potentiality of republic of turkmenistan

8/14/2019 Potentiality of Republic of Turkmenistan

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Republic of Turkmenistan

(Trkmenistan Respublikasy)

Republic of Turkmenistan (Turkmen: Trkmenistan Respublikasy), also known asTurkmenia, Russian: ) is a country in Central Asia. Until 1991, it was a constituentrepublic of the Soviet Union, the Turkmen Soviet Socialist Republic (Turkmen SSR). It isbordered by Afghanistan to the southeast, Iran to the south and southwest, Uzbekistan to the eastand northeast, Kazakhstan to the north and northwest and the Caspian Sea to the west.

Turkmenistan's GDP growth rate of 11.5% (IMF estimate for 2007) ranks 11th in the world, it iswealthy in natural resources in certain areas, most of the country is covered by the Karakum(Black Sand) Desert.

Until recently it was a single-party system, that was considered to not meet even the most basicstandards of democracy. Turkmenistan was ruled by President for Life Saparmurat Niyazov(called "Trkmenbay" "leader of the Turkmens") until his sudden death on December 21,2006. Gurbanguly Berdimuhamedow was elected the new president on February 11, 2007.

History

The territory of Turkmenistan has a long and checkered history, as armies from one empire afteranother decamped there on their way to more prosperous territories. The region's written historybegins with its conquest by the Achaemenid Empire ofancient Persia, as the region was dividedbetween the satrapies ofMargiana, Khwarezmand Parthia.

Alexander the Great conquered the territory in the fourth century BC on his way to Central Asia,around the time that the Silk Road was established as a major trading route between Asia and the

Mediterranean Region. One hundred and fifty years later, Persia's Parthian Kingdom establishedits capital inNisa, now in the suburbs of the capital, Ashgabat. After replacement of the Parthianempire by Persian Sassanids, another native Iranian dynasty, the region remained territory of thePersian empire for several centuries.

In the seventh century AD, Arabs conquered this region, bringing with them Islam andincorporating the Turkmen into the greater Middle Eastern culture. The Turkmenistan region
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soon came to be known as the capital ofGreater Khorasan, when the caliph Al - Ma'mun movedhis capital to Merv

Magtymguly Pyragy

In the middle of the eleventh century, the Turkoman - ruled Seljuk Empire concentrated its

strength in the territory of modern Turkmenistan in an attempt to expand into Khorasan (modernAfghanistan). The empire broke down in the second half of the twelfth century, and the Turkmenlost their independence when Genghis Khan took control of the eastern Caspian Sea region onhis march west.

For the next seven centuries, the Turkmen people lived under various empires and foughtconstant inter-tribal wars. Little is documented of Turkmen history prior to Russian engagement.However, from the thirteenth to the sixteenth centuries, Turkmen formed a distinctethnolinguistic group. As the Turkmen migrated from the area around the Mangyshlak Peninsulain contemporary Kazakhstan toward the Iranian border region and the Amu Daryabasin, tribalTurkmen society further developed cultural traditions that became the foundation of Turkmen

national consciousness.

Between the 17thand 19th centuries, control of Turkmenistan was fought over by PersianShahs,Khivan Khans, the Emirs ofBukhara and the rulers of Afghanistan. During this period, Turkmenspiritual leaderMagtymguly Pyragy reached prominence with his efforts to secure independenceand autonomy for his people.

At this time, the vast territory of Central Asia including the region of Turkmenistan was largelyunmapped and virtually unknown to Europe and the Western world. Rivalry for control of thearea between the British Empire and Tsarist Russia was characterized as The Great Game.Throughout their conquest of Central Asia, the Russians were met with the stiffest resistance by

the Turkmen. By 1894, however, Russia had gained control of Turkmenistan and incorporated itinto its empire.
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Economy & Country potential of Turkmenistan

Economy of Turkmenistan

Currency Turkmen Manat = 100 Tenge

Fiscal year Calendar year

Trade

organisations

CIS,ECO

Statistics

GDP ranking 127th (As of 2004)

GDP $27.6 billion (As of 2004)

GDP growth 7.5% (IMF est) note: official government statistics show 21.4% growth, but

these estimates are notoriously unreliable (As of 2004)

GDP per capita $5,700 (As of 2004)

GDP by sector agriculture (28.5%), industry (42.7%), services (28.8%%) (As of 2004)

Inflation 3.5% (As of 2004)

Pop below

poverty line

58% (As of 2003)

Labour force 2.32 million (As of 2003)

Labour force by

occupation

agriculture (48.2%), industry (13.8%), services (37%) (As of 2003)

Unemployment 60% (As of 2004)

Main industries natural gas, oil, petroleum products, textiles, food processing

Trading Partners

Exports $4bn (As of 2004)

Main partners Ukraine 49.8%, Iran 17.2%, Italy 5.3%, Turkey 4.7% (As of 2004)
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Imports $2.85bn (As of 2004)

Main Partners Russia 14%, Ukraine 13.8%, U.S, 11.1%, UAE 8.1%, Turkey 8%, Germany

6.8%, France 4.6% (As of 2004)

Public finances

Public debt N/A

Revenues $3.05 billion (As of 2004)

Expenses $3.05 billion (As of 2004)

Economic aid $16 million from the US (As of 2001)

HQ of the Ministry of oil and gas of Turkmenistan.

