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Books on Turkmenistan
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
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Update No: 310 - (30/10/06)
Ingratiating a despot
Turkmen government coffers are awash with cash. The regime is benefiting from a
massive inflow of energy revenues. This makes it a tempting prospect for 'movers
and shakers' from the West.
Businessmen have to be practical. They cannot always like the people they do
business with. They can console themselves with the thought that in the long run
the more contacts that a dictatorial regime has with the outer world the better
for its people (if they gave a damn, that is).
But a price has to be paid - the need to turn a resolute blind eye to abuses of
human rights and the corresponding need to ingratiate the dictator with
flattery. In the case of Turkmen President Saparmurat Niyazov this is easily
done. One just needs to praise his profound tome, the Rukhmana, which he places
on the same spiritual plane as the Bible and the Koran. Actually, if one is
going to go in for flattery it is as well to heed the advice of Benjamin
Disraeli, the Jewish-born UK Prime Minister, a master of the art, who remarked
on the success of his relationship with Queen Victoria: "when it comes to
royalty, lay it on with a trowel." He did, praising a slim dairy of hers to
the skies, saying that it placed her "at the very head of the literary
profession."
Niyazov is royalty in all but name. A very different figure than Disraeli,
Herbert J. Markley, head of the John Deere tractor firm's agricultural division,
promised Niyazov in late September that a copy of the Rukhnama would occupy a
prominent place at the John Deere company museum. As the government newspaper,
Neutralnii Turkmenistan, reported, John Deere has once again become the
beneficiary of a multi-million dollar deal for the supply of agricultural
machinery.
At the meeting between Niyazov and Markley, a contract was signed extending a
long-established business partnership between the parties and completing a deal
to supply Turkmenistan with 150 wheat combine harvesters, worth US$23 million,
and spare parts to the value of US$4 million. During their encounter, Niyazov
also took the opportunity to thank John Deere for its operations on the Turkmen
market, which have been carrying on since 1993, while they both expressed mutual
confidence that the collaboration would stand to continue for the foreseeable
future.
In September 2003, President of John Deere Worldwide Agriculture, David Everett,
visited Turkmenistan, at which time his company sealed a deal to supply 100
wheat combine harvesters and 50 cotton-combines, to the cost of US$27 million.
As NewsCentralAsia reported at the time: "The John Deere-Turkmen
partnership dates back to 1993 when Turkmenistan purchased harvester combines
from John Deere. After extensive testing in local conditions, John Deere
machinery was found to be suitable for Turkmenistan and on 24 April 1998, during
the visit of President Niyazov to the United States, the government of
Turkmenistan signed an agreement with John Deere for the supply, repair,
maintenance and user/maintainer training of agricultural machinery. Over 10
years of cooperation, Turkmenistan has purchased 694 tractors to a total value
of US$77.5 million, 258 wheat-combines worth US$41.3 million, and 148
cotton-combines for a total sum of US$27.7 million. In addition, John Deere has
supplied thousands of smaller machines and equipment. In all, John Deere has
supplied more than 3,500 machinery units to Turkmenistan. The total value of
these items exceeds US$170 million. John Deere maintains permanent repair and
maintenance facilities in Turkmenistan."
During the meeting, Markley also stated that he was ready to organise training
sessions for Turkmen agricultural workers at John Deere's own factories, but not
before noting that they were already highly skilled. Before concluding their
encounter, Markley thanked Niyazov and congratulated him on the 15th anniversary
of his country's independence. He continued by remarking how impressed he was by
Ashgabat and its architecture, noting that it clearly demonstrated the
achievements of the era of independence. Finally, Markley impressed on Niyazov
how he had heard wonderful things about the Rukhnama and wished to read it, and
he also expressed a desire to visit the mosque in Kipchak and visit the graves
of Niyazov's parents.
This kind of scene is familiar for anyone who has observed the ritual flattery
that large-scale foreign investors must indulge in when meeting Niyazov; but the
degree of unctuousness achieved here by Markley is remarkable. For all the
relative merits of opening up western trade to Turkmenistan, it is hard to
imagine how many foreign companies would be prepared to gratify Niyazov's ego
and his dubious apparatus of power while risking their reputations for the sake
of a lucrative contract.
