A/S Blake: I am in Kazakhstan for a few hours. Right after this I will be having a meeting with business community to talk a little bit about all our efforts to promote regional economic integration and help Afghanistan and so forth. I thought it would be useful to talk to each of you as well about Kazakhstan and some of our regional integration efforts. I will just make a few opening comments and I will be glad to take your questions.
We are on the record unless we say otherwise. Just to start with, I am really delighted to be back here in Almaty and particularly delighted to be here in the wake of Kazakhstan’s great Olympics success, which I gather got quite a lot of attention here and got a lot of attention in the U.S. A relatively small country like Kazakhstan getting six gold medals and ten medals overall was quite a bit, so congratulations.
Reuters: Seven medals.
Blake: Was it?
Reuters: Seven gold medals and twelfth ranking among the countries.
Blake: Right. In terms of our relations with Kazakhstan, I think they are deepest and broadest of all countries in Central Asia. That is reflected in our decision earlier this year to establish a strategic partnership dialogue with Kazakhstan because we are increasingly working not just bilaterally with Kazakhstan but increasingly multilaterally. Not only in terms of Kazakhstan’s efforts in regional organizations, such the Organization of Islamic Cooperation, but also increasingly Kazakhstan is looking to expand its own assistance programs, to play a larger role in the regional integration process and work a lot on some of the very important regional issues, such as non-proliferation and so on. All of these are very consistent with what we are trying to accomplish and again one of the reasons why we have a very good partnership with Kazakhstan.
Kazakhstan, and really Almaty in particular, is also important, I think, because it is a regional hub, not just for business, but also for a lot of the international organizations that we work with to try to promote this regional integration idea. Again it is a good opportunity for me to have a few hours to come here. Secretary Clinton has talked a lot about our goals helping Afghanistan to become a secure state and a prosperous country and a secure, stable, and prosperous country within a secure, stable, and prosperous region. There have been a tremendous number of efforts over the last few years to help that goal. You know about a number of international conferences that took place, including the NATO Summit in Lisbon in 2010, continuing with conferences in Istanbul and Bonn and recently the NATO summit in Chicago and the Tokyo Conference in early July. I think all of those, particularly the last two conferences, have sent a very strong message of the strong long-term commitment of the international community to Afghanistan’s future, and I want to say that we appreciate very much Kazakhstan’s role in all of this.
Kazakhstan sent a representative to the NATO Summit and was also strongly represented in all these conferences. It is also taking a leadership role and is helping to develop all these transport corridors. For example, a rail line going down through Turkmenistan to Afghanistan and also some other important efforts they are helping with, for example, training young Afghan students here in Kazakhstan. I think it is quite an important time and it is important that we have Kazakhstan working with us. In terms of our wider efforts, you have all heard Secretary Clinton talk about this New Silk Road vision. She has talked about how we want to help these three important transitions that are going to occur in Afghanistan. The security transition, you are all aware of, whereby all of the NATO troops will leave Afghanistan by the end of 2014. There will be a residual force that will remain and that remains to be negotiated, the exact composition of that.
In the meantime, we are all working to build up the Afghan national security forces so that they can take complete control over their own security. There is equally important political transition that will occur with the elections that will take place in 2014. And then last but not least, the economic transition as well, to help Afghanistan become more self-sufficient economically, to build up a private sector, and a very important part of that is the regional integration piece.
There are really two different parts to this. First is what we call the software, which is trade liberalization, reduction of non-tariff trade barriers, reducing delays on border clearances, and those kinds of obstacles to trade. The second is the equally important task of all the infrastructure – the web of roads, pipelines, electricity transmission lines and so forth that are really the nuts and bolts of regional economic connectivity. I think quite a lot of progress has been made on projects like the Turkmenistan-Afghanistan-Pakistan-India gas pipeline and a lot of these railroads that I talked about.
Again, we appreciate very much the role Kazakhstan played in that. In March of this year, many of you may have been at this conference in Tajikistan, the Regional Economic Cooperation Conference for Afghanistan, RECCA, which for the first time resulted in quite a good detailed blueprint that all of the region endorsed. It was developed by Afghanistan and endorsed by the whole region and included series of projects and also all these software projects that I talked about. So, there is a good clear regional consensus on the way forward. Progress has been made and again we do appreciate the support Kazakhstan has provided to that. With those opening remarks, let me turn it over to you. We have about 20 minutes and then I have to run off to another event. Thank you for your time and thanks for coming.
AP: On the software issue, I am interested about Uzbekistan in particular because they seem to be the country that creates a lot of problems, seems to me, in terms of the political situation and actually lately the investment situation is looking as grim as ever, latest problem over there, with one of the mobile service providers. Given how little progress we see in Uzbekistan, how realistic it is to talk about the software being in place for Uzbekistan’s role in the region.
