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TURKMENISTAN


 

 

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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: 290 - (25/02/05)

"Serious instability" possible in Turkmenistan without urgent changes -- report 
Turkmenistan needs to diversify its economy and reverse the "destruction" of its education system, otherwise it faces "serious instability," an International Crisis Group country report bluntly states. It goes on to recommend that the international community apply more consistent and focused pressure on President Saparmurat Niyazov's regime. 
The report, titled Repression and Regression in Turkmenistan: A New International Strategy, maintains that the "quiet-diplomacy" strategy for Turkmenistan is a failure. "The international response to Turkmenistan has been weak and poorly coordinated. Niyazov has successfully played different states and organizations against each other," the report, released earlier in November, states. 
Since an alleged assassination attempt on Niyazov in 2002, the president, spurred on by "growing paranoia," has expanded authoritarian controls over society, leading to a rise in human rights abuse. "The government clamped down even more on dissent, and took a much stronger line against independent activity in civil society," the report says. 
Niyazov's efforts to eliminate his enemies, both real and perceived, have extended beyond Turkmenistan's borders, the ICG report says. "Opposition leader Avdy Kuliev was beaten up in Moscow in August 2003 by suspected Turkmen agents, an allegation backed up the next month when Russian authorities reportedly asked eight Turkmen embassy officials to leave the country, supposedly due to suspicions they were planning to murder Moscow-based dissidents," the report said. "In April 2004 Makhamedgeldi Berdiev, a Radio Liberty journalist and human rights activist, was attacked in his home in Moscow and badly injured."
The report, which follows up on a similar study conducted by ICG in 2003, says the economic future for an overwhelming number of Turkmen citizens is grim. The report states that Niyazov's regime relies on the country's abundant natural resources to prop up the police state, adding that energy production is estimated at 30 per cent of GDP, but only 20 per cent of that revenue is devoted to social spending. The bulk of revenue is under direct presidential control - funds that Niyazov uses to maintain a large security force to intimidate the citizenry. At the same time, Niyazov has devoted sizeable sums to eccentric projects that reinforce his already well-developed cult of personality. In August 2004, for example, he approved a US$43m plan to build an ice palace in the desert outside the capital Ashgabat. 
The agricultural sector, which accounts for 25 per cent of GDP and which employs over half the labour force, is facing "serious decline" because of mismanagement and counter-productive policies, the report says. Unrealistic government production goals have led to seizures of seed stock, and all farmers must adhere to "Niyazov's decision to sow seeds according to a set schedule without consideration of the weather." The "gradual decline" in agriculture shows no signs of slowing, and the 2004 harvest is predicted to be the worst in years. With about half the young people in Turkmenistan unemployed, the continuing agricultural-sector collapse can lead to a "humanitarian crisis," the report warns. 
Recent developments in the educational sphere could have the most damaging long-term consequences for Turkmenistan's development, according to the report. Niyazov has transformed the education system into an instrument of "heavy ideological indoctrination," with the president's "quasi-spiritual guide," or the Ruhnama, serving as the paramount textbook in Turkmen schools. The system, in effect, now emphasizes political reliability over acquiring knowledge. The report cites one example at a vocational college, where 18 of the 34 hours of academic work are devoted to studying the Ruhnama and other tracts devoted to reinforcing Niyazov's personality cult. 
"I believe [the reforms] are good for Turkmenbashi [Niyazov] to stay in power. However they are terrible for people, because it makes them dumber…Turkmenbashi is brainwashing the Turkmens by his policies and making them like sheep to herd them easily," the report quotes one unidentified student as saying. With 40 percent of the population under fourteen, the changes in education will outlast Niyazov's lifetime and, as quoted in the report, lead to "the creation of an isolated, stupid people dangerous for stability to the region." 
The government's effort to cut Turkmen citizens off from information stretches far beyond the classroom, the report says. As of 2002, only eight people per every 1,000 had telephones. Meanwhile authorities closely monitor access to outside sources of information, especially the internet. 
While current policies may help reinforce Niyazov's hold over society in the near-term, they will likely leave Turkmenistan more vulnerable to instability over the longer haul. Niyazov's management style, which relies on frequent purges to prevent challenges to his authority from within the authoritarian system, has disrupted the development of a cohesive political elite in the country. There is also no clear line of political succession. Thus, political turmoil can easily ensue when Niyazov eventually leaves the political stage. The lack of developed political institutions, combined with the ongoing degeneration in the economy and education, could produce a "catastrophe" when Turkmenistan confronts the succession issue, the report says. 
To minimize the risks, the report urges a drastic overhaul of the international approach to Turkmenistan. The international community so far has preferred to work behind the scenes in trying to encourage the mercurial Niyazov to moderate his policies. There are powerful geopolitical reasons for prominent regional players not to confront Niyazov. Russia, for example, is intent on developing a potentially lucrative energy export relationship with Turkmenistan. Meanwhile, the United States has voiced criticism of Niyazov's policies, but has nevertheless been reluctant to exert strong pressure on Ashgabat out of a desire not to upset US security interests in Central Asia. Such policies of tacit cooperation raise the chances of tumult in Turkmenistan, ICG representatives believe. 
"The international community has put short-term economic and security benefits ahead of longer-term regional security, and there is likely to be a terrible price for that," David Lewis, Director of ICG's Central Asia Project, said in a written statement. "Despite its oil and gas, Turkmenistan's economy is becoming brittle, and the inevitable political succession could well be violent." 
The report urges the international community establish clear benchmarks that Turkmenistan must meet, or face concrete economic and political sanctions. For instance, the report says Russia should link continued economic cooperation to efforts by the Niyazov government to restore Russian-language instruction in Turkmen schools, and to open access to Russian media outlets. Russia should also insist on the restoration of dual citizenship rights for Turkmen residents. 
In addition, the report specifically urges the United States designate Turkmenistan "a country of particular concern." The European Union, meanwhile, should tighten its criteria for the extension of economic assistance, the report said. 

