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turkmenistan  

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TURKMENISTAN


 

 

In-depth Business Intelligence

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 6,010 7,672 4,000 110
         
GNI per capita
 US $ 1,120 1,200 950 131
Ranking is given out of 208 nations - (data from the World Bank)

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REPUBLICAN REFERENCE

Area (sq.km) 
488,100 

Population 
4,863,169 

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

Capital 
Ashkhabad 

Currency 
Turkman Manat

President 
Saparmurat Niyazov


Update No: 295 - (26/07/05)

Turkmenistan is a North Korea-like dictatorship, run by former Communist Party chief Saparmurat Niyazov. The republic of 5 million has the world's fifth-largest natural gas reserves. Even if Turkmenistan continues intensive gas production, its reserves will last for a long time, as its proven reserves are estimated at 22.5 trillion cubic meters.
But the country has no observable public politics. Experts say the crunch will come when Niyazov dies, and rumours, not to be relied upon, persist that he may be unwell.

Turkmen ambition to diversify export markets for its gas
In September 2005, Ukraine and Turkmenistan might sign a 25-year contract on supplies of Turkmen natural gas to Ukraine, which will turn the Central Asian republic into Ukraine's main gas supplier. "I have handed over Ukrainian President Viktor Yushchenko's invitation to President Saparmurat Niyazov of Turkmenistan to visit our country and sign the contract on natural gas deliveries to Ukraine for the period of 25 years," Alexei Ivchenko, the board chairman of Naftogaz, Ukraine's national oil and gas company, told a news briefing at the end of June. 
Ivchenko said Niyazov had given his verbal agreement to visit Ukraine in September. This would be a bold move by Niyazov, who is normally too frightened of a domestic upheaval in his absence to go in for foreign travel. Recent events in Kyrgyzstan and Uzbekistan, one would have thought, would have made him even more nervous here. Still, the trip has yet to happen.
There are certainly big issues at stake. "Ukraine is drafting the contract," said Ivchenko. "We expect Turkmenistan to supply 60 billion cubic meters of natural gas (a year) to Ukraine." Ivchenko did not disclose how much the contract was worth, saying it was a commercial secret. 
He said the contract might come into force in 2007. 
Turkmenistan supplies natural gas to Ukraine via Russia and satisfies about 50% of the country's demand for the fuel. 
Russia and Turkmenistan have signed a 25-year agreement on cooperation in the natural gas sector already, and Gazexport, an affiliate of the Russian gas giant Gazprom, currently buys Turkmen gas at US$44 per a thousand cubic meters. In 2007, Turkmenistan will start selling gas to Russia at world prices, or the two countries could switch to a payment scheme used in contracts with Western partners, which is linked to the "oil products basket." 
Turkmenistan has been energetically developing its natural gas exports. It has signed a contract on gas exports to Iran for the period till 2018. However, the republic is not able to deliver more than 13 billion cubic meters of natural gas a year to the country for technological reasons. At the same time, Turkmenistan delivers 30-40 billion cubic meters, at US$42 per 1,000 cubic meters, to Ukraine every year. Turkmen officials have repeated their country intends to increase gas exports to 100 billion cubic meters a year overall by 2010, with output at 120 billion cubic meters. 
Even if Turkmenistan continues intensive gas production, its reserves will last for a long time, as its proven reserves are estimated at 22.5 trillion cubic meters.

Niyazov: Strengthening ties with European countries a priority
Niyazov is clearly trying to end the isolation of his regime in economic although not in political and religious affairs, something he had previously seemed almost to cherish. For example he fully backed a conference, "International Commercial Arbitration," that started in Ashgabat on June 3rd. It was organised by the Turkmen government, and the German and British embassies, in association with the German Association of Technical Cooperation.
The participants comprised representatives of the judiciary, the general prosecutor's office, the ministry of trade and consumer cooperation, other state organisations of Turkmenistan as well as international experts, including Robert Briner, the president of international arbitration court under the international chamber of commerce and Yan Paulson, the president of the London court of international arbitration, the professor of law of the University of Breman association for technical cooperation (GTZ) Rolf Knipper. 
A steady growth in trade turnover between Turkmenistan and the EU countries interested in purchasing world-standard oil products and high quality textile products is evidence of the significant boost in the Turkmen-European relationship. Turkmenistan pays a great deal of attention to legal matters in trade relations and investments in the process of integration into the world economy. Niyazov expressed interest to start joint work on training highly qualified national specialists for the country's judicial system. 
The conference participants discussed the arbitration court international practice in Turkmenistan. At the conference, the centre of discussion was related to issues like the role and importance of arbitration disputes, ensuring their lawfulness in the sphere of international trade-economic relations especially in the sphere of trade and attraction of investments. Niyazov informed the international experts on the major directions of Turkmenistan's domestic and foreign policies, noting the priority of the task on strengthening mutually beneficial cooperation with the European countries. At the same time, he underlined that these goals have to serve the long-term interest of his country.
On accepting this proposal, Briner said a special programme could be drawn up for training of Turkmen law specialists on a broad mutually advantageous basis. During the talks, both discussed prospects of bilateral partnership. Knipper who has been consulting local specialists for over 12 years expressed his hope that a regional centre for solving arbitration issues could be set up in Ashgabat. In an interview with the state news agency, the participants in the conference noted that during the meeting both sides discussed several interesting and specific proposals that can be implemented in future. Ashgabat is the ideal place for holding such forums, for this ancient city is a most interesting symbol of changes happening on Turkmen soil, but as an arbitration centre it obviously falls short of such renowned cities as Zurich, Stockholm or London. For example, the international corruption watchdog - Transparency International - currently ranks Turkmenistan as 121 in the world for corruption, and our sister site, worldaudit.org, ranks them as 101 (out of 150) for democracy.