Natural gas

Turkmenistan ranks fourth in the world to Russia, Iran and the United States in natural gasreserves. The Turkmenistan Natural Gas Company (Trkmengaz), under the auspices of theMinistry of Oil and Gas, controls gas extraction in the country. Gas production is the mostdynamic and promising sector of the national economy. Turkmenistan's gas reserves areestimated at 8.1-8.7 trillion cubic meters and its prospecting potential at up to 21 trillion cubic
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meters. The country cooperates with China in the construction of pipelines for the export ofnatural gas

Agriculture

Half of the country's irrigated land is planted with cotton, making the country the world's tenth-largest producer of it. It possesses the world's fourth-largest reserves of natural gas andsubstantial oil resources. In 1994, the Russian government's refusal to export Turkmen gas tohard currency markets and mounting debts of its major customers in the former Soviet Union forgas deliveries contributed to a sharp fall in industrial production and caused the budget to shiftfrom a surplus to a slight deficit.

Turkmenistan has taken a cautious approach to economic reform, hoping to use gas and cottonsales to sustain its economy. In 2004, the unemployment rate was estimated to be 60% thepercentage of the population living below the poverty line was thought to be 58% a year earlier.Privatization goals remain limited.

Between 1998 and 2002, Turkmenistan suffered from the continued lack of adequate exportroutes for natural gas and from obligations on extensive short-term external debt. At the sametime, however, the value of total exports has risen sharply because of increases in internationaloil and gas prices. Economic prospects in the near future are discouraging because of widespreadinternalpoverty and the burden of foreign debt.

President Niyazov spent much of the country's revenue on extensively renovating cities,Ashgabat in particular. Corruption watchdogs voiced particular concern over the management ofTurkmenistan's currency reserves, most of which are held in off-budget funds such as theForeign Exchange Reserve Fund in the Deutsche Bank in Frankfurt, according to a report

released in April 2006 by London-based non-governmental organization Global Witness.

According to the decree of the Peoples' Council of 14 August 2003, electricity, natural gas,waterand salt will be subsidized for citizens up to 2030; however, shortages are frequent. On 5September 2006, after Turkmenistan threatened to cut off supplies, Russia agreed to raise theprice it pays for Turkmen natural gas from $65 to $100 per 1,000 cubic meters. Two-thirds ofTurkmen gas goes through the Russian state-ownedGazprom.

Energy

Turkmenistan is a net exporter of electrical power to Central Asian republics and southern

neighbors. The most important generating installations are the Hindukush Hydroelectric Station,which has a rated capacity of 350 megawatts, and the Mary Thermoelectric Power Station, whichhas a rated capacity of 1,370 megawatts. In 1992 electrical power production totaled 14.9 billionkilowatt-hours.
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of velocity of money and rates of real GDP growth. Transition from a soft to a tougher monetarypolicy in the middle of 1996 immediately affected the dynamics of prices. In the world economyone of the most important sources of maintaining high rates of monetary base increase (thoughnot the only one) is monetization of a budget deficit its financing at the cost of issuing moneyinstruments.

Industry

In the post-Soviet era, Turkmenistans industrial sector has been dominated increasingly by thefuel and cotton processing industries to the detriment of light industry. Between 1991 and 2004,some 14 new cotton-processing plants were opened, sharply increasing the capability of processing domestically produced cotton. The construction industry depends mainly ongovernment building projects because construction of private housing is a low priority.

Gas

Turkmenistan's major gas deposits were discovered in its central and eastern areas in the 1940sand '50s, and in the 1980s the republic became the second largest producer of gas in the SovietUnion, behind the Russian SFSR. During the Soviet era gas was exported mainly to other Sovietrepublics, as Turkmenistan steadily increased delivery from about 9.2 million m in 1940 toabout 234 million m in 1960 and about 51 billion m in 1975. This export was under centralisedcontrol, and most of the export revenue was absorbed into the Soviet central budget.