Leaders of Turkmenistan, Uzbekistan press ahead with bilateral thaw 
The presidents of Turkmenistan and Uzbekistan, whose mutual animosity has been well documented in recent years, are striving to revive a functional relationship between their neighbouring Central Asian states. However, efforts to implement measures adopted during a mid-November bilateral summit appear to already have hit snags. 
Just two years ago, Turkmen-Uzbek relations were experiencing a deep chill, after Turkmen leader Saparmurat Niyazov accused Uzbekistan of aiding an assassination attempt against him. But at a one-day bilateral summit November 19 in the Uzbek city of Bukhara, Niyazov and Uzbek President Islam Karimov announced they had resolved all problems that had plagued bilateral relations since the 1991 collapse of the Soviet Union. "There are no disputed problems which could give rise to any suspicion or doubt about mutual relations," Niyazov said during a joint news conference. 
During the summit, Niyazov and Karimov agreed on a framework for sharing regional water resources, and signed agreements regulating border-crossing procedures for Turkmen and Uzbek citizens. The agreements, both leaders hope, will help spur economic development and bilateral trade. Karimov said the agreement "will perfectly regulate our relations." Niyazov, meanwhile, vowed that Uzbeks and Turkmen living in border areas could now "feel secure" and "not worry about their future." 
Tension along the Turkmen-Uzbek frontier has heightened dramatically in recent years, driven in large part by cross-border smuggling. Helping to support Niyazov's authoritarian regime, the Turkmen government has kept prices for many basic goods artificially low, taking advantage of the country's abundant natural resources. Many Uzbeks have resorted to smuggling Turkmen goods, especially petrol, back into Uzbekistan, which maintains punitive tariffs on many imported items. The smuggling problem has reportedly caused several shooting incidents along the border, with Turkmen border guards opening fire on people suspected of engaging in illicit activity. 
Shortly before the summit, an incident reportedly occurred at the Tuyamuyun hydro-electric station situated along the Turkmen-Uzbek border, in which 25 Uzbek police officers, detailed to provide security at the facility, were detained by Turkmen border guards. The Uzbek officers supposedly spent 32 days in custody. 
The summit and the subsequent agreements appear to have been hastily arranged. Karimov reportedly initiated the effort to foster a Turkmen-Uzbek thaw. Local analysts believe he had compelling reasons to seek a meeting with the mercurial Turkmen leader. For one, cross-border smuggling has severely undermined the Karimov administration's effort to maintain a tight grip on Uzbekistan's economy. Uzbek authorities are also worried that one of Niyazov's grandiose construction projects -- a massive reservoir, dubbed the Golden Lake - would drain water from the shared Amu Darya River to the point that it would endanger Uzbekistan's cotton industry. 
Uzbekistan has also been facing mounting international pressure over its poor human rights record, and its reluctance to implement economic reforms. Settling disputes with neighbouring Turkmenistan would potentially eliminate a major distraction for Karimov, enabling him to devote more time to dealing with his international critics. 
For his part, Niyazov seemed to welcome the chance to improve ties with Uzbekistan. The visit to Bukhara marked one of the few instances that Niyazov has ventured beyond his country's borders in recent years. Turkmen officials have appeared concerned about Uzbek efforts to develop the Kokdumalak oil field, which straddles the two countries' frontier. 
In addition, in meeting with Karimov, Niyazov appeared to see an opportunity to strengthen the authoritarian system in Turkmenistan. According to a report broadcast by the Deutche Welle radio, Uzbek authorities gave assurances to their Turkmen counterparts that they would monitor the movements of Turkmen citizens travelling in Uzbekistan, and would alert Ashgabat to any perceived "suspicious steps" undertaken by Turkmen citizens on Uzbek soil. 
Both sides seem intent on promoting a bilateral thaw. Underscoring this is the fact that on December 1 the two countries launched an effort to demarcate their 1,800-kilometer frontier. Nevertheless, the measures to ease border-crossing hassles agreed on in Bukhara remain in effect. 
The agreements do not appear to have stemmed the steady flow of smuggled goods from Turkmenistan into Uzbekistan. On November 26, Niyazov reportedly reprimanded top officials in border provinces over the high volume of smuggling. Dissatisfaction related to the smuggling issue may help explain why Niyazov on December 1 suddenly sacked the governor of the Dashoguz region, Isanguly Gulmyradov, citing "grave shortcomings in work and abuse of power." 
While Niyazov and Karimov may be friends again for the moment, the two, especially the Turkmen leader, are known to engage in political zig-zagging. Thus, experts in both countries are cautious when evaluating the potential impact of the thaw. 
At the Bukhara summit, both Niyazov and Karimov pledged to take steps to boost trade. Niyazov predicted that Turkmenistan would be "ready within four to five months to open border trade outlets and markets to sell petrol and liquefied natural gas at international prices." One way to measure Niyazov's and Karimov's commitment to improved bilateral relations will be to see how the two follow through on their trade pledges.
 

