’Lee’s refusal to visit Turkmenistan caused $1 bil. loss’

By Lee Tae-hoon

Korean companies might have been victimized by unfair business practices in Turkmenistan due to President Lee Myung-bak’s refusal to visit the energy-rich Central Asian country, according to a U.S. diplomatic cable released by anti-secrecy website WikiLeaks.

The confidential document was written on Jan. 7 last year after an official at the U.S. Embassy in Turkmenistan met with Park Joo-ik, economic counselor at the Korean Embassy there, following reports that Korean companies had reached commercial deals with the country.

“An ROK Embassy official emphasized that Korean companies still have difficulty entering the Turkmen market,” it read. “The November 2008 visit to South Korea by President Gurbanguly Berdimuhamedov failed to boost trade ties when his Korean counterpart turned down an invitation to visit Turkmenistan.”

Park noted that Lee initially intended to visit Turkmenistan, but changed his mind after learning that the government there was not willing to sign commercial deals during the proposed trip — only “less than specific” bilateral agreements.

Berdimuhamedov visited Korea in early November 2008, and he and Lee agreed to expand bilateral cooperation in economic and financial sectors. The two leaders announced that Turkmenistan would support Korea’s efforts to secure a stable supply of energy and other resources.

Korea, in turn, agreed to provide economic development expertise to help modernize the former Soviet republic’s infrastructure and industry.

According to the cable, Park told the U.S. official that he was convinced that Berdimuhamedov “punished” companies from Korea because he was “deeply offended” by Lee’s refusal to visit his country.

“Park opined that Korea’s failure to send its president to Ashgabat might have cost Korea nearly a billion dollars,” it read.

“The only thing that might repair the damage would be a visit to Ashgabat by the Korean President,” it quoted the Korean official as saying.

Park said Korean businesses were becoming more frustrated with Berdimuhamedov’s “capriciousness.”

He went on to say that the Japanese announced during a visit by the Turkmenistan President that they intended to participate in a project to modernize the Turkmenbashy seaport, a project Korean companies were expected to carry out.

“Park believed the Turkmenistan government would most likely give that contract to another company, if the company’s country of origin is on Berdimuhamedov’s good list at the moment,” it read.

In this regard, U.S. Ambassador Sylvia Reed Curran commented that Park rightly pointed out that a foreign company’s success in Turkmenistan is often tied to its country’s broader bilateral relationship with the local government, in particular the quality of engagement with the Turkmen President.

“If Berdimuhamedov feels respect from his foreign counterparts, he is more apt to reciprocate with commercial deals; the converse appears to be true as well,” she said.