The state of the gas world
Market forces always prevail in the end. World-wide energy shortages and the
emergence of China and India as economic giants has tilted things the way of the
Central Asian energy producers, notably Turkmenistan.
Even as perverse a figure as Saparmurat Niyazov, the dismal dictator of the
country, could hardly fail to benefit, sitting on the world's fifth largest gas
reserves. He has been able to do a good deal with the Russians at last.
But they have not necessarily been the long-term losers.
Gazprom concedes in Asia; and wins in Europe?
Under its August 5th agreement with the Turkmen government, the Russian gas
monopoly, Gazprom, decided to buy Turkmen gas at a price of US$100 per a
thousand cubic meters in 2007-2009, up 50% on current prices for its purchases
of Turkmen gas. It will purchase 12 billion cubic metres in 2006 and 50 billion
cubic metres every year in 2007-2009. In other words, it will pay US$6 billion
more than it was going to, but will control all Central Asian gas exports to
Europe as a result.
The media and industry press have not failed to notice the new price, or its
implications. Only in July Gazprom flatly refused to pay it, and even walked out
of the talks, but now has changed its tune. Apparently, a serious change in the
world gas market compelled the Russian monopolist to give in.
China counts
There are several factors influencing the major players in the world market
today, not least the Chinese option.
China has become much more active in the Caspian region. The efforts of the
Chinese companies to gain a foothold in the energy industries of Turkmenistan,
Kazakstan and Uzbekistan are starting to threaten Gazprom's domination in
Central Asia, which rests on its monopoly ownership of the Europe-bound gas
pipelines.
The Chinese have crucially offered Ashgabat to build an eastward-bound export
pipeline with a capacity of 30 billion cubic metres of gas per year. They are
going to sign a production-sharing agreement for the right bank of the Amu Darya
River, which is going to become a new gas province. They have also stepped up
their involvement in developing gas resources in Uzbekistan and Kazakstan with a
view to transporting gas to China's western provinces.
These steps have given Central Asian countries more room for manoeuvre. Turkmen
President Saparmurat Niyazov has spoken more than once about the strategic
importance of the Russian direction of the Turkmen gas exports. He has made the
point that the construction of new pipelines, including the one going to China,
which he promised to commission by 2009, will not prejudice cooperation with
Moscow. Nevertheless, Ashgabat has definitely gained more bargaining chips in
talking with Gazprom.
Europe beckons too
Apart from eastern-bound exports, the discussion of a pipeline under the
Caspian Sea to supply Europe with gas bypassing Russian routes has become
markedly more active. The Kommersant newspaper reported on September 6th that
Polish Prime Minister Jaroslaw Kaczynski is going to visit Washington with the
proposal on a joint construction of a trans-Caspian pipeline to supply Europe
with gas bypassing Russia. The Polish newspaper Rzeczpospolita wrote that in
order to receive US$5 billion for this project, the Polish authorities are ready
to sign with the U.S. a lease for the construction of a missile base to become
part of the US ABM system.
Although in Kazakstan the subject is avidly discussed at government level, only
Turkmenistan currently has the resources for this gas project. Apparently,
Gazprom will now pay to freeze it as well. Niyazov emphasized: "We'll
primarily supply gas to Russia. Don't worry that Turkmenistan will walk away
with its gas. We are not ready to discuss the trans-Caspian pipeline,"
(which is not to say that it won't actively be discussed. One version was agreed
and signed up in 1999 but failed to materialise).
Higher Turkmen gas prices will not be a big problem for Russia. Europe pays
US$230-US$250 for a thousand cubic metres of gas, and Gazprom will have its
share of the profit anyway. Moreover, having contracted almost all of
Turkmenistan's export resources until 2009, it has actually protected itself
against competition in Central Asian gas supplies. A panic demand for gas in
Europe, generated by the recent apprehensions about its near shortage, is bound
to send gas prices even higher. Today, Europe's major energy concerns are lining
up to extend long-term contracts with Gazprom, but it is not likely to meet this
demand without Central Asian gas. In the last few years, Gazprom has launched
its own gas industry and blocked a speedy growth of its independent production
in Russia. It is now compelled to negotiate with Ashgabat for this reason.