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CONSTRUCTION

Bouygues wins construction contracts in Turkmenistan

French company Bouygues, which has already constructed a number of large facilities in Turkmenistan, including the Presidential Palace, mosques in Kipchak and Geoktepe, the Ruhiet Palace of Congresses and Art as well as several new ministries, has signed contracts with the Turkmen government on implementation of 2 new projects, Turkmenistan.ru reported recently. 
Turkmen President Saparmurat Niyazov received on January 17th a group of senior managers of the French company headed by Bouygues Vice President Aldo Carbonaro. The principal result of the meeting was the signing of contracts for construction of the main building of the Turkmen state university named after Makhtunkuli and the Press House.
According to the government, the total cost of the project is US$40m that includes the university's main building, a library, a reading room as well as a public hall for 1,000 people with an area of 13,500sqms and the improvement of 20,950sqms of an adjoining territory. Construction work is to start in April 2005 and finish in April 2007. As for the Press House, construction of this facility with a total area of 6,100sqms will start in January 2005 and finish in October 2006. The cost of this project is estimated at US$17m, including the improvement of 13,300sqms of an adjoining territory. At the meeting with the Bouygues representatives, Niyazov approved projects of construction of the second line of the military institute and a complex of administrative buildings designed for ministries and establishments of the agricultural sector of Turkmenistan, construction of which is scheduled for the near future.
Niyazov also reviewed a new project of a 17-storey building for the ministries of trade and consumers' cooperation and the State commodity and raw materials exchange designed by the French company. This building will be erected in the southern part of Ashgabat, near the recently built President Hotel.
During a recent session of the cabinet of ministers, Niyazov also signed a decree authorising the state concern Turkmennesftegazstroy to conclude a contract with Bouygues Batiman International on the construction of a marble and granite processing plant with a capacity of 205,000 sqms of facing stones, worth €26.7m on condition of starting the construction in February 2005 and commissioning the facility in February 2006 in the township of Ovadan Depe.
At the session, Niyazov said that the new plant would make it possible to lower construction costs of public buildings in the republic in future in view of the fact that at present they are mostly coated with marble and granite. The state corporation Turkmengeology was instructed to produce together with Bouygues Batiman International a feasibility study on the development of facing stones deposits to supply the marble and granite processing plant with local raw materials in accordance with the established order and a period of one month.

