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turkmenistan

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TURKMENISTAN


 

REPUBLICAN REFERENCE

Area (sq.km) 
488,100 

Population 
4,603,244 

Principal 
ethnic groups 
Turkmens 77%
Uzbeks 9.2%
Russians 6.7%

Capital 
Ashkhabad 

Currency 
Turkman Manat

President 
Saparmurat Niyazov

  

Background:
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: 270 - (26/06/03)

The Afghan war
The Turkmens are the most unfortunate of the Central Asians, with the possible exception of the Afghans, who are in a neglected condition. The Afghan war was a turning point for the rest of Central Asia, turning all its states into US allies overnight.
The one to remain comparatively aloof was the Turkmen republic with its well-honed dictatorship under Turkmenbashi, President Saparmurat Niyazov, who flirted with the Taleban. Niyazov is rightly afraid that letting the Americans in could spell his end.
An attempt on his life was made on November 25th last year and various foreigners were held to blame, along with local would-be assassins. There is no shortage of resentment and bile against Niyazov, whose cult of personality is gargantuan and must grate on many a Turkmen.

Caligula of Central Asia
There are distinct signs that the dictator is losing his marbles. He has changed the calendar into eight months, with one month called after himself and another after his mother. The name of 'bread' is now that of his mother, who saved him from dying in an earthquake in 1948, a questionable service to humanity.
Niyazov has issued his own work of religious revelation, which he ranks alongside the Bible and the Koran. It lacks their literary and spiritual qualities, however, and may yet induce his downfall, as the more devout Moslems must be outraged.
The barminess of the Turkmen autocrat extends to his conduct of foreign policy and business affairs. He has alienated the Western energy companies and landed himself and his country in a total dependence on Russia, reverting to the days of the USSR.

Russian lock on Turkmen gas
At a time when nobody was looking at the Caspian Sea and all eyes were on the Gulf, the Russians made a mega-deal with Turkmenistan that gives them a lock effectively on that country's main asset by far, the third largest gas reserves in the world (after Russia and Iran). 
Actually, this could be contested, Iraq itself, Saudi Arabia, Algeria and Qatar all have huge reserves. It is questionable who exactly is third or fourth or fifth. But one thing is for sure; Russia has easily the largest gas resources. So why does it need Turkmenistan's too; and why does Askhabad let itself be subjected to a new colonial status for its main exporter?
To take the last question first, President Niyazov is a bungler of no mean proportions. He has ruined chances of doing a deal with Westerners, giving his country a trabs-Caspian alternative route to that of Russia. The Western majors are totally fed up with him, the megalomaniac delusions of the absurd personality cult in which he basks, his intemperate and perversely wayward negotiating style and his obvious lack of any sense of humour or honesty. A totally unreliable character; and that is a fatal flaw in a potential partner.
So Turkmenistan is left to its own devices and prior plight, dependence on Russia. To say that Moscow has driven a hard bargain is a colossal understatement of the situation. Gazprom has engineered a way of getting Turkmen gas for next to nothing, while selling it on at a huge mark-up to world markets, notably in Europe. And this is to last for twenty-five years, at least if Niyazov remains in place. Any successor would doubtless want to repudiate the deal. This gives the Russians a new vested interest in Niyazov staying put. A deal that veritably stinks.
The Russians are showing that they can pull their weight around still in their backyard, even while the US tries to muscle in Central Asia too, as well as the Middle East. The Turkmens used to export 90 billion cubic metres annually. Their isolation from even Russia in the last ten years has seen production standards fall, while surveying and prospecting operations have declined. Production in 2002 was only 54 billion cu. m; while in 2003 it is expected to be 68 billion, with still a substantial shortfall. It will be in Gazprom's interest for it to help raise production in the far-flung republic. For Turkmen exports of gas will rise to 80 billion annually by 2009 and at a price of just US$44 per 1,000 cu. m, only US$22 of which will be in cash, the rest in Russian goods unsaleable on markets elsewhere. Russian gas sells domestically at US$21 per 1,000 cu. m; but internationally at US$90-120 per 1,000 cu. m.
The advantages for Russia are mighty and manifold. An increasing proportion of Gazprom's exports of gas will be from Turkmenistan at the huge mark-up, a growing proportion of Russia's domestic need for gas will be met by Turkmen output. Russia will be able to export more of its own gas, while not needing to exploit high-cost Arctic and Siberian deposits just yet. Meanwhile, the Europeans and other consumers will have an incentive to invest in, or to lend to, pipeline projects guaranteeing continuity of supply.
The losers are the Turkmens and also the Afghans, who were negotiating to take some gas across their territory to Pakistan's Arabian Sea coast. The absence of any settled security along any Afghan route always made it a doubtful proposition.
The Russian route is only too secure, the security that of Russian self - interest. There can be little incentive for the Russians to change the deal. In 2007 there is to be in principle a recalculation of prices, but locked in as they will be, there is little room-for-manoeuvre for the Turkmen. For twenty-five years they will be selling the Russians two billion cu. m of gas in all. 80 billion annually at knock-down rates. One-day Niyazov's personality cult will vanish, and he will be seen for what he is, a vain and silly bungler who sold his country's one main asset for a song.

