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Economy of Turkmenistan

Turkmenistan is an important supplier of raw materials, especially natural gas, petroleum products, and raw cotton. With the estimated 2009 harvest of about 823,000 tons, Turkmenistan is the second-largest cotton producer in the former Soviet Union after Uzbekistan. However, the crop yield has been steadily declining since independence because of poor irrigation and management practices.

Outside estimates place Turkmenistan's proven natural gas reserves of 7.94 trillion cubic meters (tcm) among those of the top four of gas-producing countries. A 2008 audit conducted by the British firm Gaffney, Cline and Associates concluded that the three most significant gas fields in the country, Yoloten, Osman, and Yashlar, hold between 4.25 and 15.5 tcm of natural gas.

In 2008, Turkmenistan was the second-largest gas producer in the former Soviet Union after Russia with estimated production around 70 billion cubic meters (bcm). Turkmenistan’s 2009 production declined to about 34 bcm. Gas production declined significantly when exports to Russia stopped on April 9, 2009, following a blast on the Central Asia-Center gas pipeline. Gas exports to Russia resumed at a reduced level (approximately 10.5 bcm/year) and price in January 2010.

Since the end of 2009, Turkmenistan has been exporting natural gas in three directions: to Russia, Iran, and China. In 2010, exports to Russia are projected to total 10-11 bcm, which will be exported through the old pipeline system built during the Soviet era. Gas exports to Iran will reportedly reach 7-8 bcm in 2010. Turkmen gas to Iran will be exported through two pipelines: Korpeje-Kurtkuyi (built in 1997) and Dowletabat-Sarakhs-Khangiran (built in 2009). The total capacity of the two pipelines is 25 bcm per year, which provides room for further increase of exports in the future. At the end of December 2009, Turkmen gas started flowing to China through the newly built Turkmenistan-Uzbekistan-Kazakhstan-China gas pipeline (Central Asia-China pipeline). Turkmen gas exports to China are most likely to total 3-4 bcm in 2010. Turkmenistan and China plan to boost gas supplies to 40 bcm by 2014-2015 when the pipeline reaches full capacity.

Turkmenistan's 2009 oil production was about 10.3 million tons and will most likely total 10.4 million tons in 2010. Turkmenistan refines almost all of its oil inside the country and exports only petroleum products such as liquefied petroleum gas (LPG) and polypropylene.

Turkmenistan has taken a cautious approach to economic reform, hoping to use natural gas export revenues to sustain inefficiencies in its economy. The disruption of Turkmen gas exports to Russia in 2009 and the current decreased global natural gas demand demonstrated the heavy dependence of the Turkmen economy on gas exports. There are now signs that Turkmenistan is experiencing a shortage of hard currency reserves. The current foreign debt is estimated to be $5 billion. The private sector remains underdeveloped, with activity primarily in the food processing, consumer trade, and services sectors. In addition, Turkmenistan's statistics are closely held state secrets, and published GDP and other figures are subject to wide margins of error. Turkmenistan's goal of agricultural "self-sufficiency" artificially sustains the cultivation of inefficient crops, such as wheat and cotton. The 2006 UN Development Program (UNDP) Human Development Report placed Turkmenistan in the category of "medium human development" although unemployment and underemployment rates may be as high as 70%. Turkmenistan continues to cooperate with the international community to transport humanitarian aid to Afghanistan.

Economy (2009 est.)
GDP (PPP - purchasing power parity): $16.24 billion (Government of Turkmenistan report).
GDP per capita (PPP, est.): $3,248.
GDP real growth rate (Government of Turkmenistan estimate): 6.1%.
Inflation rate: 13%.
Agriculture: Products--cotton, grain, livestock, fruit and vegetables.
Industry: Types--natural gas, oil, petroleum products, textiles, food processing.
Trade (2008 est.): Exports ($11.92 billion)--gas 50%, oil and oil products 32%, cotton 2%. Partners--Russia, Iran, Italy, Turkey. Imports ($5.67 billion)--manufactured goods 65%, consumer goods 34%. Partners--Turkey, Russia, Ukraine, U.A.E., China, United States. Debt, external: Reported $4 billion to the Chinese Development Bank; $1 billion to Islamic Development Bank.