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ENERGY

Turkmenistan extracts 0.5% more oil, 0.9% less gas in 2004

Last year Turkmenistan extracted 10.051m tonnes of oil (0.5% more than the 10.004m tonnes it produced in 2003) and 58.57bn cubic metres of natural gas (0.9% less than 59.10bn cubic metres in 2003), New Europe reported recently. 
State-run Turkmengaz produced 49.3bn cubic metres of gas, the National Institute for State Statistics and Information said. Gas exports came to 42bn cubic metres in 2004, down 3.2% from 43.4bn cubic metres in 2003. Turkmenistan plans to ship around 45bn cubic metres of gas west to Russia and Ukraine. Oil refining companies in the state corporation Turkmenneftegaz - that is the Turkmenbashi complex of refineries and the Seidinsky refinery - processed 6.828m tonnes of crude oil last year, 0.2% more than the year before (6.804m tonnes). Production of lubricating oils increased 140% to 50,800 tonnes in 2004 (21,500 tonnes in 2003), polypropylene 14% to 86,100 tonnes (75,500 tonnes) and liquefied hydrocarbon gases 22% to 359,600 tonnes (295,200 tonnes).

Canadian firm interested in Turkmen Caspian Serdar block

Turkmenistan President, Saparmurad Niyazov, and Roger Haynes, head of the Canadian company Buried Hill Energy, met on January 17th to discuss the company's participation in oil projects in the Caspian and gas processing in the east of the country, New Europe reported recently. 
"Turkmenistan welcomes the readiness of foreign companies to take part in developing hydrocarbon resources in the Turkmen sector of the Caspian Sea, where over half of oil reserves and about 25% of natural gas reserves are concentrated," Niyazov said. Based on the geophysical research carried out by the US Company Western Geophysics, the Turkmen leader said, the level of energy reserves located in marine deposits is estimated at 11bn tonnes of oil and 5.5tr cubic metres of gas. A source in the Turkmen presidential administration noted that the head of the Canadian company said Buried Hill Energy is interested in the Serdar prospect in the Caspian. Haynes said another extremely attractive project is the production of liquefied natural gas at the Takhtabazar field on the border with Afghanistan. He said that an industrial unit built by his company would be able to produce up to 1,000 tonnes of propane and butane per year.

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FOREIGN ECONOMIC RELATIONS

Turkmenistan-Uzbekistan relations gain strength

During Turkmen President Saparmurat Niyazov's recent visit to Bohara, talks between the presidents of Turkmenistan and Uzbekistan were highly rated by Uzbek Prime Minister, Sadik Safayev, Turkemnistan.ru reported.
Safayev stressed the importance of the discussion by the presidents of two neighbour states on the issue on the establishment of the Central Asian Centre for Preventive Diplomacy. "As the Uzbek saying goes, a close neighbour is better than a distant relative," Safayev said. It is clear that if the two states have 2,000 kilometres of common border and many links, including between relatives, the need in political dialogue at the top level is mutual, he added.
The meeting between presidents was necessitated by the vital need to discuss important issues, many of which they managed to solve, Safayev said. "The point is that UN should set up its body there which will contribute to the implementation of programmes on strengthening stability," he noted.
Turkmenistan suggested that this office should be located in Ashgabat. "Well, this is a very reasonable proposal and we support it. In turn, Turkmenistan supported Uzbekistan's initiative on the establishment of the UN Centre for countering drug related crimes. We believe this is a regional problem.
"We also decided to establish a joint body to monitor the use of water from the border river of Amudarya that is designed to prevent any misunderstandings in this regard," Safayev said. On the whole, Safayev noted that a direct dialogue between Niyazov and Uzbek President Islam Karimov was useful and "absolutely necessary."

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TRANSPORT

Trans-Karakum railwaa project to end in December

Ashgabat-Dashoguz Trans-Karakum railway - designed to link the Turkmen capital with the administrative centre of the country's northern region and shorten the period of transportation of cargo and passengers to this region and back - has to be commissioned by the end of this year, New Europe reported recently.
President of Turkmenistan, Saparmurat Niyazov, set this deadline for local railway constructors. Constructors of the railway have already completed 280km of the track.
A 560km long railway line has crossed a halfway mark. A parallel Ashgabat-Dashoguz highway is also being built along the railway track.
It is natural that Turkmenistan is implementing this grandiose project on tracking a railway through the Kara Kum desert on its own, without foreign partners. The government allocated significant resources to boost the construction, that were used to purchase powerful equipment in the US, Belarus, Russia and Ukraine. Railway stations, technical facilities, warehouses, accommodation for personnel and railway infrastructure as a whole are being built along with track works.

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