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turkmenistan  

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TURKMENISTAN


 

 

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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Update No: 324 - (19/12/07)

Locked away during Soviet times and later under the 21-year rule of Niyazov, Turkmenistan has been slowly opening its doors since Kurbanguly Berdymukhamedov came to power a year ago. He has made no obvious breach with Moscow, indeed has signed a new deal to send gas via Russia to Western markets. But he is showing initiative for all that.

New resort on the Caspian Sea
In a bold move Turkmenistan's new leader has inaugurated the construction of a $5 billion (2.4 billion pound) tourism complex on the Caspian coast. This was on December 3, his latest gesture to open up the reclusive nation to the world.

Unlike Niyazov, who banned ballet and opera during his rule, Berdymukhamedov has sought to attract foreign investment and turn his desert nation into a tourist destination. This is not as absurd as it might seem. Turkmenistan is a very beautiful country in its extremities, if not so in its huge desert interior. In particular it abuts in the west on the evocative and historic Caspian Sea.
He has officially opened construction of a complex on the Caspian Sea coast, where he plans to build dozens of new hotels, fountains, roads and parks. "Any government that has such a coast would see it as a huge blessing," he said after a ceremony. "Turkmenistan is actively integrating into the global community while following its own model of development."
State media have touted the area as a tourist hotspot, but critics believe its long, cold winters and remote location dent its allure as a tourist destination. But there is summer and the attraction of the exotic and the arcane.
The Turkmen leader said the government would earmark $1 billion for the project, not far from the Iranian border, while foreign companies including Russia's Itera and France's Bouygues have pledged to put in a further $4 billion.
He vowed to introduce tax breaks for construction companies and easier visa procedures for tourists -- a step forward for a country, which was first in the ex-Soviet block to introduce a visa regime for other former members.

President Abdullah Gul of Turkey started his state visit to Turkmenistan late Wednesday as the two countries prepared to sign agreements to boost economic and commercial relations.President Gul will stay in Turkmenistan until Friday as the guest of President Gurbanguly Berdimuhamedov. State Minister Sait Yazicioglu, Industry and Trade Minister Zafer Caglayan and Energy and Natural Resources Minister Hilmi Guler accompany Gul. Officials will discuss bilateral relations between Turkey and Turkmenistan, as well as recent regional and international topics. President Gul will also hold meetings with Turkish community and businessmen of Turkish descent living in Turkmenistan. Gul and Berdimuhamedov will attend the inauguration of Dashoguz power plant.

Turkey getting in on the Act
Turkey plans to offer Turkmenistan access to European markets via Turkey in talks in Ashgabat this week, senior government sources told Reuters on Wednesday.
Turkey, which is seeking to become a regional energy transit hub, will also propose to Turkmenistan a joint venture for operating the ex-Soviet state's abundant natural gas and oil fields. 
"Turkey will ask to take a role in operating Turkmenistan's natural gas and petroleum fields as we did with some other supplier countries," an official in the prime minister's office said.
Turkish President Abdullah Gul begins an official visit to Turkmenistan on Wednesday as part of Ankara's drive to strengthen ties with the Turkic-speaking states of Central Asia. Energy Minister Hilmi Guler will join Gul's delegation.
Turkey has signed a natural gas supply contract with Iran but some European Union countries have misgivings because Iran is subject to United Nations sanctions over its nuclear programme.
Turkey plans to invest $3.5 billion in Iran's gas fields. Another official said Ankara is considering transportation of Turkmen gas through a Trans-Caspian pipeline or through Iran.
Turkey has already signed a deal for buying 30 billion cubic metres gas from Turkmenistan, but no concrete steps have been taken on this.

