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Turkmen Report: November 18, 2000


18 November 2000
NATIONAL AND REGIONAL NEWS

16 November 2000

Palatial Residence Confiscated?
An unconfirmed report from Ashgabat indicates a posh dwelling built by Saparmurat Nuriev, former Deputy Prime Minister and Power Engineering Minister has been confiscated. The structure reportedly has transferred to the country's top mufti, Ibabullakh. (RFE/RL)


15 November 2000

New Construction for Ashgabat
The Ashgabat city administration has inked deals with Bouygues of France and Polimeks of Turkey to construct several buildings in the Turkmen capital. The contract was concluded after Turkmen President Saparmurat Niyazov signed a resolution outlining the construction of important architectural sites in the country's capital. The resolution provides for building an FRF 190 million, 2-storey building for official receptions, a FRF 417.9 million, 17-storey President Hotel and a $6.7 million, 7-storey building to house the state archives. In addition, a 13-storey FRF 304 million building will be built for Turkmenistan's Central Bank. State oil and gas concern Turkmenneftegazstroi, however, will dominate the skyline with the planned construction of a 25-storey FRF 456 million office building. (Interfax)

January-October Budget Surplus
Turkmenistan enjoyed a budget surplus of 205.9 billion manat, or 1.03% of GDP, in the first ten months of 2000, according to the National Institute for Government Statistics and Information. Budget revenues and spending totaled respectively 4.701 trillion and 4.495 trillion manat in the ten months, respectively 2% and 16% less than the targets for the period. GDP measured 20 trillion manat in the ten months of the year. (Interfax)

Niyazov: Parliament to Control Executive Agencies
Turkmen President Saparmurat Niyazov has said he will give more power to parliament, namely the power to control executive bodies, in future. Niyazov was speaking at a ceremony of laying the foundation stone of a new parliament building, to be built by French firm Bouygues, in Ashgabat on 14 November. "Sometime in 2007-2008 I will give the Mejlis, in addition to its current power to make laws, the power to control executive bodies," Niyazov said. (Turkmen Radio)


14 November 2000

Non-Military Personnel Cuts Awaited
Turkmen President Saparmurat Niyazov plans cuts in the personnel of what he described as overstaffed state-run enterprises in 2001. An estimated 10,000 will be made redundant from the Ministry of Education. Cutbacks in the health and industry ministries are also expected, with 11,000 doctors and mid-level personnel to be sacked beginning January 1. Cuts in administrative personnel from all but the defense ministry and border troops aim to allow the government to increase the salaries of workers at state-run organizations. (Interfax)

Japan's Itochu to Supply Road-Building Equipment
Turkmen President Saparmurat Niyazov signed a resolution that clears the way for Japan's Itochu to supply Turkmenistan's national road concern, Turkmenavtoellary, with 1.154 billion yen in road-building equipment. The equipment will be supplied under a five-year credit from Itochu guaranteed by the Turkmen government. The resolution approves the contract and exempts Turkmenavtoellary and Itochu from all taxes, levies, excises and duties related to the delivery of the equipment, spare parts and related supplies. (Interfax)

Gas Sale Agreement with Russia?
Turkmen President Saparmurat Niyazov announced that his country has reached agreement with Russia's Gazprom to sell 30 billion cubic meters of natural gas to Russia in 2001. The price Russia will pay was not disclosed. (Wall Street Journal. See full article below)

EBRD: Abandon Soviet-style Investment Plans
The European Bank for Reconstruction and Development (EBRD) has issued a highly critical assessment of Turkmenistan's economic progress as part of its Transition Report 2000. The report says Turkmenistan has made little headway toward a market economy and urges Turkmen President Saparmurat Niyazov to abandon what the bank terms "Soviet-style investment plans (RFE/RL)


13 November 2000

Cross-Border Power Link
Turkmen state power concern Turkmenenergogurlushyk completed the installation of a 13-km power transmission line and 5 substations in the northern Afghan town of Andkhoy, allowing Turkmen electricity to reach northwestern Faryab province. The company is presently constructing a new 17-km power transmission line connecting Seydi power station in eastern Turkmenistan with the Shatlyk substation at Eljik which will connect the whole of Lebap Province with Turkmenistan's electricity grid. (Turkmen State News Service)

Gas Debt Collection Strategy?
In an effort to collect unpaid debts for gas supplied to Kazakstan and Azerbaijan, Turkmenistan is planning to take firm measures such as taking the cases to an arbitration court or selling the debts to a third party. Ashgabat terms these measures as needed because neither debtor has made any serious effort to settle their debts. Turkmenistan contends Azerbaijan owes $59.9 million for gas supplied in 1993-1994. Kazakstan, for its part, owes $57.8 million for gas supplied in 1994. (Turkmen State News Service)


12 November 2000

Cotton Crop below Target
Speaking on national television, President Niyazov castigated regional governors and government officials for a 20 percent shortfall in this year's cotton harvest. The total yield this year was 1.03 million tons, 20 percent short of last year's figure of 1.3 million tons. Niyazov said that weather conditions were not to blame for the disappointing harvest. He warned that "everyone will be held responsible." (Reuters)


