Cablegate: Sakhalin Governor Pusheds for More Cooperation with U.S.

VZCZCXRO8570
RR RUEHCHI RUEHDBU RUEHFK RUEHHM RUEHKSO RUEHLN RUEHNAG RUEHPB RUEHPOD
RUEHSK RUEHYG
DE RUEHVK #0109/01 3200021
ZNR UUUUU ZZH
R 160021Z NOV 09
FM AMCONSUL VLADIVOSTOK
TO RUEHC/SECSTATE WASHDC 1227
INFO RUEHXD/MOSCOW POLITICAL COLLECTIVE
RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION COLLECTIVE
RUCNCIS/CIS COLLECTIVE
RUEHVK/AMCONSUL VLADIVOSTOK 1332

UNCLAS SECTION 01 OF 02 VLADIVOSTOK 000109

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV EAIR EPET ETRD CMGT RS
SUBJECT: SAKHALIN GOVERNOR PUSHEDS FOR MORE COOPERATION WITH U.S.

VLADIVOSTO 00000109 001.2 OF 002

1. (SBU) Summary: Sakhalin Region Governor Khoroshavin would
like to strengthen business and cultural ties with the United
States. U.S. businesses such as Exxon Mobil employ hundreds in
Sakhalin, and many local students speak English, but Khoroshavin
said that U.S. foreign direct investment (FDI) was low compared
to neighboring countries. He added that Sakhalin Air was
searching for a partner to reestablish direct flights to the
U.S. that could facilitate stronger cultural and commercial
links. Khoroshavin said that he was glad there was a U.S.
Consular Agent in Yuzhno-Sakhalinsk, but repeated his request
that the U.S. establish a Consulate General there. He also said
that Sakhalin enjoyed good relations with Moscow, although the
financial crisis had decreased the amount of money Moscow gives
to Sakhalin. He also said Sakhalin was committed to protecting
the environment as new oil and gas sources come on line. End
Summary.

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Governor Says Ties With U.S. Are Strong...
------------------------------------------

2. (SBU) On September 28 Sakhalin Region Governor Aleksandr
Khoroshavin told us that he was enthusiastic about cooperation
with the U.S. and wanted it to continue and grow. He pointed
out that many U.S. companies such as Exxon Mobil were already
carrying out projects in the region, employing hundreds of
specialists in the process. In addition, Sakhalin hosted the
Russian-American Pacific Partnership for the fourth time, which
facilitated increased business cooperation. Khoroshavin also
pointed out that many students in Sakhalin study English. "The
United States is an important partner for Sakhalin," he said.

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...But Could Be Stronger
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3. (SBU) Khoroshavin, however, pushed for stronger business ties
between the U.S. and Sakhalin. He lamented that the U.S.
accounted for only USD 360 million in investment in Sakhalin
(USD 40-50 in FDI), while South Korean and Japan accounted for
over USD 5 billion (USD 150 million in FDI). He said the U.S.
could especially invest more in hydrocarbons, oil, fisheries,
and timber.

4. (SBU) In addition to business cooperation, Khoroshavin argued
for stronger cultural ties between the U.S. and Sakhalin. The
Russian city of Okha in northern Sakhalin used to have an active
relationship with Kenai, Alaska. "This should be reactivated,"
he said. Khoroshavin added that the youth of Sakhalin feel "at
home" in South Korea and Japan, and would like the U.S. as well
if more educational and travel opportunities were open to them.

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Governor Requests Establishment of a Consulate General
--------------------------------------------- ---------

5. (SBU) Khoroshavin said he was pleased to have a Consular
Agent in Sakhalin since 2007, but he said the needs of the
region, along with U.S. citizens and companies there would be
better served if a Consulate General was established in
Yuzhno-Sakhalinsk. He added that many companies, including
U.S.-based companies, spend a lot of money traveling to
Vladivostok for consular services.

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Direct Flights Between the U.S. and Sakhalin
--------------------------------------------

6. (SBU) Khoroshavin said he was in favor of reestablishing
direct flights between Sakhalin and the United States. Direct
flights to Anchorage, Alaska, were once possible, but the
company that offered them went bankrupt. Sakhalin Air offers
flights to China, Japan, and South Korea, but is still searching
for a partner to fly to the United States. Many Sakhalin
residents are affluent, he argued, and want to travel to the
United States.

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Sakhalin's Relations With Moscow
--------------------------------

7. (SBU) Khoroshavin said that Sakhalin Region enjoyed good
relations with Moscow. The financial crisis, however, had
reduced the amount of money Moscow gave to Sakhalin from USD 16
billion in 2008 to USD 3 billion in 2009.

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Environmental Protection
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VLADIVOSTO 00000109 002.2 OF 002

8. (SBU) Khoroshavin told us that Sakhalin was committed to
protecting the environment as new oil and gas fields come on
line. He said that Phase 2 of Sakhalin III, IV, and V have all
passed environmental inspections. He also invited us to meet
with him more often on the issue.
ARMBRUSTER

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