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turkmenistan  

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TURKMENISTAN


 

 
Key Economic Data 
 
  2002 2001 2000 Ranking(2002)
GDP
Millions of US $ 7,672 4,000 4,400 98
         
GNI per capita
 US $ 1,200 950 750 127
Ranking is given out of 208 nations - (data from the World Bank)

Books on Turkmenistan

REPUBLICAN REFERENCE

Area (sq.km) 
488,100 

Population 
4,775,544 

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: 277 - (01/02/04)

The Caligula of Central Asia
The Turkmen have a president, Saparmurat Niyazov, who is not quite sane. Indeed he shows every sign of megalomania, much as did Caligula in Ancient Rome. He bears out the dictum of Lord Acton, the English historian of the late nineteenth century, who made the immortal remark: "Power corrupts and absolute power corrupts absolutely." 
Niyazov acquired his power by being formerly the communist boss of the country. This is true of other Central Asian leaders, who have not become megalomaniacs. But their countries are more sophisticated culturally. When the republics abutting on the Ferghana Valley, Uzbekistan, Tajikistan, Kazakstan and Kyrgystan, were ruled by Tamurlaine, Turkmenistan was a desert inhabited by nomads. Seven or eight tribes of nomadic origin still comprise the population. The difficulty of keeping notoriously unruly nomads together is the reason Niyazov gives himself for the extraordinary cult of his 'larger than life' personality.
For that it certainly is. He has re-incarnated himself as a religious luminary. This involves a new tome to replace the Koran and the Bible, which gives his mother a key role, after whom bread, the month of April and the ministry of justice are now named. She saved Niyazov's life in an earthquake in Ashkabad in 1948, which event is now commemorated by a gigantic statue. Many a Turkman must wish that her maternal instincts had been less on the alert.
The calendar has been changed into one of eight months of 45 days or so each. The dictator's self awarded title, Turkmenbashi, is now used to designate towns across the desert republic, as well as public buildings and the airport. His photograph is everywhere, including in school classrooms, where the children sing an oath of loyalty to him every morning.
Despite this adulation, there are hardy spirits, thinking perhaps of the example of Caligula (who was assassinated by his own guards) who have tried to eliminate him, the last time on November 25th last year. But he is not mad enough as was Caligula to taunt his own guards. It will be more difficult to attempt it again. He has the sense not to travel publicly abroad, not even to the summits of fellow dictators in Central Asia.
He has lost an ambassador or two who have sought asylum abroad, as with the envoy to Turkey a year or two ago. But it is unlikely that, short of another successful attempt on his life, he will lose power soon. He has, indeed, been declared president for life by the tame parliament. 

Disadvantageous deal with Russia
He has made a frightful mess of his policy towards Russia and the West. He ruined the chances of obtaining a gas pipeline across the Caspian Sea to Western markets by his ham-fisted negotiating tactics. The representatives of the majors got totally fed up by him and put prudence before their pockets.
Niyazov was then obliged to do a deal in April with the one country across which Turkmen gas can be exported to market, Russia. This is now coming into force, 2004 being the first year of the agreement's operation.
Russia needs Turkmenistan's gas acutely because it can plug gaps in delivery that plague Gazprom, the Kremlin-controlled natural gas monopoly. Gazprom maintains export commitments to European markets, leaving it short of supply for domestic consumers. Niyazov has claimed that Turkmenistan has 22.5 trillion cubic meters, which would make it the third-largest potential natural gas source on earth. Whatever its real resources, its current exports go almost exclusively to former Soviet states via Russian pipelines.
While Russia needs transit fees, it also needs a healthy Gazprom. For this reason, Russian executives have consistently courted Niyazov. This courtship appeared to be blooming before December 12. 
On April 10, 2003 Niyazov traveled to Moscow and signed a framework agreement on gas cooperation with President Vladimir Putin as well as a 25-year contract on gas supplies to Russia with Russian natural gas monopoly Gazprom. Niyazov pledged to supply up 100 billion cubic meters of gas to Russia annually from 2010 onward or 2 trillion cubic meters in 25 years. Russia would pay Turkmenistan $44 per thousand cubic meters, 50 percent in barter goods and 50 percent in cash. This would be twice the price Gazprom pays domestic suppliers, according to published reports. Niyazov claimed that the deal would bring Turkmenistan $200 billion and $300 billion to Russia. 
At the time the presidents signed the deal, the only foreign company of any size working Turkmenistan's sector of the Caspian shelf was Dubai-based Dragon Oil. Turkmenistan has also signed development deals with Malaysia's Petronas and Denmark's Maersk Oil. Now, though, Ukraine may be fashioning a gas deal much like the one Russia wants - potentially slowing deals and jacking up prices. 
On December 4, Niyazov and Naftogaz Ukrainy head Yury Boiko met in Ashgabat to discuss a 25-year gas supply agreement. Under a current five-year contract, according to Interfax, the Ukraine outfit receives upwards of 150 billion cubic meters at the price Russia agreed to in April. However, Boiko may be interested in crowding out the Kremlin. He has reportedly visited Ashgabat many times in 2003. The deal he discussed with Niyazov reportedly involved 3-4 trillion cubic meters of gas, guaranteed until 2032. Some expect Ukrainian President Leonid Kuchma to sign such an agreement with Niyazov during a visit to Asghabat in February or March. 
Russia and Ukraine could eventually clash over these agreements, since the countries' gas companies cannot feasibly work on the same sector at the same time. Gazprom's framework agreement with Turkmenneftegaz implies the Russian company's nearly exclusive rights to purchase all Turkmen gas for the next 20 years. Gazprom has already committed to buy at least 60 billion cubic meters in 2007 and between 70 and 80 billion annually for 20 years from 2009. If these numbers materialize while Ukraine gets the volume it apparently expects, Turkmenistan's monopoly would have to produce around 100 billion cubic meters of gas annually by 2007 and 125-140 billion by 2009. The Moscow newspaper Kommersant and others have analyzed Turkmenistan's supply and called such numbers unrealistic. 
Russia has reason to mistrust Ukraine. In 2001, Niyazov promised Russia's Rosoboronexport and Itera that Turkmenistan would accept gas-for-arms barter deals. So far, these deals have failed to materialize, while Ukraine has started importing more weapons to the defense-minded Niyazov. In 2002, Kiev reportedly earned some $50 million in arms deals with Ashgabat. 
It is unclear what will happen next in negotiations between Zarit and Turkmenistan. But the arms story reveals how Niyazov's authoritarian ways make investment in Turkmeni risky.The president, who calls himself the "Head of All Turkmen," reportedly keeps a large stockpile of Soviet-era arms. If Russia hopes to circumvent other Caspian investors by plowing into Turkmenistan, it may face higher opportunity costs than a contract can reflect.