10 November 2000

Niyazov on National Economy
Speaking at a cabinet meeting, Turkmen President Saparmurat Niyazov noted that in the first 10 months of 2000, GDP rose by 16.9% on the same period a year prior. GDP totaled 20,000 billion manats of which industry accounts for 13,000 billion manats and agriculture, with its subsidiary sectors, for 7,000 billion manats. He described the performance of most sectors, such as textiles and oil and gas as "successful," but identified failures in six unidentified sectors. He singled out for criticism the performance of Turkmenhaly (Turkmen carpets) and Turkmen railways. Revenue from taxes are slated to provide 6,000 billion manats out of the estimated 28,000 billion manat annual budget. Foreign trade turnover for the 10-month period was $3.07 million. Niyazov also pledged to allocate $70 million to build substations and "radically improve" Ashgabat city's electric power system. The funds for doing so are to come from gas exports. (Turkmen Television Channel 1)

FEATURES AND ANALYSES
Turkmenistan-Russia Gas Deal Negates U.S.-Backed Pipe Plan
14.November 2000

By James M. Dorsey

Special to THE WALL STREET JOURNAL

Turkmenistan President Saparmurat Niyazov appears to be squashing U.S.-backed efforts to ensure that Caspian Sea gas is exported to world markets through Turkey rather than through Russia.

After months of negotiations, Mr. Niyazov told a cabinet meeting broadcast on state television Sunday that he has reached agreement with Russian gas monopoly OAO Gazprom to sell it as much as 30 billion cubic meters of natural gas next year. The deal would account for most of Turkmenistan's gas exports.

As a result, the deal would render as uneconomical the proposed $2 billion (2.32 billion euro), U.S.-backed trans-Caspian pipeline from Turkmenistan via Azerbaijan and Georgia to Turkey. A consortium that includes Royal Dutch/Shell Group and U.S. contractor Bechtel Group Inc. had hoped to build the structure. The pipeline constitutes a key element of the US's strategy to make Turkey rather than Russia the focal point of energy exports from the former Soviet republics bordering the Caspian.

Cash-strapped Turkmenistan has delivered 20 billion cubic meters of gas so far this year to Russia and has contracted to sell another 10 billion before the end of the year. That doesn't include the gas from the deal announced Sunday. Turkmenistan also has a deal to supply 30 billion cubic meters of gas next year to Ukraine at a price of $40 per thousand cubic meters.

Turkmenistan and Russia, Turkey's largest supplier of natural gas, have been negotiating for months over the price of the gas the Central Asian republic would sell, but had been unable to reach an agreement. Western diplomats and oil industry executives say Mr. Niyazov's statement indicates that agreement over the price has been achieved, though no price was disclosed Sunday.

Russia had already won a strategic advantage in the pipeline battle because its project, dubbed Blue Stream, is further advanced than the trans-Caspian pipeline plan. Construction has already begun on Blue Stream, a joint venture between Gazprom and Italy's Eni SpA to lay a gas pipeline with a capacity of 16 billion cubic meters a year under the Black Sea that would link the Russian and Turkish coasts.

Azerbaijan Nears Accord With Russia On Caspian Sea
November 14, 2000

By Michael Lelyveld, for RFE/RL

Azerbaijan appears to be moving closer to an agreement with Russia on dividing the resources of the Caspian Sea. The question is what Baku will receive in return.

Last week during an energy conference in Baku, Azerbaijani and Russian officials said they expect to resolve their differences on a legal division of the Caspian in time for an upcoming visit of President Vladimir Putin to Azerbaijan.

Speaking at a meeting with Russia's Caspian envoy Viktor Kalyuzhny, President Heidar Aliyev said, "We hope to finalize the Azerbaijani and Russian positions on this issue."

Kalyuzhny echoed Aliev's remarks, saying, "Russia and Azerbaijan have reached a greater understanding on the Caspian status." According to the Russian news agency Interfax, officials expect to sign a declaration on Caspian cooperation, similar to one reached between Russia and Kazakhstan last month.

Although one report by Azerbaijan's ANS television tried to suggest that the country's position remained "unchanged," it also said Moscow was pleased and satisfied with Baku's Caspian stand. The positive tone was in obvious contrast to frictions over the issue earlier this year.

The new turn in Russian-Azerbaijani relations, at least on the Caspian question, appears to be part of Putin's recent campaign to settle the legal problem among the five shoreline states. The lack of an agreement on boundaries, navigation and development rights has complicated the outlook for oil investment and pipelines ever since the Soviet breakup.

Since this summer, Putin's formula has called for dividing the Caspian seabed into national sectors while keeping the water and its surface in common. In addition, any oilfields on disputed borders would be shared by countries with competing claims. If Azerbaijan agrees, Russia will have lined up three of the five littoral nations behind its approach, leaving Iran and Turkmenistan opposed. Tehran has been seeking a 20 percent share of the Caspian. Ashgabat has indicated that it will not support a formula that does not receive backing from Tehran.