Gazprom in charge; but problems ahead
New prices in Turkmen-Russian gas cooperation are the first sign of change
on the post-Soviet gas market. For the time being, Gazprom has been quite prompt
and flexible.
The market situation has helped as well. But the competition for resources keeps
growing, and control costs more and more.
Moreover, stepping up its efforts in the foreign market, Gazprom is neglecting
its own production. In January-July 2006 gas production went up by 2.5% over the
relevant period in 2005, whereas gas exports went up by 24.9%.
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AGRICULTURE
John Deere combine harvesters bought for 3.843m Euro
Turkmenistan is buying 150 John Deere-9560 combine harvesters for 18 million
Euro and spare parts costing 3.843 million Euro, a spokesman for Turkmenistan's
president said, Interfax News Agency reported.
The deal was signed during a meeting between Turkmen President, Saparmurad
Niyazov, and John Deere representatives in Ashgabat. The combine harvesters must
be delivered by April 30th 2007.
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CONSTRUCTION
Turkish company wins 42m Turkmen contract
A Turkish company, ABKA Construction and Foreign Trade Co. Ltd, won an
international tender in Turkmenistan to construct a fishery complex worth 42
million Euro in the country, reported Turkmenistan.ru.
The winner of the tender was announced by the State Committee for Fisheries on
October 2nd. Turkmen President, Saparmurat Niyazov, also approved the decision
of the tender commission and the conclusion of the expert commission. The
Istanbul-based company is to design and construct a complex for breeding
sturgeons and producing fishery at Kiyanly port, in the Balkan province on the
basis of "turn-key" principle. The construction is to be launched in
October, and the complex is to be completed in May 2008.
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EDUCATION
US$11m provided for 2 educational institutions in Turkmenistan
Turkmenistan has announced two contracts for construction of education
institutions worth US$11.319 million, website Turkmenistan.ru reported on
October 6th.
TurkmenNeft would sign a contract with Turkish firm Atayurt for the construction
of a school in Balkanabat city of Balkan province, which would be able to
accommodate 600 students. Total cost of the project is US$7.362 million. Work
should start in November 2006 and the project should be ready by February
2008.TurkmenNeft would sign another contract with the Turkish company Shap
Turkmen for the construction of a kindergarten for 160 kids in Balkanabat city.
The total cost of this project is US$3.957 million. Construction work should
start in November 2006 and the project should be ready by October 2007.
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ENERGY
Central Asia declares itself a nuclear weapons free zone
The five countries of Central Asia, Kazakstan, Kyrgyzstan, Uzbekistan,
Tajikistan and Turkmenistan have signed a treaty creating a nuclear weapons free
zone in their lands. Semipalatinsk, the former Soviet nuclear test site in
eastern Kazakstan, was the scene for the treaty's historic signing on September
8th, New Europe reported.
Under the treaty, the five countries have committed themselves to ban the
production, acquisition and deployment of nuclear weapons and their components.
The treaty does not prohibit the use of nuclear energy for peaceful purposes.
"This is our contribution to global security," Kazakstan' Foreign
Minister, Kasymzhomart Tokayev, said. "It will become an impetus for the
coordinated efforts of the world community in non-proliferation and prevention
of the acquisition of weapons of mass destruction by terrorists. It will
undoubtedly become an important step in the development of peaceful nuclear
energy."
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FOREIGN TRADE
Putin, Niyazov discuss trade contacts, Caspian region
Russian President, Vladimir Putin, and his Turkmen counterpart, Saparmurat
Niyazov, discussed key issues on the two countries' agenda over the phone on
September 24th, Interfax News Agency reported.
"The heads of state addressed crucial issues of bilateral cooperation in
the trade and business sphere. At the same time, both sides expressed
satisfaction with the level of cooperation in the gas and energy sector and the
pace at which these contacts have been developing," the Kremlin press
service reported. When discussing the situation in the Caspian region, Putin and
Niyazov "noted the need for constructive joint work by the littoral Caspian
states to successfully continue searching for solutions to key issues related to
the legal status of the Caspian Sea," the press service said.