New gas pipeline to China
But a new prospect is opening up, to export to China via a new pipeline, built with the help of Chinese finance. 
The problem is that the route lies across Afghanistan, which is not exactly the most realistic venue for a pipeline. It is not difficult to see the possibilities for theft or sabotage or blackmail. Unless conditions improve remarkably in Afghanistan that project is likely to remain a non-starter.

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ENERGY

Turkmenistan increases production and exports


Turkmenistan raised gas production 10.6% year-on-year to 52.75bn cubic metres in January-November last year. Gas exports rose 9.6% to 38.9bn cubic metres, the National institute of Statistics and Information said, Interfax News Agency reported.
Turkmenistan produced 9.029m tonnes of oil, up 8.9% year-on-year, and refined 6.2m tonnes of crude, up 20%. Production rose 23% to 1.88m tonnes of gasoline, 29% to 1.749m tonnes of diesel, 160% to 20,500 tonnes of lubricants, 35% for heating oil and 23% for petroleum bitumen. Turkmenistan planned to raise production of natural and associated gas a substantial 26% in 2003 as a whole compared with 2002, to 67.582bn cubic metres, the National Institute of Statistics and Information said. The county planned a 50% increase in oil production to 13.5m tonnes.

Turkmen electricity goes to Turkey 

December 11th saw the launch of an electricity bridge, Turkmenistan-Iran-Turkey. Ashgabat considers it an historically important event - the start of Turkmen electricity export to Europe, The Times of Central Asia has reported. 
The Turkmen electricity company, Kuvvat, and its Turkish counterpart, TETAS, signed a contract for the annual delivery of 300 million KW/h of Turkmen electricity to Turkey, worth over US$10 million. 
Kuvvat has also agreed with the Iranian electricity company, Tavanir, on the transit of electricity from Turkmenistan's Turkmenbashi and Balkanabat electric power plants to Turkey through Iran. The transit, across 1,300 kilometres of Iran's territory, costs nearly US$2 million (US$0.65 per 1 KW/h). 
Ahmet Chalik, representative of the Turkmen President for the transportation and sale of Turkmen oil, natural gas and electricity in Turkey, and representatives of the Turkish and Iranian embassies in Ashgabat attended the signing ceremony for the documents. "This is the first step in the delivery of Turkmen energy sources to Turkey. The next step would be Turkmen natural gas supplies," said the Turkish Ambassador to Turkmenistan. 
Turkmenistan has excessive energy resources and is targeted at energy export. In recent years the country has modernized old and build new energy facilities. The electric power plants in Abadan, Turkmenbashi, and Balkanabat have launched new gas turbines delivered by General Electric. According to official sources, last year Turkmenistan generated nearly 11 billion KW/h of electricity. 
According to the Energy Ministry, the overall capacity of Turkmen electric power plants can generate more than 16 billion KW/h of electricity a year. Over the past several years Turkmenistan has been exporting electricity to Iran and Afghanistan.

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FOREIGN LOANS & AID

China provides Turkmenistan with credit, grant totalling US$5.4m 

China has provided Turkmenistan with a grant of 15 million yuan, or about US$1.8m, and an interest-free credit for 20 years of 30 million yuan, or about US$3.6m, Interfax News Agency has reported. 
Turkmen Deputy Prime Minister, Yolly Gurbanmuradov, and Chinese Ambassador Lu Guicheng signed the corresponding agreement.
It is planned that the credit and the grant will be used by Turkmengaz to buy equipment and spare parts for its repair plant. 
The Chinese ambassador said "Turkmenistan and China have enormous cooperation potential, one of the most important areas of which is partnership in the oil and gas sector, where China has accumulated a lot of experience." 
A source in Turkmengaz told Interfax that over the past few years the company has already signed a number of contracts with Chinese companies and the China National Petroleum Corporation aimed at modernising the republic's gas sector and increasing the effectiveness of construction of gas exploration and production wells. 

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