Geography of Turkmenistan

Location: Central Asia, bordering the Caspian Sea, between Iran and Kazakstan
Geographic coordinates: 40 00 N, 60 00 E
Map references: Commonwealth of Independent States
Area:
total area: 488,100 sq km
land area: 488,100 sq km
comparative area: slightly larger than California
Land boundaries:
total: 3,736 km
border countries: Afghanistan 744 km, Iran 992 km, Kazakstan 379 km, Uzbekistan 1,621 km
Coastline: 0 km
note: Turkmenistan borders the Caspian Sea (1,768 km)
Maritime claims: none (landlocked)
International disputes: Caspian Sea boundaries are not yet determined
Climate: subtropical desert
Terrain: flat-to-rolling sandy desert with dunes rising to mountains in the south; low mountains along border with Iran; borders Caspian Sea in west
lowest point: Sarygamysh Koli -110 m
highest point: Ayrybaba 3,139 m
Natural resources: petroleum, natural gas, coal, sulfur, salt
Land use:
arable land: 2%
permanent crops: 0%
meadows and pastures: 69%
forest and woodland: 0%
other: 29%
Irrigated land: 12,450 sq km (1990)
Environment:
current issues: contamination of soil and groundwater with agricultural chemicals, pesticides; salinization, water-logging of soil due to poor irrigation methods; Caspian Sea pollution; diversion of a large share of the flow of the Amu Darya into irrigation contributes to that river's inability to replenish the Aral Sea; desertification
natural hazards: NA
international agreements: party to - Ozone Layer Protection; signed, but not ratified - Climate Change, Desertification
Geographic note: landlocked

 

