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Annexed by Russia between 1865 and 1885, Turkmenistan became a Soviet republic in 1925. It achieved its independence upon the dissolution of the USSR in 1991. President NIYAZOV retains absolute control over the country and opposition is not tolerated. Extensive hydrocarbon/natural gas reserves could prove a boon to this underdeveloped country if extraction and delivery projects can be worked out.
Update No: 264 - (01/01/03)
The Turkmen republic is becoming an increasingly bizarre place. The long-time dictator there, Saparmurat Niyazov, is clearly losing his marbles.
When the people of Turkmenistan buy bread these days, they must no longer ask for chorek, the Turkmen word for it, but for Gurbansoltan-edzhe, the name of his long-dead mother. Niyazov, the increasingly eccentric leader of his country, is taking his fondness for his matriarch to extremes.
The Caligula of Central Asia
It is not only bread that bears her name, but so do countless towns, villages, street, public buildings and factories - and even the month once known as April. She has been virtually deified in a collection of the president's ideological ramblings called the Rukhname, which is claimed by some suppliers to render the Bible and Koran obsolete.
Gurbansoltan-edzhe has been named the Mother of Justice, and an enormous statue of her dressed in flowing robes stands outside the supreme court in Askhkabad, the capital. She has also inspired a statue to commemorate the victims of an earthquake that almost razed the city in 1948. It depicts her clutching a baby - representing the orphaned future president and the only one of her three children to survive the cataclysm.
Her worship is the latest extension of an overweening cult of personality of Niyazov, or Turkmenbashi, the Great Father of all the Turkmens, as he declared himself on independence. The usual paraphernalia of such a cult abound, his portraits everywhere, public works bearing his name.
But here it takes bizarre forms. He has changed the names of the days of the week and months of the year. He has reclassified the ages of man so that adolescence begins at 25 and old age at 85.
Plans are afoot to declare that a year has eight months - each of 45 days. "Whether that means that people will only receive their salary eight months a year, who knows. But it will play havoc with international airline timetables," a Turkish businessman in Ashkabad dryly commented.
Niyazov had been discreetly asked by foreign diplomats to explain the purpose of the cult. His justification is that Turkmenistan had five main tribes before communism in its huge desert land and that communism and the cult of Stalin forcibly unified them. A substitute had to be found if they were to stay together. The cult of his own personality provides this at a cheaper cost than communism.
This is an ingenious and not altogether false idea. But other Central Asian republics, say Kazakstan, manage without it and yet are huge, with a history of tribalism.
An intriguing aspect of the recent Central Asian Cooperation Group, meeting was that while the presidents of Kazakstan, Kyrgyzstan and Uzbekistan all attended in person, greeted by President Imamali Rakhmonov of Tajikistan, the Turkmen president, Saparmurat Niyazov, was conspicuous by his absence. He seems to fear machinations behind his back so much that he cannot vacate his own country for a day, because it has become routine that he does not show up at such gatherings.
An opposition is forming against him, wedded to democracy. Yet they are still pitifully weak and mostly out of the country. For political opponents are locked up or deported and their families then harassed.
"We have an institute of human rights, but not rights," said a third-generation member of the Russian minority, who wants to move his family back to their former homeland. "We have a Democracy Party, but no democracy. It is forbidden to mention those who disappear, but it happens. There are many political prisoners."
The regime looks very secure. Yet so did the USSR. But Niyazov is no Turkmen Gorbachev. He is being seen as vital in offering stability for a US$2bn, 2,900-mile pipeline project for gas that runs though Afghanistan, which is seen as possible and highly desirable to many parties, if uncompelling to international financiers
Economy in dire shape
All this is having no very positive effect on the performance of the economy. In his usual bombastic style Niyazov told a recent session of the State Council that GDP rose by 22.5% in January-October 2002, the first nine months of the year: "This is the world's best index. All industries are on the rise. The goods turnover is constantly increasing. The surplus in foreign trade turnover exceeds US$575m," Niyazov said.
He added with pride that the total cost of all sites currently under construction in Turkmenistan amounts to US$12bn. Given that this is equivalent to GDP per annum, a certain exaggeration is likely here. But plenty has been spent on his grandiose building projects all right.
