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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: 328 - (28/04/08)

Outward bound
The new regime in Turkmenistan is striving its up most to distance itself from its predecessor, that of Saparmurat Niyazov. His successor has an even more rebarbative name, Gurbanguly Berdymuhammedov, but is running a far less abrasive regime.

In minor as well as major matters, the new dispensation is to open up to the outside world. Niyazov's country was closed in on itself. He ran a madcap system, that reflected his diseased mind. Opera and beards and many another thing were banned. But not megalomania, so long as it was by him. 

Music festival bodes well
The government encouraged a welcome development in mid-April on the musical front, unthinkable under the former tyrant. Three Iranian music groups participated in an international music festival held in Turkmenistan. 
Artists from Iran, Austria, Russia, Saudi Arabia, France, South Korea and the US took part in the festival which involved classic music of all countries.

President Closes “Turkmenbashi Fund”
In a concomitant move, the president is continuing to release billions of dollars held in an off-budget account by his predecessor, the Turkmenbashi. It was announced last year in August; but it is actually happening. This is his chance, after all, to win people’s trust by ensuring the process is transparent and spending the money on social programmes. 

Everyone knew that the Turkmenbashi was on an ego-trip that knew no bounds. He was salting money away in the West and boosting himself as the greatest Turkman of all time. A colossal fraud. 

This was of course well known, no-one better, to his close associates. 

In late June, last year, Berdymuhammedov, his dentist- turned providential successor, decided to shut down Niyazov’s International Fund and set up a liquidation commission to review past transactions on the account and draft proposals on where the money should go.

Niazov set up the fund in 1993, ostensibly to finance humanitarian activities, but it has always been shrouded in secrecy. There are no official figures on how much is held in the account, although independent experts say it is worth several billion dollars. 

According to various reports, the money included export revenues for gas and cotton, foreign investments earmarked for major construction projects, and private donations from Arab sheikhs in the Gulf.

Niyazov personally controlled disbursements from the fund, which included gifts for members of the Halk Maslahaty, Turkmenistan’s 2,500-seat supreme legislature, money distributed to children at mass public events, and awards for bright schoolchildren. 

An NBCentralAsia economic expert describes the fund as a “black hole”, saying the lack of a founding charter or financial statements showing what money was going in and out of the account made people suspicious of it. “The new leadership [is trying] to get rid of this unnecessary structure as quickly as possible because Berdymuhammedov doesn’t want his name linked with the dubious past,” said the expert. He said Berdymuhammedov would win people’s trust if he placed the money in the government budget, although he said this would take at least six months because of the need to audit the account. 

Other NBCentralAsia commentators agree, saying that once the fund is liquidated, the authorities could transfer the money to the treasury and use it to support social programmes. “The money could be used to fulfill the [election] pledges that Berdymuhammedov made to the people. After all, many of us are still wondering where the money [for reforms] is to come from,” said a commentator based in Ashgabat. During his election campaign in January, 2007, Berdymuhammedov promised to carry out broad education, healthcare and pension reforms.

Of one thing NBCentralAsia’s commentators are certain – the decision what to do with the money rests with Berdymuhammedov himself. It is highly improbable that the liquidation commission would dare to offer him any advice on the matter. Moreover, it is unlikely that he will be the only oil dictator in the world not to maintain a private slush fund

The Turkmen card in the Caspian game
Turkmenistan matters in the wider world for its gas resources. An USD 7 to USD 8 billion Nabucco pipeline, backed by the EU and the US, as we have seen, is expected to link energy-rich Central Asia to Europe through Turkey, Bulgaria, Romania, Hungary and Austria.

Construction on the pipeline with a projected annual capacity of between 20 and 30 billion cubic meters has been tentatively scheduled to begin in 2010. Many observers feel that they have left it late and particularly in light of the fact that the Russian-Italian competitor (similar route and market) is already funded whilst Nabucco is not.

Azerbaijan, Iran, Turkmenistan and more recently, Iraq have been seen as possible suppliers for the project. Iraq is being backed by the United States as might be expected, but Iraq is still flaring off its gas and is many years off having a means of getting it’s gas to market. It’s pipeline security for oil exports is abysmal, which does not augur well.

Turkmenistan's Vice-Premier responsible for Oil and Gas Tachberdy Tagiyev, met with UK Energy Minister Malcolm Wicks, in London, in mid-April, for talks on how Britain could help Turkmenistan exploit its large reserves of oil and natural gas –if in fact they are truly substantial, an unproven point at this time. The Turkmens themselves don’t know the extent of their reserves and have promised to have an independent audit done to establish the situation of their reserves. That is key as to whether they just continue to supply their existing contracts with Russia and China, or may have capacity for new supply deals over and above that. 

If they do have a surplus available above their existing commitments there are prior projects to this one involving the EU.

India has for a long time had an interest in a Turkmenistan- Pakistan-India pipeline which never got off the ground due to the implausibility of running a pipeline through Afghanistan, where there is often a war going on. Even then it would need to cross the Pakistan border through lawless tribal areas where the writ of Islamabad has been shown not to run. However if the security situation could by some miracle be solved, and if Turkmenistan turns out to have additional saleable reserves, then the enormous market of India would surely welcome such a source of supply. 

The high-level Turkmen delegation also included Oil and Gas Minister Baymyrat Hodjamuhammedov and the Director of Turkmenistan's hydrocarbons development agency Bayrammyrat Myradov. 

The meeting followed Malcolm Wicks' 2007 visit to Turkmenistan - the first by a UK Minister for a decade - and was one element of a week-long itinerary designed to help the Turkmens and the UK share their experiences of developing their energy sectors. 

During their UK stay the members of the Turkmen delegation visited Aberdeen to inspect a North Sea gas platform and meet with UK companies based there. They attended the 'Turkmenistan Oil and Gas' conference at London's Institute of Directors, at which Malcolm Wicks gave the keynote address. Welcoming the Turkmen delegation to Britain, Malcolm Wicks said: 

"With some forty years experience drilling for oil and gas in the North Sea the UK has learned a lot about what works and what doesn't. Consequently, we're well placed to understand the challenges Turkmenistan is currently facing as it looks to further develop its own substantial resources." 

Underlining the UK's interest in a future 'trans-Caspian' gas pipeline that could bring gas from Turkmenistan into the EU via Azerbaijan and Turkey, Wicks added the rather obvious point that : "As our North Sea gas supplies decline we will need to import more from overseas. 

"The European market could offer a high-value additional destination for Turkmen gas, to supplement Turkmenistan's well-established supplier relationship with Russia and new connections with China."
 

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