On Sunday, the spokesman for Iran's Foreign Ministry, Hamid-Reza Asefi, issued a cautionary statement aimed at Russia, saying, "Caspian Sea littoral states should make efforts to tighten bilateral ties and prevent any action which would undermine the amicable relations between the neighbors."

Asefi was reacting to Kalyuzhny's comments in Baku last week, charging that Iran has delayed a meeting of the leaders of the Caspian states. Kalyuzhny effectively laid down a deadline, saying, "If in the next ten days Iran does not change its stance on this problem, Russia will propose again to hold a working meeting in Moscow on problems of the Caspian Sea."

Asefi responded that "The remarks made by the Russian special envoy on Iran's stance towards the Caspian Sea legal status contradicts the spirit of understanding and cooperation among the littoral states, specially Iran-Russian bilateral ties." The conflict was a clear step back from President Mohammed Khatami's conciliatory remarks last month after a flurry of diplomatic exchanges with Moscow. Khatami then called the Iranian and Russian positions "close." Judging by the latest statements, they are again far apart.

Whatever the outcome with Iran, the growing agreement between Russia and Azerbaijan could yield results, although it seems too soon to say how much Baku stands to gain. Russia originally raised the division issue in September 1994, when it challenged the legality of Azerbaijan's first offshore development contract, known as the "deal of the century."

Since then, it has tacitly recognized the contract and has instead shifted its pressure to make Azerbaijani oil flow over Russian export routes. Most recently, Moscow stepped up its pressure by threatening to fine Azerbaijan for not pumping enough oil through a Russian pipeline to meet the terms of a 1996 contract. Baku has since agreed to buy gas from Russia so that it can replace the oil it uses domestically, freeing up more oil for the Russian route.

Kalyuzhny's comments last week seem to suggest that this issue is still on Russia's mind. Kalyuzhny said that if Azerbaijan joins the "common energy balance" that Russia has already formed with Belarus, Ukraine and Kazakhstan, then "it will remove the headache over regular energy transportation between the two countries," Itar-Tass reported. But it is unclear whether Kalyuzhny means that Moscow would drop its opposition to Baku's plans for a U.S.-backed pipeline to the Turkish port of Ceyhan.

The Caspian envoy seemed to hint that there could be other benefits for Azerbaijan. It outlining Russia's proposals for a Caspian settlement, Kalyuzhny described a more complicated formula than the one described over the summer. According to the Russian news agency Interfax, Kalyuzhny called for a modified middle line to separate "deposits and promising oil and gas areas, instead of territories." The line would not be a state border, but it would set the jurisdiction over minerals by coastal states, he said.

The latest version of Russia's proposal could favor Azerbaijan in its long-running dispute with Turkmenistan over a major oilfield in the center of the Caspian. Azerbaijan calls the oilfield Kyapaz, while Turkmenistan calls it Serdar.

If Moscow is signaling that it will support Baku's claim in exchange for its agreement with Russia's position, it may also be a warning to Turkmenistan that it may pay a political price for siding with Iran.

It remains to be seen whether Kalyuzhny's suggestions reflect Putin's strategy. But if they do, the balance could be shifting in the debate over the Caspian Sea.

Turkmenistan To Check Ancestry Of Would-Be Officials
17 November 2000

AP, ASHGABAT, Turkmenistan

Upset over sloppy government work, the president of this remote, desert Central Asian nation will now check the ancestry of prospective state officials before making appointments.

Family backgrounds of wives of would-be officials will also be checked, President Saparmurat Niyazov said in remarks carried Thursday on Turkmen state television. The checks will go back three generations.

He did not mention the possibility of a woman being considered as a prospective official, as women in conservative Turkmenistan hold almost no government jobs.

"We are addressing the experience of our ancestors, who chose their leaders, military commanders and judges from among the worthiest compatriots with high moral standards," he said.

He did not say what family background would exclude a person from government work.

Niyazov was raised in an orphanage after most of his family died in an earthquake in 1948. He ruled Turkmenistan in Communist times, and since independence in 1991 has combined a Soviet-style cult of personality with elements of the traditional khans who led Central Asia in past centuries.

He has built elaborate palaces for himself and was appointed president for life in December 1999 by parliament. Wall-size portraits of his face are hung in public places. A city, an oil refinery and a meteorite that fell on his country have been named after him.

The decision to toughen appointment requirements apparently reflected Niyazov's anger over Turkmenistan's decrepit economy. Turkmenistan sits on huge oil deposits, but a lack of export pipelines and unreformed economy keeps the country poor.

On Thursday, Niyazov dismissed several regional administration chiefs in the northern province of Dashgus for failing to meet the government-mandated plan for cotton and rice harvest.

Detailed ancestry checks were a routine practice in Soviet times, when people with relatives in foreign countries or descendent of czarist-era entrepreneurs or aristocrats were barred from senior positions in any field.

Niyazov said Thursday his new policy was not a return to Soviet practices but a reflection of older traditions of his Central Asian nation.

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