Economical overview
Turkmenistan's economy is based on the
production of oil, natural gas and cotton. The income
from gas exports in particular is large, but the wealth
is distributed unequally among the residents. Partly as
a legacy of the Soviet era, the economy is largely
state-controlled but privatizations are ongoing,
especially in the service sector.
Turkmenistan is one of the world's largest producers
of natural gas, and the country also has significant oil
production. Through the gas pipelines built during the
Soviet era (c. 1920–1991), Turkmenistan was long able to
export gas only to Russia, Ukraine, Georgia and Armenia.
To reduce its dependence on Russia in particular,
Turkmenistan has built gas pipelines to Iran, China,
Turkey (via Azerbaijan and Georgia) since the end of the
1990s, and from there to the EU. A pipeline is being
built to Afghanistan, Pakistan and India (see Natural
Resources, Energy and Environment).
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Countryaah.com:
Major imports by Turkmenistan, covering a full list of top products imported by the country and trade value for each product category.
Cotton production has had serious problems.
Turkmenistan was formerly one of the world's largest
cotton producers, but the harvest fell in 1995-2005. The
yield then increased again and the cotton industry is
being modernized so that more cotton can be processed in
the country.
Privatizations are ongoing
The state controls most of the economy. After
independence from the Soviet Union in 1991, market
economy reforms began, but they started later in
Turkmenistan than in other former Soviet republics. It
was not until 1995 that the state released some control
over pricing. At the same time, a number of
privatizations were carried out by small businesses in
the service sector, and agricultural land was leased to
private farmers. It also became easier for foreign
investors to invest in the country. But sales of larger
state-owned companies were slow. The important oil and
gas industry is still state-owned.
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Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including TKM which represents the country of Turkmenistan.
When President Berdimuhamedow took office in 2007, he
announced that market economy reforms would be
accelerated. In 2008, the Constitution stated that
Turkmenistan is a market economy where private ownership
is respected. The government set ambitious privatization
targets, but even today most of the economy is state
controlled.
Large subsidies on basic commodities and other state
control of the economy caused Turkmenistan to receive
support from the IMF only in 2010. Another reason why
the IMF is cautious is the major democratic deficiencies
in the country. The World Bank only provides smaller
loans and limited support to Turkmenistan for the same
reasons. The European Development Bank (EBRD) has lent
money on a small scale, as has the Asian Development
Bank (ADB). Turkmenistan receives criticism for spending
a lot of money on the boastful buildings such as
beautiful airports, eight-lane highways and major sports
arenas.
Economic crisis
The large mineral resources meant that Turkmenistan
had a high economic growth until 2014 when the prices of
oil and natural gas fell. The country quickly entered
into an economic crisis. The government again talked
about speeding up privatizations and in 2015 devalued
its own currency, the manate, by 19 percent against the
dollar. This meant rising inflation and sharp increases
in fuel and food prices. At the same time, the
government was forced to step up until 2019 to abolish
subsidies on electricity, water, gas and some basic
foodstuffs (such as salt, wheat flour) for households.
At the end of the 2010s, reports of lack of certain
foods, such as flour, came and social unrest increased.
The Russian state-owned company Gazprom ceased to buy
Turkmen gas in 2016 and the following year a conflict
over the payment of gas supplies led to the shutdown of
the gas taps to Iran. Turkmenistan then became highly
dependent on gas imports to China (now 90 percent of the
gas is sold to China). In the spring of 2019, Russia
began to buy gas again, after three years of disruption,
and in the fall of that year President Berdimuhamedow
ordered that the entire state-owned transport sector be
sold out.
Statistics on Turkmen foreign trade are uncertain,
but oil and gas exports are estimated to account for as
much as 80–90 percent of the export value. The remainder
is mainly cotton exports. Turkmenistan also sells
electricity and textiles abroad.
FACTS - FINANCE
GDP per person
US $ 6,967 (2018)
Total GDP
US $ 40,761 million (2018)
GDP growth
6.2 percent (2018)
Agriculture's share of GDP
8.9 percent (2017) 1
Manufacturing industry's share of GDP
60.2 percent (2017) 2
The service sector's share of GDP
30.9 percent (2017) 3
Inflation
13.4 percent (2019)
Government debt's share of GDP
29.1 percent (2018)
External debt
US $ 781 million (2017)
Currency
urged
Commodity trade's share of GDP
31 percent (2018)
Main export goods
natural gas, oil, cotton
Largest trading partner
China, Turkey, Germany, Russia, USA (2017)
- source UN
2. source UN
3. source UN
2007
July
Agreement on new international gas pipeline
Russia, Kazakhstan and Turkmenistan agree to jointly build a new pipeline for
natural gas to be drawn north of the Caspian Sea. With the help of the
management, deliveries of Turkmen gas to Russia will be easier and safer.
March
Suspended pensions must be paid out
President Berdimuhamedow decides that the approximately 100,000 senior
citizens who have received their pension withdrawn by Nijazov will once again
start getting their money paid. He also decides that the Internet should become
more accessible to citizens.
February
Berdimuhamedow becomes new president
February 14th
As expected, President-elect Berdimuhamedow wins the re-election to the
presidency. He wins with just over 89 percent of the vote, according to the
Election Commission, which sets the turnout to 98.6 percent. No opposition
candidates are allowed to stand in the elections. In President Berdimuhamedow's
new government, several of Nijazov's old ministers have been replaced by new
politicians from the ruling Turkmenistan Democratic Party.
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