapid turnover in government positions. Some reacted to their short tenures in a corrupt manner, wanting to “steal while they can” until they were turned out of office. While noting the need for greater transparency in doing business, she recounted that she had hosted the American Chamber of Commerce’s Members Day last week (attended by the Foreign Minister and the Deputy Minister of Trade and Commerce) which had been widely attended and a resounding success (see reftel). She then described the beneficial impact on the Kyrgyz economy of the Coalition Air Base at Manas Airport.
“YOU HAVE TO CURE YOURSELF OF ANOREXIA”
7. (C) With a mock groan, the Duke of York then exclaimed: “My God, what am I supposed to tell these people?!” More seriously, he invited his guests to suggest ways Kyrgyzstan’s economic prospects and attractiveness could be improved. Everyone agreed that in his talks with the Prime Minister and others, he should emphasize the rule of law, and long-term stability.
8. (C) Agreeing with the Ambassador’s point about rapid government turnover, they urged him to impress upon his hosts the importance of predictability and the sanctity of contracts in order to attract more Western investment. At the same time, they pointed out that none of this was necessary to attract Russian, Kazakh, or Chinese investments. It appeared to them that the Kyrgyz were satisfied with their level and on the verge of “not bothering” with making the necessary improvements to attract Western investments. Returning to what is obviously a favorite theme, Prince Andrew cracked: “They won’t need to make any changes to attract the French either!” Again turning thoughtful, the Prince mused that outsiders could do little to change the culture of corruption here. “They themselves have to have a change of heart. Just like you have to cure yourself of anorexia. No one else can do it for you.”
PLAYING THE GREAT GAME (BY EXTENSION THE AMERICANS TOO)
9. (C) Addressing the Ambassador directly, Prince Andrew then turned to regional politics. He stated baldly that “the United Kingdom, Western Europe (and by extension you Americans too)” were now back in the thick of playing the Great Game. More animated than ever, he stated cockily: “And this time we aim to win!” Without contradicting him, the Ambassador gently reminded him that the United States does not see its presence in the region as a continuation of the Great Game. We support Kyrgyzstan’s independence and sovereignty but also welcome good relations between it and all of its neighbors, including Russia.