USIA 10 May 1999 U.S. ENVOYS TO CASPIAN BASIN TOUT INVESTMENT PROSPECTS (Say financial payoff requires long-term commitment) (900) By Phillip Kurata USIA Staff Writer Washington -- U.S. ambassadors assigned to energy-rich countries surrounding the Caspian Sea are offering "gold key" service to U.S. businesses considering investing in Central Asia. "We offer gold key service.... We will help you get started. We'll help you make appointments. We'll rent you a car. We'll rent you an interpreter. We'll make hotel reservations -- all kinds of things like this," U.S. Ambassador to Azerbaijan Stanley Escudero said at a May 7 business forum in Washington. The U.S. embassies in Kazakhstan and Turkmenistan offer similar services to help U.S. companies capitalize on potentially enormous opportunities in the Caspian Basin, which has huge oil and gas reserves. The U.S. government has opened a business center in Ankara, Turkey, staffed by trade promotion officials to help U.S. business people to establish contacts in Turkey and points east. The U.S. Caspian diplomacy is pegged to two proposed pipelines. One would carry crude oil from Baku, Azerbaijan, through Georgia to Turkey's Mediterranean port at Ceyhan. The second would pump natural gas from Turkmenistan, under the Caspian Sea, through Azerbaijan and Georgia to Turkey. The United States and its NATO partner Turkey have embarked on a policy to bring democracy, stability and prosperity to the Caucasus and Central Asia by encouraging foreign investment in the region's fledgling free market economies. Ambassador Escudero said business, not aid, fosters development. "What develops a nation is business activity. What develops a nation is the new wealth which is created and the new knowledge that is created and the multiplier effect of successful activities.... Azerbaijan is ready for that. It's ripe for it," Escudero said. Speaking at the same forum with Escudero were U.S. Ambassador to Armenia Michael Lemmon, U.S. Ambassador to Georgia Kenneth Yalowitz, U.S. Ambassador to Kazakhstan Richard Jones, U.S. Ambassador to Turkmenistan Steve Mann, U.S. Ambassador to Uzbekistan Joseph Presel, and U.S. Ambassador to Turkey Mark Parris. With the exception of Parris, the ambassadors also spoke to business conferences in New Orleans and New York to publicize the investment opportunities in the Caucasus Basin. The three main U.S. trade agencies -- the Trade and Development Agency, the Export-Import Bank, and the Overseas Private Investment Corporation -- are offering incentives and guarantees to U.S. companies willing to risk investment in the former Soviet republics. Jones, the U.S. envoy to Kazakhstan, voiced a theme common to all the ambassadors. "Kazakhstan is not a market for the faint hearted. It's a high-maintenance business environment that will require financial strength and a significant amount of executive time and energy to make your business profitable," he said. Costly customs delays, bureaucratic red tape to obtain work permits, inconsistent application of the tax code and lack of respect for contracts are a partial list of pitfalls facing U.S. businesses in Kazakhstan, Jones said. Nevertheless, more than 100 U.S. companies have opened offices in Almaty, the commercial capital of Kazakhstan, in sectors such as oil and gas, consumer goods, power generation and telecommunications, Jones said. The ambassador has a doctorate in business and said he was chosen for the Kazakhstan assignment because he could be instrumental in helping the country's conversion to a Western-style economy. "I met with President (Nursultan) Nazarbayev just prior to my departure from Kazakhstan for this tour to stress our concerns in commercial issues. In this meeting, he reiterated his strong desire for more U.S. direct investment in Kazakhstan. He also reiterated his wish to diversify Kazakhstan's economy, create more jobs and spur economic growth," Jones said. Turkmenistan, possessing the world's fourth largest proven reserves of natural gas and large oil deposits, is hampered by a lingering addiction to central planning, Ambassador Mann said. President Saparmurat Niyazov personally supervises political affairs, even at the local level, Mann said. "With Turkmenistan, the question is, When is this energy potential going to be exploited? Will it be? I think the answer is, yes, it will be. I think the time is now," Mann said. Azerbaijan and Turkmenistan are progressing toward a resolution of their territorial dispute over the delineation of the Caspian Sea. The ambassador said he is encouraged by the competence of Niyazov's advisers and ministers in the energy sector who have convinced the Turkmen leader to approve the construction of a trans-Caspian natural gas pipeline. Turkmen gas is a crucial element in Turkey's development plans. Within a decade, natural gas is projected to account for a quarter of Turkey's energy needs. At present, the clean-burning fuel satisfies about an eighth of Turkey's energy consumption. Turkey, with it commercial and historical ties to Central Asia, is the springboard for injecting Western capital and technology into the Caspian Basin, said Ambassador Parris said. "I think there is probably no better example anywhere in the world of two countries cooperating in terms of strategic objectives than the work that the United States and the government of Turkey have done to help to move toward the reality of an east-west energy transportation corridor," Parris said. Construction of pipelines raises the necessity for broad-based infrastructure development, the ambassadors said. They highlighted the need for cement factories, roads, airports, water purification systems and waste management. "Pretty much the entire gamut of projects which are involved in the redevelopment of a country," Ambassador Escudero said.