Isolation from the rest of the region
Niyazov seldom travels abroad and does not trust any of his neighbours. Consequently, Turkmenistan is not a member of the Shanghai Cooperation Pact or other regional groupings. Isolation suits Niyazov.
It is difficult to see how he is going to be removed unless by another attempt at assassination. But naturally his security is tighter than ever. The poor Turkmen are in for a long haul.

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AGRICULTURE

100 John Deere cotton harvesters to arrive in Turkmenistan

Turkmenistan is going to purchase a hundred cotton-harvesting combines from US agricultural machinery company John Deere for US$21.865m, according to a decree signed by president, Saparmurad Niyazov, Interfax News Agency reported.
The machines and associated spare parts will arrive in Turkmenistan before August 1st, before cotton harvesting begins. The Turkmen central bank will allocate the money for the purchase out of the country's currency reserves. The sector association Turkmenobakhyzmat (Turkmen Agricultural Machinery) and the concern Turkmenpagta (Turkmen Cotton) will be paying the money back in mantas, the national currency, over the coming five years.

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ENERGY

Ashgabat signs electricity deal with Sanir, Tavanir

Turkmenistan's Energy and Industry Ministry has finalised an agreement with Samir and Tavanir, two Iran-based utilities, to export US$12.8m worth of electricity to Iran effective from June 1st, Interfax News agency reported. 
Under the agreement, Turkmenistan will export 640m kilowatt-hours of electricity for US$0.02 per one kilowatt-hour. Fifty per cent of the sum will be repaid in monthly cash instalments and the rest in supplies of spare parts and materials for energy and industrial companies. The Turkmen government has spent US$56m to develop three gas turbines with an aggregate capacity of 126.4 megawatts at the Balkanabad electric power plant to build up energy exports to the Islamic state.

Turkmenistan, Gazprom to develop gas pipeline by 2007

Turkmenistan and Russia gas monopoly, Gazprom, are planning to build a new Caspian gas pipeline by 2007. The pipeline will have an annual capacity of 30bn cu m of gas, Interfax News Agency quoted a source in the Turkmeneftegaz trade corporation as saying. The source said the issue was discussed during negotiations between Gazprom and the Turkmen government.
The negotiations focused on the implementation of an intergovernmental agreement for a period of 25 years that Turkmenistan and Russia signed on April 10th. The future pipeline, with a diameter of 1,420 millimetres, will be 1,745 kilometres will run through Turkmenistan, while 1,140 kilometres will go through Kazakstan. The pipeline will start from the Deryalyk compressor station, go through the Bekdash compressor station in northwest Turkmenistan and reach the Alexandrov Gai compressor station in Russia across Kazakstan.

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FINANCIAL NEWS

Turkmenistan spends US$470m to boost economy

Turkmenistan spent 2.541 billion mantas (US$470m) to develop its economy in the first three months of 2003, representing a 21% jump, the BBC reported. Nearly three quarters of these investments were introduced to develop the production sector. The National Institute of Statistics and Information said in its latest report, that the growth rate of investments sustained the highest levels in ministries and departments of fuel, energy and chemical output (173%), and in the agro-industrial sector (165%).
Measures introduced to implement the investment policy by ministries and departments have helped kick-start a number of key facilities, like the Nayyp Liquefied gas producing plant (north-eastern Turkmenistan) with a processing capacity of nine billion cubic metres per year, nine gas boreholes in Mary Region (southern Turkmenistan), a 6.9 kilometre pipeline and a 6.3 kilometre collecting line in Southern Gamyslyia deposit.

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