Does he have it?
When it comes to energy-related deals, Turkmenistan’s leader, Gurbanguly Berdymukhamedov, is picking up where his predecessor, the megalomaniacal Saparmurat Niyazov, left off; making promises that the Central Asian state may or may not be able to ultimately fulfil. 
Despite the uncertainty, foreign governments and conglomerates still feel compelled to keep dealing with Ashgabat. Turkmenistan is believed to be one of the top five nations in the world, in terms of natural gas reserves. The problem is that no one, except perhaps Berdymukhamedov and his inner circle, knows the precise amount. Results of an independent audit of Turkmenistan’s reserves have never been released. 
According to some estimates, the country could be sitting on top of as much as 9 trillion cubic meters of gas, or as (comparatively) little as 2 trillion cubic meters. Berdymukhamedov, who assumed power following Niyazov’s sudden death in late 2006, is certainly acting like the high-end estimate is accurate. In recent months, he has taken steps to open up Turkmenistan’s economy, especially the energy sector. As a result, a virtual conga-line of energy executives has been passing through Ashgabat. The most recent energy honcho to pay respects in Ashgabat was Arnaud Breuillac, who oversees Central Asia operations for the French energy giant Total. Like other executives who arrived before him, Breuillac expressed a keen desire to get in on the energy-development action in Turkmenistan, the state news agency TDH reported December 4.

The pipelines
Over the last year, Turkmenistan has shown interest in three major pipeline projects; the Prikaspiisky route that would vastly expand Turkmen exports via Russia; the Western-controlled trans-Caspian route to Azerbaijan; and an Eastern connection with China. Berdymukhamedov in late November signalled a desire to hasten the expansion of the Prikaspiisky pipeline. Many experts believe that completion of the Prikaspiisky project, now expected in 2012, would enable Russia to prolong its dominance over Turkmen gas exports. Berdymukhamedov, however, continues to indicate that Turkmenistan possesses enough gas not only to fulfil a deal already signed with China, but to also have enough left over to make construction of a trans-Caspian pipeline economically viable.Since this spring, Berdymukhamedov has touted the supposed recent discovery of a vast gas reserve, dubbed the Osman field. With no ability to independently verify the information, foreign experts are cautious about accepting Turkmen official announcement at face value. In 2005, Niyazov is said to have commissioned an independent audit of Turkmenistan’s reserves. The findings were never publicly released.

If Berdymukhamedov is bluffing, none of the corporations or governments engaged with Ashgabat seems willing to call it. Companies remain eager for opportunities to enter the Turkmen market. On December 3, construction began on a $4-billion development project that would transform the western city of Turkmenbashi into a tourist destination. 
One of the chief investors in the project is the Russian energy company Itera. Also on December 3, the chief of the Kazakhstani energy company KazMunaiGaz, Uzakbai Karabalin, met with Berdymukhamedov and expressed interest in the entity’s involvement in tourism-related projects, according to a report distributed by the Turkmenistan.ru website.

Price hike
An indicator of the tremendous leverage now wielded by Berdymukhamedov was the late November agreement by the Russian conglomerate Gazprom to a phased-in 50 percent increase in the price it pays for Turkmen gas which currently costs Gazprom $100 per thousand cubic meters (tcm). The price by the second half of 2008 will reach $150/tcm.

Russia has shrugged off the price hike, with government officials saying the increased costs would be passed along to energy importers, specifically Ukraine. On December 4, Gazprom issued a statement announcing that Ukraine had agreed to a new gas import price of $179.5/tcm. Gazprom’s agreement to meet Turkmenistan’s gas price seemed linked to Ashgabat’s commitment to an acceleration of the Prikaspiisky project timeline. Russian political analysts nevertheless voiced unease over Turkmenistan’s behavior. One commentary posted December 4 on the Novaya Politika news website suggested that Berdymukhamedov had explored export options with US and European Union officials merely to drive up the price for Russia. "Turkmenistan’s strategy has apparently paid off," the commentary said. Economic analyst Sergei Sklyarov, writing in the Nezavisimaya Gazeta newspaper, wondered whether Moscow’s economic influence was on the ebb in Central Asia. "Russia, for the first time in post-Soviet history, found itself in a situation that a decade ago would be described as ‘the tail wagging the dog," Sklyarov wrote. "Two countries, Turkmenistan and Uzbekistan, just recently seen by Russia as Russian satellites if not zones of absolute influence, have refused to sell natural gas to Gazprom at low prices. "The Turkmen used to be happy when they managed to negotiate an increase of a few dollars per tcm," the commentary continued. "The situation changed fundamentally after Ashgabat agreed with China and the European Union about two alternative pipelines – the [trans-Caspian route] and one to China via Kazakhstan.


 

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