Blake: You are right there are challenges now in the investment climate in Uzbekistan. I am going to Uzbekistan later today and we are bringing with us a fairly large delegation of American companies. So, there is still a lot of private sector interest. But I think there is still quite a lot Uzbekistan needs to do to improve its investment climate, such as the currency convertibility issue, and a lot of bureaucratic procedures that still make it difficult to do business in Uzbekistan. As to your wider question, I think, first of all, it is important to note that Uzbekistan has been quite an important leader in developing many of the kinds of things that I talked about. For example, Uzbekistan built a rail line south to Mazar-e-Sharif in cooperation with the Asian Development Bank.
That is now the main rail line that goes through Central Asia, and a lot of the equipment and supplies for our troops in Afghanistan go through that rail line. Secondly, Uzbekistan has provided a great deal of electricity to Afghanistan that helped light Kabul and many other parts of Afghanistan. That’s been a tremendous help. I think they are cooperating in a lot of these efforts that the ADB has on the way, for example the CAREC effort, where there is I think quite a lot of important work to get at these issues, like how do you reduce the border clearance and delays, how do you address corruption, how do you begin to harmonize customs and other types of regulations. I think Uzbekistan is cooperating. They have an interest in that. They are the most centrally located country. So, this is a work in progress. This is something very much on our agenda. This is something that we want to work on with our friends in Uzbekistan to try to make progress on.
Bloomberg: As I am from Bloomberg, a gas pipeline is what we are more interested more in. You mentioned TAPI. Taking into account that China has built a big pipeline. And Russia has a project for another pipeline from Turkmenistan. Do you think the project will be feasible and when it can be realized?
Blake: Do you mean feasible in terms of gas supplies?
Blake: I think there are sufficient gas supplies. We have always supported the development of multiple pipelines out of Turkmenistan and other countries as well to support their energy independence. But we see that the TAPI gas pipeline is particularly important because it’s going to join two of the most important end-points in this regional connectivity that we talk about, Turkmenistan and India. India, of course, has gigantic energy needs because of its fast-growing economy. They need lots of gas. I think that is what really helped drive this project. There is now a real market in India and they can afford to pay for the gas. Turkmenistan has sufficient gas to fuel this pipeline.
The pipeline would also provide significant transit revenues for both Afghanistan and Pakistan. That is also quite important to this vision that I talked earlier about for Afghanistan. So, in terms of the pipeline I think there has been good progress on what they call gas sale-purchase agreements between these countries. The next milestone is that there will be a road show that will take place sometime in September, at which they will begin to have concrete discussions about who is going to form and lead this consortium to actually build this pipeline. This is a crucial series of discussions that will take place.
Bloomberg: Are American companies going to be engaged?
Blake: Certainly. The road show will be going to the United States but also other countries as well. Many American companies are very interested in participating.
Bloomberg: Do you mean investors or contractors?
Blake: It depends on what’s on offer. There are a lot of risks to participating in such a pipeline. Part of their consideration will be what kind of incentives Turkmenistan will be prepared to offer international companies to get involved in that project. We will see when the road show takes place.
Reuters: Tajikistan - How do you assess the security situation given the recent events in Gorno-Badakhshan? What has the Tajikistan government asked for in terms of security assurances ahead of the drawdown role that the U.S. will play in Tajikistan?
Blake: First of all, I think the situation in Khorogh has stabilized somewhat. I think the curfew and so forth still remains there. We have been very active in helping to evacuate some of the American citizens that were in that part of the country. We continue to follow the situation very closely. This is something of significant concern to us. This is an area that has not always been under the control of the central government in Tajikistan. This is an area where a lot of drug smuggling takes place. So, it shows importance of some of the work that we and others have underway, to help the government provide border security, to be able to monitor what comes across that border, particularly in that region. It also reinforces the need for the government to continue to take its own measures to stop the drug trade, to stop a lot of these narco-criminal networks that are operating in that part of the country. So, we support them in their efforts to do so. We have various efforts underway to help the Tajik government. One of the important things that they must do is to address some of the corrupt activities of their own border guards and others who are helping to facilitate some of this trade. I think it is a two-way street, where the international community can help with border security and other things, and the Tajik government itself must take steps to address some of the corrupt activities.
As to the future, I think Tajikistan has been a very strong supporter of what we are trying to accomplish in Afghanistan. They hosted this very important RECCA conference. They have always been open to any way they can help Afghanistan. They, of course, are themselves very poor. But they strongly support these regional integration efforts that we are trying to promote. So, we see Tajikistan as an important partner and we want to try to work with them as much as possible to address some of the challenges that they face, particularly the narcotics trafficking and the border security issues. They have legitimate concerns about attempts from groups that are based either in Afghanistan or Pakistan trying to cross their borders, either to attack their own government or move up to Kyrgyzstan or potentially even Kazakhstan. It is very important for them to work not only with the international community, but also with Kyrgyzstan and other countries in the region to address these problems.
AP: Going back to Uzbekistan…Would you have a chance to talk to raise the issue of accreditation for foreign journalists, which has been an issue for number of years. There is that issue.
Blake: Accreditation to visit or to be based there?