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AGRICULTURE

Turkmen grain growers harvest 2m tonnes of wheat 

The statistics office of the republic of Turkmenistan recently announced that state granaries received two million tonnes of grain harvested this season, Turkmenistan.ru reported. 
According to local experts, if the pace of daily harvesting continues then grain growers of Turkmenistan will be able to fulfil the government order of 3,100m tonnes of grain in the first quarter of July. It is necessary to recall that the country achieved grain independence in the second half of the 90s of the last century. In the Soviet period, Turkmenistan barely harvested 70,000 tonnes of grain. 

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ENERGY

Turkmen Naip plant reaches planned production capacity

The Naip liquefied gas production plant constructed by the Canadian company Termo Design Engineering Ltd in western Turkmenistan reached its planned production capacity ahead of schedule, Turkmenistan.ru reported recently, citing the Turkmen Ministry of Oil and Gas Industry and Mineral Resources. 
Using raw materials from the Naip group of fields, this plant has produced 60,000 tonnes of liquefied gas since the beginning of this year, an increment of 41% on the same period of last year. According to experts, the plant's annual capacity is some 130,000 tonnes of liquefied gas, a 17,500 tonnes increase on the plant's planned production capacity. The head in charge of the plant said that such high results would be possible due to the improved cooling system and technological process of production. The Naip plant on domestic fuel production is a super modern industrial complex consisting of 3 automatic lines bound by the united operating system.

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FOREIGN ECONOMIC COOPERATION

Niyazov invites Ukrainian firms to join new projects

Turkmen president, Saparmurat Niyazov, announced on June 24th that Ukrainian road construction workers may become general contractors for a modern highway linking Ashgabat with Mary and some parts of the Ashgabat-Turkmenbashi highway at a later stage on condition that the cost of two kilometres of a world-standard dual highway would not exceed US$500,000. Niyazov's comments came prior to the signing ceremony of a new agreement with Ukraine on the purchase of Turkmen natural gas for the second part of the year and for 2006. He also invited Ukrainian partners to participate in the reconstruction of the Seidi oil refinery and modernisation of a chemical fertilisers plant in Mary.
Meanwhile, a Ukrainian delegation arrived in Ashgabat for debt settlement talks. A delegation of the National joint-stock company Neftegaz Ukrainy led by board Chairman Alexei Ivchenko arrived in Ashgabat on June 23rd as instructed by the president and government of Ukraine, Turkmenistan.ru reported, citing the press service of the Turkmen Foreign Ministry.
Dwelling on the prospects of Naftogaz Ukrainy company involvement in the development of the Turkmen shelf of the Caspian Sea, Niyazov stressed that development of onshore hydrocarbon deposits remain a choice of the national entities of Turkmenistan.
According to the president, this approach was adopted due to the lack of facilities for transportation of hydrocarbons to the world market. In this context, Niyazov called on partners to intensify work on drafting a project of construction of the Caspian gas pipeline Turkmenistan-Kazakstan-Russia-Ukraine.
According to the foreign ministry, the delegation of Ukraine will continue talks with the Turkmen government on the issue of repayment by the Ukrainian side of the debt for Turkmen gas supplies.

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TELECOMMINCATIONS

MTS picks up BCTI shares for US$28m 

Mobile TeleSystems OJSC, the largest mobile phone operator in Russia and the CIS, announced on June 27 that it had acquired a 51 per cent stake in Barash Communications Technologies Inc (BCTI), which has a subsidiary operating in Turkmenistan, Turkmenistan.ru reported. 
In a statement, the company said it purchased the 51 per cent stake from the company's founders for US$28.05m Euro. MTS is also interested in purchasing the remaining 49 per cent in the company within the next eight months. The price of the remaining stake will depend on the operating and financial performance of the company but will not exceed 26.95m Euro. According to MTS' president and chief executive, the entry of MTS in the Turkmen market is an important step in implementing the company's strategy of geographical expansion into neighbouring countries with high growth potential for the mobile industry. Experts noted that MTS' purchase in Turkmenistan would be the last significant acquisition by the Russian mobile operators in the CIS markets. Alexei Yakovotski from UFG said last week that the MTS' deal in Turkmenistan is quite profitable for the Russian company as the financial standing of the republic is "very attractive and it has great potential."

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