This changed in 1991, when Turkmenistan gained independence and established full control overgas export and export revenues. However, Soviet-era pipelines dictate that much of the gas goesto the Caucasus, Russia and Ukraine. In the 1990s many of Turkmenistan's gas customers in theCIS failed to pay on time or negotiated barter deals. In the mid-1990s Turkmenistan stoppeddelivering gas to some CIS members, citing failure to pay and unprofitable barter deals. At thesame time, the government tried to attract investments in building gas pipelines via Iran toTurkey and Western Europe via Afghanistan to Pakistan. Neither deal went through due to anunfavourable regional security environment and high costs; inflation and the budget deficit rosebut privatisation was resisted. In the late 1990s the government renegotiated its export and pricearrangements with Gazprom and renewed deliveries to Georgia, Ukraine, and some othercountries. It also opened its first pipeline not to pass through Russia, the Korpezhe-Kurt KuiPipeline.

Official estimates indicate that Turkmenistan is still the second largest gas producer in the CIS,after Russia, and a 2004 official estimate places reserves at about 23 trillion m. Government

statistics projected extraction of 75.4 billion m of gas in 2004, and 120 billion m in 2010.


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Services

Banking

The financial system is under full state control. The banking system, which was reducedsubstantially after the 1998 financial crisis, includes 12 national banks. These institutions havethe same basic division of responsibility as in the Soviet era, overseen by the Central Bank ofTurkmenistan. Lending operations and household savings have not been important functions ofthis system. In 2005 an estimated 95 percent of loans went to state enterprises.Turkmengosstrakh, the state insurance firm, has a complete monopoly of the very smallinsurance industry.

External trade

Turkmen exports in 2006

The Turkmen Government claims to have placed great emphasis on foreign economic relationsand foreign trade and an "open door" trade policy, as declared by the President. At present 73countries are partners of Turkmenistan, including the republics of the NIS. The most prominenttrade partners of Turkmenistan are the United States, Turkey, Switzerland, Hong Kong,Germany, the United Kingdom, Cyprus, Iran, and the United Arab Emirates. Turkmenistan is amember of the Economic Cooperation Organization (ECO).

Export of industrial and agricultural raw materials remain the most important goals of theTurkmen Government. Price controls on most goods, the stabilization of reproduction processes,the creation of stable economic growth, and flexibility to innovations and a socially orientedeconomy also are very important. The government is attempting to strengthen state regulation offoreign trade and create a state system of insurance to expand and consolidate foreign economicrelations. Because of considerable growth of foreign investments, improvements are taking placein the economy. Privatization of medium and large enterprises are proceeding slowly.

In January 2006, Saparmurat Niyazov ordered to stop paying pensions to (more than 100,000)of elderly people, cutting pensions to another 200,000, and ordering to pay the pensions receivedin the past two years back to the State. This has resulted in a huge number of deaths of oldpeople, who may have had their pension (ranging from $10 to $90) as the only source of money.
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Labor

Recent statistics are not available on Turkmenistans labor force. In 2003 the labor force wasestimated to include more than 2.3 million workers, 48 percent of whom worked in agriculture,38 percent in services, and 14 percent in industry and construction. Because the state dominates

the economy, an estimated 90 percent of workers are in effect state employees. Unemploymentstatistics are not available because unemployment does not exist officially. It is believed thatdownsizing the government workforce, which began in 2003, increased unemployment insubsequent years]

Average wages in 2009 hover around $5-7 per day or $250-300 per month.

Privatization

By 1999, privatization in trade, catering, consumer services was fully completed. Availability of

adequate legal base, opening of credit lines, including the foreign ones, simplified the procedureof private enterprises opening and licensing, led to enlarge-ment of the sphere ofentrepreneurship. The private sector dominates in agriculture (60%), trade (70%) and transport(56%).

Foreign Investment

In November 1991, Turkmenistan officially opened its system to foreign economic activity byratifying the laws "On Enterprises in Turkmenistan" and "On Entrepreneur Activity in

Turkmenistan." Subsequent laws on foreign investment have covered protection againstnationalization, tax breaks on reinvestment of hard currency obtained for profits, propertyownership, and intellectual property rights protection to attract foreign investment, and theimportant 1993 decree allowing domestic enterprises to form joint ventures with foreign oilcompanies. The Ten Years of Prosperity plan envisages "free economic zones, joint enterprises,and a broadening of entrepreneurship."

Foreign investors have been attracted by the republic's calm and receptive atmosphere. In 1993parts of the country took on the appearance of a huge construction site, with twenty-six foreignjoint ventures operating there. Turkish joint ventures alone were building sixty factories for theprocessing of agricultural produce. Despite official discouragement of economic activity on the

grounds of human rights violations in Turkmenistan, United States business people have beenattracted by the republic's stable conditions, and they have invested in a number of significantprojects. In the early 1990s, United States companies paid particular attention to the oil and gasindustry, establishing investment agreements with the consultative aid of former United Statessecretaries of state Alexander Haig and James Baker.


