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Central Asia: German Economics Minister Stresses Business Interests

Prague, 26 August 1996 (RFE/RL) -- The current trip of German Economics Minister Guenter Rexrodt to Central Asia is a measure of how German business interest in the region has grown steadily in recent years.

Rexrodt, who arrived in the Turkmen capital Ashgabad two days ago, flew on to Uzebekistan today to begin a two-day visit to Tashkent. On Thursday he is due to continue to the Kyrgyz capital Bishkek, before traveling Friday morning to the Kazah capital Almaty and concluding his trip to the region Saturday.

Before leaving Bonn, the German Economics Minister said the "main purpose of the journey is to offer German assistance" in developing Central Asia's economic potential. The German official, who is holding meetings at the Presidential and Prime Minister level, is travelling with a delegation of more than 40 German businessmen representing a broad spectrum of entrepreneurial and banking interests.

German Economics Ministery spokesperson Regina Wierig told RFE/RL that the German interests focuses on opportunities for German businesses to participate in developing the infrastructure of the region, including supplying machines and materials for building its energy, telecommunications, transportation, and service sectors.

The German business leaders also want to talk with Central Asian leaders about how to limit risks facing foreign investments in the region. The delegation addressed that matter as one of their first items of business upon arriving in Ashgabad. The talks were in preparation for a signing of a protoctol safeguarding German investment when Turkmen President Saparmurad Niyazov visits Bonn, starting from tomorrow.

Correspondents say that German banks interested in providing credit for business projects in Central Asia are currently discouraged by the lack of institutional guarantees to ensure their investments will not be lost. The German bankers want state guarantees from the Ashgabad and other capitals that loans will be paid back, and point to the volatility of doing business in the region as justification.

The German daily "Frankfurter Allgemeine Zeitung" writes that the insistence on state guarantees has been increased by recent mishaps like that suffered by German importers of Turkmen and Uzbek cotton. The importers were reported to have suffered because state cotton producters did not observe standards of cotton processing for the Western market.

Rexrodt is due to sign a protocol on protecting foreign investments in Bishkek with Kyrgyz President Askar Akayev on Thursday.

Despite the difficulties of safeguarding foreign investment in Central Asia, German interest in the market is growing and is likely to intensify in the future. A statement by the Economics Ministry in advance of Rexrodt's trip calls his visit particularly timely now because geopolitical tensions in the region have eased in recent months.

The statement says Washington has recently reduced its objections to oil and gas pipelines bringing Central Asian energy across Iran, and Moscow also seems to be interested in stressing cooperation with Central Asian states. The German Ministry also says there are signs that Central Asia is undergoing a reorientation as states in the region seek a stronger attachment to Europe and not dependence on the U.S. or Russia.

Rexrodt is reported to have pushed for greater orientation toward Europe during his first stop in Ashgabat. The German economics official told Turkmen officials Germany is a partner without geopolitical interests, and thus an ideal business choice.

Germany's biggest trading partner in Central Asia is Uzbekistan, with a volume of $513 million in 1996. According to the Geman Economics Ministry that volume is up 14 percent compared to 1995.

The second largest trading partner for Germany is Kazakhstan. Trading volume between the two countries reached $307 million in 1996, representing a slight increase of 2.5 percent compared to the previous year.

Turkmenistan comes in third, with its volume of trade with Germany reaching $94 million in 1996. The German Economics Minisry says that trade with Kyrgyzstan has developed favorably but at a lower level, with trade volume reaching $64 million last year.