AP: Actually, to visit. I have been here for four years and I have never been granted any kind of permission, even to attend a conference or something like that. And I tried.
Blake: In general, we do talk a lot about freedom of the press and freedom of the media. We have problems with some of the American human rights organizations, like Human Rights Watch and others. But I was not aware that there was that obstacle. I will be glad to talk about that.
AP: The only international agency that is allowed is AFP.
Blake: I know that CNN was recently granted access. They went and generated quite a lot of reports.
AP: They did, although it’s a long story... It is quite conditional given the content of their reports. Also in Uzbekistan, there have been some reports from Russian media recently suggesting the possibility that during the drawdown during 2014 that military equipment might be left along. What assurances can be made making certain that the wrong things do not end in the wrong hands, by which I mean weaponry.
Blake: First of all, the process of allocating Excess Defense Articles is only just beginning. We are beginning the consultations on that. It won’t be just for Uzbekistan but for all countries partnering on NDN. There will be quite detailed conversations with our military people based in embassies in each of these posts, with host nation counterparts on this thing. With respect to Uzbekistan, I do not think there will be any lethal weapons of any kind that will be offered. I think most of the kind of things that will be on offer will be military vehicles, Humvees, those kind of things. It is in our interests to provide those kinds of equipment. Uzbekistan has been a strong supporter of the NDN. That has in turn raised their profile with international terrorist organizations, who may want to target Uzbekistan in retribution. So, it is very much in our interest to help Uzbekistan defend itself against such attacks.
We are certainly prepared to think about how we can do that. I myself have been engaged over the last year in the U.S. Congress to get a waiver so that we can provide non-lethal military assistance to Uzbekistan, even though they have not met a lot of the human rights conditions that would allow for more regular military assistance. That waiver has been approved. We are providing non-lethal military assistance now and will continue to do so, and the EDA process will be one way that we could help.
AP: There have been concerns expressed that perhaps in an informal fashion that somehow things might end in the wrong hands. I am wondering how much forward thinking there have been to make sure that has not happened because it is one thing to say we do not anticipate this to happen and another is … I mean the area of material not covered by the waiver would end up with Uzbek soldiers…
Blake: I wouldn’t worry about that. We have a very detailed and a very careful process of vetting all these things. We follow where these things are going. In some cases there has to be end-use monitoring.
Reuters: On Kazakhstan -- I wonder how closely you have been following the situation with Vladimir Kozlov, the opposition leader who goes on trial on Thursday. To what extent has Kazakhstan as an important partner, how has Kazakhstan progressed in judicial reform and human rights record?
Blake: First of all, this is an important issue that we talk about a lot with our friends in Kazakhstan. We think that Kazakhstan as a former chair of OSCE has a particular responsibility to show that it is making progress on these issues. We will be following very closely the trial of Mr. Kozlov and we hope it is going to be conducted in a fair, impartial, and open way, that we and others will be able to monitor the trial. We also hope that the trial itself will not undermine some of the progress that Kazakhstan is making to develop a multi-party democracy. We are pleased that for the first time, as a result of the most recent elections, there are now three parties in the Parliament. We want to try to encourage these parties to take an active role. Again, we do not want to see this trial undermine that progress.
AP: Do you think it will?
Blake: I don’t want to speculate. We will see. Obviously that is why we are going to monitor it closely.
Bloomberg: Talking about Kazakhstan….There was a riot and a few terrorist attacks, attempts I mean. Are you more concerned about political stability here? What is your impression?
Blake: I wouldn’t say we are concerned about political stability. I would say we share the concern of the local authorities about these attacks. It underlines again the importance of the counter-terrorism cooperation that we have with our friends in Kazakhstan. But it also underlines the importance of the authorities’ doing everything they can to respond to the needs and grievances of Kazakhstani citizens and not allowing these grievances to go unaddressed and perhaps give rise to terrorism or violent confrontation as opposed to peaceful means of resolving disputes. These are all part of our dialogue with our friends in the government and an important part of what we talk about all the time. We will have another session at the UN General Assembly in September. We strongly support what Kazakhstan is trying to achieve here. We are working with them. But we do believe they need to take further steps on things like religious freedom. You all have heard us talk about our concerns on the new religion law, which requires many groups now to re-register. Those kinds of things, if not properly handled, can give rise to greater grievances against the government and indirectly fuel the kinds of incidents that we have seen. It is important for the government to take steps not only on the counter-terrorism front but also on a wider democracy front.
Reuters: In these negotiations, how receptive are the authorities to these recommendations?
Blake: I think they are receptive. We always hear that they want to proceed in a measured but steady way to make progress on those things. We want to see that. Again, it is in their interests to do that. I think, candidly, many Kazakhstanis that we have spoken to have said that they understand that a lot of attacks that we have seen from groups like Jund al-Khalifa are not from international terrorist networks. These are due to grievances that are locally based, and therefore it underlines the importance of the government’s taking actions to address those grievances. Thank you for your time.