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Economic Agreements Abroad

In the formative phase following independence, Turkmenistan concluded several key agreementswith trade partners. In December 1991, President Niyazov became the first Central Asian leaderto secure cooperation agreements with Turkey on trade, rail and air links, communications,

education, and culture. Turkmenistan also secured Turkey's agreement on a gas pipeline routedthrough its territory and assistance in the trading of petroleum, electricity, and cotton. Also in1991, Turkmenistan established terms with Russia on cotton-for-oil trades, as well as for otherindustrial goods such as automobiles. In 1992 agreements with Iran established Iranian aid toTurkmenistan's gas and oil industry and its livestock raising, grain, sugar beet, and fruit sectors,in return for aid to Iran's cotton sector. At the same time, Iran pledged support forTurkmenistan's pipeline project through Iran to Turkey.

Since its initial agreement, Turkmenistan has pursued its trade relationship with Iran with greatvigor. Agreements focus on the pipeline project that will bring gas from Turkmenistan to Europevia Iran and Turkey, transportation projects such as the Tejen-Saragt-Mashhad railroad link,

whose construction was undertaken in 1993, and development of the oil and gas industries,including the establishment of a joint venture in Turkmenistan for the transport of petroleumproducts and construction of a plant to produce motor oil. Cooperation in mining and other fieldsalso has been discussed.

At the beginning of 1992, Turkmenistan, Iran, Azerbaijan, Russia and Kazakstan formed theCaspian States Cooperation Organization to reach regional agreements on fishing, shipping,environmental protection, and cooperation among the member nations' oil and gas operations.Iran also has sought to gain support for a project, discontinued in 1979, that would replenish thesturgeon population of the Caspian Sea.

The participation of foreign companies in the development of Turkmenistan's oil industry isexpected to triple extraction by the year 2000. In February 1993, the United States firm Vivtexdesigned a competition among oil companies to win contracts in Turkmenistan. The "winners"for three of the seven blocks put up for bid were Larmag Energy of the Netherlands, NobleDrilling of the United States, Eastpac of the United Arab Emirates, and the Bridas firm ofArgentina. Just for holding the competition, Turkmenistan received an initial non-returnable"bonus" payment of US$65 million. The total investment of competition winners was to amountto US$160 million over the course of three years. Turkmenistan would receive between 71 and75 percent of the profits from these joint enterprises.

In the mid-1990s, Turkmenistan has sought to establish a natural gas pipeline that would pass

through Afghanistan, Pakistan, and China to reach Japan, as well as an interim rail line forliquefied gas through China until the pipeline is finished. President Niyazov visited Beijing inNovember 1992 for talks on the pipeline, at the same time securing credits of 45 million Chineseyuan to be repaid after two years. Niyazov then held talks with representatives of the Japanesefirm Mitsubishi and the Chinese Ministry of Oil in December 1992. A delegation of Japaneseexperts visited Ashgabat in February 1993 to discuss prospects for aid. Declaring Turkmenistanthe "most solvent" of the Central Asian republics, the delegation signed agreements for thedevelopment of oil deposits in the Caspian shelf, communications, and water desalinization.


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In the mid-1990s, the International Monetary Fund (IMF) denied assistance to Turkmenistan onthe grounds that Turkmenistan has not taken the required human rights steps for economiccooperation. However, in March 1993, the United States conferred most-favored-nation tradingstatus on Turkmenistan.

Other statistics

Household income or consumption by percentage share:

lowest 10%: 2.6% highest 10%: 31.7% (1998)

Industrial production growth rate: official government estimate: 22% (2003 est.)

Electricity:

production: 11.41 TWH(2004 est.) consumption: 8.847 TWh (2002) exports: 1.136 TWh (2004) imports: 0 kWh (2002)

Electricity - production by source:

fossil fuel: 99.9% hydro: 0.1% nuclear: 0% other: 0% (2001)

Agriculture - products: cotton, grain; livestock

Main article:Agriculture in Turkmenistan

Debt - external: $2.4 billion to $5 billion (2001 est.)

Exchange rates: Turkmen manats per US$1 - 5,200 (January 2000), 5,350 (January 1999),4,070 (January 1997), 2,400 (January 1996)

in recent years the unofficial rate has hovered around 24,000 to 25,000 Turkmen manats to the

dollar. The official rate has consistently been 5,200 Manat to the dollar.


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Reference:

1. www.wikipedia.com

2. www.nationsencyclopedia.com

3. Trade.ec.europa.eu

4. countrystudies.us/turkmenistan
http://www.wikipedia.com/http://www.nationsencyclopedia.com/http://www.wikipedia.com/http://www.nationsencyclopedia.com/

potentiality of republic of turkmenistan

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