Books on Turkmenistan
Update No: 322 - (26/10/07)
Turkmen president in Tehran
Speaking at the second summit of the heads of the Caspian Sea states, Turkmen
President Gurbanguly Berdimuhamedov emphasized that unfinished work on
developing a draft convention on the legal status of the Caspian Sea affects the
adoption of a set of documents on cooperation in the spheres, such as:-
A) preservation, reproduction and use of biological resources of the Caspian
B) the fight against poaching;
C) commercial shipping;
as well as
E) the development and use of hydrocarbon resources of the Caspian Sea bottom.
In this regard, the president of Turkmenistan proposed to hold regular meetings
of the Caspian states' foreign ministers to enhance the constructiveness of the
"Turkmenistan has always followed the path of mutually acceptable solutions
on the basis of the international law to the extent that it guarantees sovereign
rights and legitimate interests of the Caspian states," Gurbanguly
Berdimuhamedov said. "Turkmenistan does not accept the practice of
unilateral activities on the Caspian Sea, first of all exploration of those oil
fields that remain disputed," he said.
"In this context, it should be emphasized that Turkmenistan strictly
complies with universally recognized norms and principles of the international
law designed to respect sovereignty, equality and justice in relations with
partners in the region. Foreign policy activities of Turkmenistan leave no
single reason for doubt in its irreproachable compliance with relevant
international norms and principles," Gurbanguly Berdimuhamedov said. He
stressed that Turkmenistan's legal rights and interests in the Caspian region
should be treated similarly.
"We speak about the observance of principles and norms of the international
law not only in relation to Turkmenistan, but equally in relation to our
neighbours in the Caspian region," the president specified.
The Turkmen president offered his full support to a draft joint declaration and
expressed confidence that this declaration would become the most important
document for progress in the negotiations to reach accord on a draft convention
on the legal status of the Caspian Sea."
In conclusion, Gurbanguly Berdimuhamedov assured that Turkmenistan would further
take an active part in resolving all issues pertaining to the legal status of
the Caspian Sea for the sake of stronger peace, security and international
New deal for foreign investors
Turkmen President Gurbanguly Berdymukhammedov signed a package of amendments to
spell out investor safeguards and extend them to a number of existing laws, in
Turkmenistan's latest move to lure investors to the energy-rich country.
The amendments don't appear to represent major changes, and are in fact focused
on a "national tourism zone" with special legal, tax, and customs
regimes. The package was signed on October 1, but only announced nearly two
weeks later, on October 12. But once the news was out, both Western and Russian
media were quick to assess the move as a serious attempt to attract investment.
The changes purport to strengthen investors' hands by harmonizing a handful of
laws that apply to foreign investment -- including on land use, tourism, a free
economic zone -- and it allows them to rent land for long-term use. To protect
Turkmenistan's natural resources -- including vast fossil-fuel deposits --
foreign entities are banned from owning land with sizable mineral deposits.
According to Anna Walker, a senior editor with the Economic Intelligence Unit (EIU)
in London, there are other long-standing obstacles to investment in
Turkmenistan, and she says the amended law does not go far enough to make the
business climate truly attractive to potential Western investors.
"Although they allowed foreigners, for example, to start up ventures on
their own without the need to form joint ventures with government companies,
they don't relax a lot of the other restrictions," Walker says. "I
mean, it has always been difficult to invest in Turkmenistan. For example, the
restrictions on the access to the foreign exchange -- there is no mention it
would be easier for foreigners to gain access to the foreign exchange. There is
also no mention that the official exchange rate will be made more
Walker says the official exchange rate inside the country of the Turkmen
currency, the manat, is about five times the black-market rate. Last week, the
government announced its plan to redenominate the manat in 2009, removing three
zeros. News agencies quoted analysts as saying the move could facilitate foreign
Walker and other experts suggest that the recent amendments appear to
demonstrate an eagerness to usher in foreign capital to boost the Turkmen
economy. Turkmen state media quoted President Berdymukhammedov as saying that
development of the country's energy sector requires foreign investment and new
During his trip to New York in September, Berdymukhammedov said he wanted to
accelerate economic reforms and his country's transition to a market economy, in
part to stimulate economic growth and boost living standards. "Turkmenistan
supports the concept of mutually beneficial exploitation of raw energy resources
by energy providers, as well as by end consumers," he said. "In this
context, we believe that the development of Turkmenistan's energy-resource
projects for international markets will add an extra impulse to invigorate
intergovernmental and interregional trade and economic relations."
Turkmen state media reported that Berdymukhammedov met in New York with
representatives of top U.S. businesses and the heads of several international
companies, including oil companies BP and Shell, to discuss potential
cooperation opportunities. State media has quoted Berdymukhammedov as saying
Turkmen gas production will reach 250 million cubic meters and oil production
100 million tons a year by 2030. International oil giants -- including Chevron,
BP, and Total -- have reportedly expressed interest in investing in
Turkmenistan's energy sector.
The EU, in particular, has been eager for Turkmen gas as part of an effort to
reduce its dependency on Russia. Britain's minister of state for energy, Malcolm
Wicks, visited Ashgabat last month, and potential Western investments in the
Turkmen gas sector reportedly dominated his meeting with the Turkmen leaders.
Wicks said afterward that he has been "impressed by how Turkmenistan is
considering the many options available to it, including the opportunities for
energy trade with the EU." He expressed Britain's willingness to cooperate
with Turkmenistan, and -- drawing a sharp contrast with Russia -- he offered to
pay market price for the Turkmen gas.
But experts say that despite Turkmenistan's clear desire to attract Western
investors -- in addition to existing deals with Russia and China -- and the
West's willingness to cooperate with Ashgabat, they doubt that cooperation will
happen anytime soon. There are currently no export pipelines that transport
Turkmen gas to Europe without crossing Russian territory. But plans have been
proposed for trans-Caspian projects, opposed by Russia on so-called
environmental grounds, that would transfer Turkmen and Kazakh hydrocarbons
across the bed of the Caspian sea, through Azerbaijan, Georgia, and Turkey to
the European market. Another proposal envisions piping gas through Iran, but
that plan would face strong opposition from Washington.
Mathew Clements, Eurasia editor in the country-risk department for Jane's
Information Group in Britain, says that Western representatives like Wicks have
their eyes fixed squarely on longer-term plans and cooperation with
Turkmenistan. "I think one of the reasons why they'd make statements like
this is to try and encourage Turkmenistan to agree to the construction of a
pipeline across the Caspian, to try and focus its energy on supplying its gas
through this method, and by trying to give beneficial market prices, make it
beneficial for them economically to do this," Clements says.
Many observers say Turkmenistan needs to do much more than simply lift a few
restrictions to bring Western investment to the country. They say Ashgabat
should create a better business environment, which requires a wider range of
reforms -- both economic and political. Walker says reform of the Turkmen
judicial system should be part of a broader process.
Russia is currently Turkmenistan's main partner in the energy sector, with more
than 50 billion cubic meters of Turkmen gas flowing annually to Russia.
Beijing's landmark deal with Ashgabat in July earmarked some 30 billion cubic
meters of gas a year for 30 years through a planned pipeline under construction.
So Russia and China appear poised to remain Turkmenistan's primary business
partners in the energy sector in the immediate future, regardless of any
tentative steps to reform economically or establish firm ground rules for