Government of Turkmenistan

GOVERNMENT AND POLITICAL CONDITIONS Although the constitution declares the country to be a secular democracy and presidential republic, Turkmenistan is an authoritarian state that was dominated by its first president, Saparmyrat Niyazov, who retained his monopoly on political power until his death on December 21, 2006. The Halk Maslahaty (People's Council) decided on December 26 to select Niyazov's successor through public elections on February 11, 2007. Gurbanguly Berdimuhamedov became president through a public election in which the population eagerly participated, even though the election did not meet international standards. Government efforts continue to focus on fostering centralized state control. The president controls the parliament and the judiciary. The civilian authorities maintain effective control of the security forces. Neither independent political activity nor opposition candidates are allowed in Turkmenistan. The Democratic Party of Turkmenistan (DPT) is the only legal political party. Political gatherings are illegal unless government-sanctioned, and the citizens of Turkmenistan do not have the means to change their government democratically. On November 25, 2002, an armed attack against then-President Niyazov's motorcade occurred, and the Government of Turkmenistan moved quickly against perceived sources of opposition. There were widespread reports of human rights abuses committed by officials investigating the attack, including torture and punishment of families of the accused. The Government of Turkmenistan denied the charges, but refused to allow independent observers at trials, to accept a mandatory Organization for Security and Cooperation in Europe (OSCE) fact-finding mission, or to permit the International Committee of the Red Cross (ICRC) access to prisons. It also instituted new measures to stifle dissent and limit contact with the outside world. While the constitution provides for freedom of the press, there is virtually no freedom of the press or of association. The government has full control of all domestic media and restricts foreign publications. International satellite TV is widely available. The population is 89% Sunni Muslim. The constitution provides for freedom of religion and does not establish a state religion; however, in practice, the government continues to monitor all forms of religious expression. Amendments to the law on religious organizations adopted in March 2004 reduced membership requirements from 500 to 5 for registration purposes. All groups must register in order to gain legal status with the government. Until 2004 the only religions that were registered successfully were Sunni Islam and Russian Orthodox Christianity. As of August 2010, 11 other religious groups were registered. The government limits the activities of unregistered religious congregations by prohibiting them from gathering publicly, proselytizing, and disseminating religious materials. The government has started to review and rewrite its legislation with the stated goal of meeting international standards, including the criminal and criminal procedures codes and laws on religion and assembly. In late September 2008, a revised national constitution was adopted. It included provisions for a strengthened and enlarged Mejlis (parliament), eliminated many of former President Niyazov's arbitrary addenda, and contained some rights-related textual changes the international community had suggested. Most notably, it eliminated the Halk Maslahaty (Peoples Council), an oversized, bureaucratic, and largely rubber-stamp body whose powers have largely been transferred to the Mejlis. A legacy of a Soviet-style command economy greatly limits equality of opportunity. Industry is almost entirely dominated by government or government-owned entities. Services are now largely in the private sector. Agriculture is dominated by a state order system, mainly for wheat and cotton, although about 50% of food production is in private hands. In 2007, a law on state guarantees of the equal rights of women was adopted. Nonetheless, women continue to face discrimination, and their freedom is further restricted due to traditional socio-religious norms. All citizens are required to carry internal passports, noting place of residence. In July 2007, the government rescinded the requirement for citizens to acquire visas for travel to border areas. Corruption is pervasive. Power is concentrated in the president. The judiciary is subservient to the president, with all judges appointed for 5-year terms by the president without legislative review. Principal Government Officials President--Gurbanguly Berdimuhamedov Foreign Minister--Rashid Meredov Ambassador to the United States--Meret B. Orazov Turkmenistan maintains an embassy at 2207 Massachusetts Avenue NW, Washington, DC 20008; tel: (202) 588-1500; fax: (202) 280-1003; website: http://www.turkmenistanembassy.org/ Type: Republic. Independence: October 27, 1991 (from the Soviet Union). Constitution: May 18, 1992. Last amended September 26, 2008. Branches: Executive --President. Legislative --Mejlis (Parliament). Judicial --Supreme Court. Administrative subdivisions: 5 Welayats (provinces)--Ahal Welayat (Ashgabat), Balkan Welayat (Balkanabat), Dashoguz Welayat (formerly Dashowuz), Lebap Welayat (Turkmenabat, formerly Chardjou/Charjew), Mary Welayat. Political parties: Democratic Party of Turkmenistan (opposition parties are outlawed).

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History of Turkmenistan

The territory of Turkmenistan has been populated since ancient times, as armies from one empire to another decamped on their way to more prosperous territories. Tribes of horse-breeding Turkmen drifted into the territory of Turkmenistan from ancient times, possibly from the Altay Mountains, and grazed along the outskirts of the Karakum Desert into Persia, Syria, and Anatolia. Alexander the Great conquered the territory in the 4th century B.C. on his way to India. One hundred fifty years later the Parthian Kingdom took control of Turkmenistan, establishing its capital in Nisa, an area now located in the suburbs of the modern-day capital of Ashgabat. In the 7th century A.D. Arabs conquered this region, bringing with them the Islamic religion and incorporating the Turkmen into Middle Eastern culture. It was around this time that the famous "Road" was established as a major trading route between Asia and Europe. In the middle of the 11th century, the powerful Turks of the Seljuk Empire concentrated their strength in the territory of Turkmenistan in an attempt to expand into Afghanistan. The empire broke down in the second half of the 12th century, and the Turkmen lost their independence when Genghis Khan took control of the eastern Caspian Sea region on his march west. For the next seven centuries, the Turkmen people lived under various empires and fought constant intertribal wars. From the 16th century on, Turkmen raiders on horseback preyed on passing caravans, pillaging and taking prisoners for the slave trade. In order to consolidate the Tsarist Empire in Central Asia, and upon the pretext of freeing Russian citizens from slavery, Russia sent forces to Turkmenistan, and in 1881 fighting climaxed with the massacre of 7,000 Turkmen at the desert fortress of Gokdepe, near modern Ashgabat; another 8,000 were killed trying to flee across the desert. By 1894 imperial Russia had taken control of Turkmenistan. The October Revolution of 1917 in Russia and subsequent political unrest led to the declaration of the Turkmen Republic as one of the 15 republics of the Soviet Union in 1924. At this time the modern borders of Turkmenistan were formed. The Turkmen Republic was under full control of Moscow, which exploited its raw material resources for the purposes of the Soviet Union. Sovereignty was only a formality since Russia ultimately ruled all Soviet states. Following the end of the Cold War and the breakup of the Soviet Union, Turkmenistan declared its independence on October 27, 1991. Saparmyrat Niyazov became the first president of the new republic and remained the supreme decision-maker, "president for life," until his death in 2006.