At the same time as this miracle is occurring in the economy at large, the largest industry in the basic agrarian sector, cotton, is faring very badly. The harvest in 2002 has amounted to only 474,000 tonnes of raw cotton, falling short of two million tonnes of the planned output. Niyazov has been chastising the Ministry of Agriculture and regional authorities he holds responsible. A personnel reshuffle is on the cards. But, true to form in communist countries, the authorities blamed the poor crop on poor weather conditions. T.S. Elliot has his Magi in the desert holding up their hands and "praying for rain." In Turkmenistan the leaders "pray for no rain" on which to blame their troubles.
Actually Niyazov made a revealing statement, according to Interfax. The Turkmen leader was quoted as saying "Farm workers had to deal with their problems without appropriate assistance or support. In several regions, the effort and means, including bank loans, were wasted." Niyazov added, "There are no real masters of the land who can act and attain results without instructions and commands from the top." This is letting the cat out of the bag, as it were.
Reform of banking practices
The mindset of the president remains irredeemably 'statist' for all that. He has resolved that the foreign currency assets of all banks operating in the country should be concentrated in hands of the Central Bank of Turkmenistan (CBT).
The reasoning behind the new policy is telling. Niyazov announced his decision at an expanded government session on working to improve monetary turnover and the work of national banks. "In part the activities of banks go against common state interests," he said. "Almost all have their own accounts in foreign banks, despite the earlier resolution. This means that significant financial capacity is taken out of turnover and does not bring the state any dividends," Niyazov stressed. The state is to be not just the ultimate subject of all economic activity, but the ultimate object of it as well.
Ukraine to restructure US$282m debt to Turkmenistan
The Ukrainian Finance Ministry expected an agreement, that was due to be signed at the end of November in Turkmenistan, to restructure Ukraine's US$282m debt to that country. At the talks with the Paris Club on the debt restructuring, Ukraine underscored a special status of liabilities to Turkmenistan since they had been restructured already, reported New Europe.
At the same time, Kiev said it would match the conditions of restructuring the debt to Turkmenistan with the terms of other creditors. Turkmen representatives said they would not restructure the debt on the Paris Club's conditions and would insist on a more lucrative deal, especially on offsetting the Ukrainian debt within three and a half years from 2001 under a Libor+1-1.5 per cent credit rate, compared with the Libor+0.5 per cent for the Paris Club countries. The restructuring of Ukraine's debt for Turkmenistan was stipulated by an inter-governmental agreement dated November 5th, 1994. According to the accord, Ukraine's debt totalled US$723.44m, including a US$51.54m fine. The debt was reimbursed by even quarterly portions worth US$35.21m. The interest rate on its servicing was set once a year at the level of an annual dollar deposit rate Libor+1 per cent, fixed annually for January 1st. The last payment was due on December 25th 2001, however, in January 2000 Ukraine suspended servicing both this and other debts to the sovereign creditors, who are the Paris Club members.
Turkmenistan seeks foreign capital, investors remain wary
Turkmen officials have floated ambitious plans for over US$45bn in investments in the country's oil and gas sector. To realize this goal, Turkmenistan faces a considerable challenge in attracting foreign investment. A recent conference in Ashgabat was designed to help lure investors, but many corporations remain hesitant to commit substantial amounts of capital to the Central Asian nation, reported Daan van der Schriek for Eurasianet.
Participants at the May roundtable conference heard Turkmen oil and gas officials outline a proposal for a US$45.7bn investment programme that would cover 2002-10. As much as US$34.4bn of the overall total would need to come from foreign investors. Some industry experts wondered whether the Turkmen investment goal was realistic, as, according to the European Bank for Reconstruction and Development, foreign direct investment in Turkmenistan was only US$89m in 1999 and US$100m in 2000. Representatives from Turkmenneftegaz at the roundtable, moreover, were unable to come up with specific details about investment needs when questioned by representatives of foreign companies.
The lack of answers, however, didn't deter Turkmen officials from aggressively courting investors at the conference, held under the auspices of the country's Ministry of Oil and Gas. Participants focused on technological requirements, industry priorities and scope of investments. The conference also examined prospects for developing the equipment and service markets.
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