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ENERGY
Ukrainian energy minister hopes to restore ties
Ukrainian-Turkmen gas relations have taken a turn for the worse, largely due to
mistakes on the Ukrainian side, Ukrainian Fuel and Energy Minister, Yury Boyko
said.
The new heads of the fuel and energy ministry will do all they can to restore
the partnership to its former state, Boyko added. "We will be forced to
take effective measures to restore trust between the partners and re-establish
direct contracts, which are beneficial for both sides," Boyko said at a
press conference in Kiev on August 14th, Interfax News Agency reported.
Top Ukrainian government officials will soon begin preparing for a visit to
Turkmenistan, Boyko said.
Previous visits by Ukrainian officials were not properly prepared, and the
delegations did not take Turkmenistan's position into account, Boyko said. Among
the mistakes Ukraine has made in its relations with Turkmenistan, Boyko named
the loss of warranted contracts to sell Ukrainianj goods and the end to gas
trade under direct contracts. Boyko said, however, that Ukraine is not willing
to buy Turkmen gas at a considerably higher price than before.
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FOREIGN ECONOMIC COOPERATION
Niyazov hails economic ties with China
Turkmenistan President, Saparmurat Niyazov, welcomed the Chinese delegation
headed by Yu Guang Zhou, deputy trade minister of the China People's Republic,
in the Turkmen capital, Ashgabat. During the talks at the presidential palace,
both sides signed a comprehensive economic cooperation agreement including oil
fields, natural gas and textiles. Delegates from both countries signed the
bilateral agreements during the meeting. The agreements are expected to boost
economic ties between the two countries. Speaking at the meeting, Niyazov
expressed satisfaction with his country's developing economic relations with
China. He went on to say that the two counties had common views on issues such
as international politics, humanitarian aid and UN reforms. "We attach
great importance to the realisation of the natural gas pipeline construction
project," he added. Niyazov invited the visiting Chinese delegation to join
together with Turkmenistan in the production of hydrocarbon, polyproplene and
liquefier gas on the Caspian coast. The Chinese will consider the proposals in
detail. With the introduction of the pipeline project, Turkmenistan will sell
30bn cubic metres of natural gas to China annually, Interfax News Agency
reported.
Meanwhile, China's CITIC Group will build new facilities and reconstruct the
Maryazot mineral fertiliser plant in Turkmenistan. Recently, Niyazov allowed
Turkmendokun, of which Maryazot is a part, to sign the deal that costs 265.95
million Euro, a source at the presidential press service said.
He also allowed the Construction Ministry to sign a contract with the Chinese
consortium Capital Longji Sci-Tech Co. Ltd on building a glass plant in Ashgabat.
The contract costs 67.38m Euro. The presidential ordinance was issued "for
fully meeting the national economy's demand for mineral fertilisers and
glass," the source said. Both projects will be partially financed with a
300 million Euro loan from the Export-Import Bank of China. Also Niyazov
permitted the State Foreign Economic Bank to sign a general credit agreement
with the Export-Import Bank of China and receive a 20-year 300 million Euro loan
at three per cent annual interest.
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TOURISM
Govt approves Caspian tourism development plan
Turkmenistan has embarked on an ambitious plan to turn its Caspian coast
into a world class tourist attraction. Initially the plan was approved by
Turkmen President, Saparmurat Niyazov. This project is first of the series of
tourist attractions planned for the Caspian coast of Turkmenistan, reported
Turkmenistan.ru.
Total cost of the project is US$26.97m and it should be ready by February 2008.
The ministry of railways would sign a contract with the Turkish company, Delta,
for construction of a 12-storey health resort and tourist complex at the Avaza
settlement at Turkmenbashy, the Caspian city of Turkmenistan. The tourist
complex would be able to accommodate 200 guests simultaneously. There would be
single accommodation as well as family units for two, three and four persons.
The services would include bars, stores, fitness clubs, open and covered
swimming pools, tennis courts and basketball area. Physical therapy and medical
treatment facilities would also be included in the tourist complex.
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