People of Turkmenistan

The majority of Turkmenistan's citizens are ethnic Turkmen; other ethnic groups include Russian, Uzbek, and Kazakh. Turkmen is the official language of Turkmenistan, though Russian still is widely spoken as a "language of inter-ethnic communication" (per the 1992 constitution). Education is universal and mandatory through the secondary level, the total duration of which is 10 years. The territory of Turkmenistan has been populated since ancient times, as armies from one empire to another decamped on their way to more prosperous territories. Tribes of horse-breeding Turkmen drifted into the territory of Turkmenistan, possibly from the Altay Mountains, and grazed along the outskirts of the Karakum Desert into Persia, Syria, and Anatolia. Alexander the Great conquered the territory in the 4th century B.C. on his way to India. One hundred fifty years later the Parthian Kingdom took control of Turkmenistan, establishing its capital in Nisa, an area now located in the suburbs of the modern-day capital of Ashgabat. In the 7th century A.D. Arabs conquered this region, bringing with them the Islamic religion and incorporating the Turkmen into Middle Eastern culture. It was around this time that the famous "Silk Road" was established as a major trading route between Asia and Europe. In the middle of the 11th century, the powerful Turks of the Seldjuk Empire concentrated their strength in the territory of Turkmenistan in an attempt to expand into Afghanistan. The empire broke down in the second half of the 12th century, and the Turkmen lost their independence when Genghis Khan took control of the eastern Caspian Sea region on his march west. For the next seven centuries, the Turkmen people lived under various empires and fought constant intertribal wars. From the 16th century on, Turkmen raiders on horseback preyed on passing caravans, pillaging and taking prisoners for the slave trade. In order to consolidate the Tsarist Empire in Central Asia, and upon the pretext of freeing Russian citizens from slavery, Russia sent forces to Turkmenistan, and in 1881 fighting climaxed with the massacre of 7,000 Turkmen at the desert fortress of Geok Depe, near modern Ashgabat; another 8,000 were killed trying to flee across the desert. By 1894 imperial Russia had taken control of Turkmenistan. The October Revolution of 1917 in Russia and subsequent political unrest led to the declaration of the Turkmen Republic as one of the 15 republics of the Soviet Union in 1924. At this time the modern borders of Turkmenistan were formed. The Turkmen Republic was under full control of Moscow, which exploited its raw material resources for the purposes of the Soviet Union. Sovereignty was only a formality since Russia ultimately ruled all Soviet states. Following the end of the Cold War and the breakup of the Soviet Union, Turkmenistan declared its independence on October 27, 1991. Saparmyrat Niyazov became the first president of the new republic and remained the supreme decision-maker, "president for life," until his death in 2006. Nationality: Turkmenistani. Population (July 2009 est.): 4,884,887. Population growth rate (2009 est.): 1.14%. Ethnic groups (2003 est.): Turkmen 85%, Uzbek 5%, Russian 4%, other 6%. Religion: Muslim 89%, Eastern Orthodox 9%, unknown 2%. Language: Turkmen 72%, Russian 12%, Uzbek 9%, other 7%. Education (2002 est.): Literacy--98.8%. Health (2009 est.): Infant mortality rate--45.36/1,000. Life expectancy--67.87 years.
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