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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: 327 - (26/03/08)

The new broom
There is no doubt that things are happening in Turkmenistan in the aftermath of the death of President Saparmurat Nivazov in December 2006, eighteen months ago. The new president, with the unpronounceable long name, Gurbanguly Berdymukhammedov, is initiating important changes.

Berdymukhammedov inherited one of the most repressive and bizarre governments in the world; and it takes time to make some of the more important changes. But some things can be done early on. He is correcting some of the dottier aspects of the Niyazov regime, who banned things left, right and centre, including revered traditional cultural activities. A significant move for the arts-loving people is announcing the return of the performing arts to Turkmenistan, Berdymukhammedov said, "I propose to breathe life back into the lyrical arts in this country." 

If he follows through on this promise, Turkmenistan may one day see a return of the many performers who left the country in the last decade -- and they will include non-ethnic Turkmen. Since Turkmenistan does not produce many movies for the big screen, reopening the cinemas means showing foreign films in theatres that will give citizens a taste of the world outside that has been difficult for them to see. 

And the return of the circus also should showcase a source of Turkmen national pride. Berdymukhammedov noted that bringing back the circus will include "national equestrian shows" because -- as for many Central Asians -- the horse enjoys a prominent place in Turkmen history and culture.

Much work still needs to be done to prepare for the return of the performing arts to Turkmenistan. The state opera house was torn down after opera was banned and in its place stands a shopping centre. Berdymukhammedov acknowledged this by saying that it is "time to rebuild and reopen." And this small but important step could be the first stage in ending the government's "Turkmenization" policy. 

Cautiously Lifting State Control 
Most of the country's production is still state-owned, state-directed and state-controlled. The government has also subsidized housing, energy and staple foodstuffs. And it has maintained an artificially strong exchange rate for its currency, the manat, that masks a real average monthly income of $150, according to World Bank data. 

Berdymukhammedov's first moves this year were to decree the opening of money changing offices, devalue the official rate to 6,200 manat per dollar from 5,200 and establish a commercial rate of about 20,000 manat per dollar. The actions were aimed at helping to bring the official exchange rate in line with the black market rate. "Without a doubt, this is the biggest reform,'' says one diplomat. "The next challenge is to bring in new forms of ownership.'' 

The Next Frontier
US policymakers believe that they can convince the new president to open up his country's purported vast reserves of natural gas to American companies. Washington is aiming to revive a strategy that led to the greatest US diplomatic triumph in the Caspian Basin to date -- the construction of the Baku-Tbilisi-Ceyhan (BTC) pipeline in the late 1990s and early part of this decade. Sceptics, however, say the US push may be too little, too late. 

Russia presently enjoys an overwhelming advantage in the Caspian Basin, underscored by the December deal -- signed by Russian, Turkmen and Kazakhstani leaders -- to greatly expand a pipeline network that runs along the Caspian Sea's shoreline. At this late stage, especially given Washington's preoccupation with the Iraq war, the United States may lack the resources and the influence to surmount numerous obstacles in the Caspian Basin. 

For one, the so-called Prikaspiiski agreement dealt a heavy blow to American-supported plans of building a Trans-Caspian Pipeline (TCP), which would take gas from Turkmenistan to Azerbaijan along the sea-bed and then onward via existing pipelines through Georgia to Turkey. That plan may not be commercially viable if the Prikaspiiski pipeline gets built. Similarly, European Union-backed plans for the Nabucco pipeline from Turkey to Austria took a hit with a deal between Russia and Bulgaria signed earlier this month for a pipeline across the Black Sea. 

But the United States will not yet concede defeat to Russia. The centerpiece of the State Department's effort to repulse the latest Russian advance in the Caspian Basin is the creation of a new office, the Coordinator of Eurasian Energy Diplomacy. Steven Mann, formerly US Principal Deputy Assistant Secretary of State for South and Central Asian Affairs and US ambassador to Turkmenistan, has been appointed to the post. 

Washington is also seeking a high-level envoy to bring more diplomatic heft to the US bargaining position, but the Bush administration is having trouble finding a suitably high-profile diplomat to fill the post. The State Department reportedly had selected Thomas Pickering, a former ambassador to Russia and top department official, but he withdrew his name from consideration.

The primary task for Mann and the would-be new envoy will be convincing Berdymukhamedov to grant American firms the opportunity to explore and develop Turkmenistan's gas fields. Mann is wasting no time in trying to woo Berdymukhamedov. On January 28, he arrived in the Turkmen capital Ashgabat for a series of top-level meetings with Turkmen leaders, including the president, according to the official newspaper Neytral'nii Turkmenistan. 

Buoying US hopes for a comeback is the belief that the Prikaspiiski pipeline's expansion blueprint will never get off the drawing board. "Pipeline declarations are a dime a dozen," said one American official, speaking on condition of anonymity. "If declarations counted, we would have seven pipelines criss-crossing Afghanistan into India. You only know that a pipeline is real when you get to financial close." 

Similarly, while the Bulgaria-Russia deal "is not positive," the official said "there is still room for Nabucco." The new diplomatic office is similar to one that existed at the State Department from 1998-2004 -- a period when, against seemingly daunting odds, the United States promoted the construction of the BTC pipeline. The BTC route, Baku-Tbilisi-Ceyhan, which by crossing Turkey circumvents Russia, prevents Moscow from achieving a monopoly of Caspian Basin export routes to the West. "Two successive administrations got it seriously right," the official said. 

The key to success back then, the official stressed, was focusing first on getting access to the energy reserves and only then concentrating on the pipeline to get it out, rather than on getting the pipeline built first. Only when there is guaranteed access to the gas will Western companies and perhaps more importantly, financiers be interested in building a pipeline, the official noted. 

But skeptics wonder if the US effort has enough weight to resist Russian opposition. They note that Russian leader Vladimir Putin is personally involved in arranging oil and gas deals with other former Soviet republics. The to-be-named US special envoy will not be able to wield anywhere near the same kind of influence as does the Russian leader. US officials believe they can best make their case by stressing that American companies have better ecological records and better practices of training local workers than does the Russian state-controlled gas company Gazprom. 

INDEPENDENT AUDIT OF GAS RESERVES
There are signs that Turkmenistan may be receptive to some American diplomatic sweet-talking. The most significant recent signal sent by Berdymukhamedov was an announcement that Ashgabat would allow an independent audit of the country's gas reserves. This is so fundamental to schemes involving Turkmenistan. 

The country's leaders have hitherto signed deals and declarations of intent in a blaze of publicity, and as quickly yet more quietly, cancelled them. There has been massive speculation about what reserves are already committed and what if anything remains. The 'pipeline deal' through Afghanistan to Pakistan and India has been on- off, for perhaps twenty years and still there is no deal. Of course war-torn Afghanistan with its semi-independent warlords has been been the obvious deterrent - international financiers are well aware of what happened to the Russian pipeline through Chechnya - and indeed currently to pipelines in Northern Iraq, but the fundamental question that may now for the first time be answered, is whether Turkmenistan actually has the necessary quantities of gas to supply, given its existing contractual commitments.

Too many uncertainties may remain to make a convincing argument that Western companies are a better option for Turkmenistan, said Martha Brill Olcott, a Central Asia expert at the Carnegie Endowment for International Peace. It is not clear how much a pipeline will cost, how much natural gas is in the country, and how much of it would be left after Turkmenistan fulfills its obligations to China and Russia. 

The Russians, who exploited Niyazov's isolation mercilessly, are treating his successor quite differently. They have agreed to a 50% rise in the price of gas they buy from the Turkmens whom they wish to keep on side. There is all to play for in Turkmenistan.
 

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