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Turkmenistan: Big Projects Go On Despite Bleak Future

  • Bruce Pannier

A new stadium under construction in Ashgabat -- but does the government still have the money for such extravagances?

A new stadium under construction in Ashgabat -- but does the government still have the money for such extravagances?

The economic crisis is hitting Central Asia hard now. Turkmenistan has not been immune; if anything, the country's dependence on natural gas exports has made it more vulnerable than its Central Asian neighbors.

But one would never know it looking at the number of costly and arguably fruitless projects into which Turkmenistan's government is pouring money. According to the Turkmen government this is still "Altyn Asyr," the Golden Age, a time of prosperity for Turkmenistan domestically and growing importance for the country internationally.

How bad is the economic situation inside Turkmenistan? Why does the government there continue to talk about spending billions of dollars on projects that seem to lead to a dead end? What sort of pressure might Turkmen authorities be facing due to this economic downturn?

RFE/RL's Turkmen Service, known locally as Azatlyk, assembled a panel to delve into these matters.

Azatlyk director Muhammad Tahir chaired the panel. Participating in the discussion was Dr. Luca Anceschi, professor of Central Asian studies at Glasgow University and noted authority on Turkmenistan. Also sitting in for the talk was Dr. Slavomir Horak, researcher at the Department of Russian and East European Studies at Charles University in Prague and author of many articles about Turkmenistan. And I, naturally, threw in some comments as well.

"If we look at the [Turkmen] economy of 2015, it's very much the same as in 1995; no significant change has been introduced," Anceschi said regarding Turkmenistan's continued reliance on gas exports for state revenues.

Actually, the panelists used the word "overreliance" many times when describing Turkmenistan's dependence on gas to prop up the country's economy. The price of gas on world markets has decreased by nearly half since the start of 2014, and the effects are now becoming visible in Turkmenistan.

After Turkmenistan became independent in late 1991, the government offered the country's population free gas, electricity, and water, though all these were rationed. The Turkmen government also subsidized basic foodstuffs. But in the last few years, Turkmen authorities started cutting back on subsidies. Up to a limit, utilities are still free; but above the imposed limits, the population now has to pay. The prices of basic foods have also slowly started to rise.

The Council of Elders, one of Turkmenistan's rubber-stamping bodies, has already proposed doing away with all subsidies starting in 2016.

Horak noted new regulations in Turkmenistan also limit the amount of hard-currency transactions that can be made. "That presents difficulties to business operations with Turkmen partners in general, not only with gas exports but also the small trade sector and other productive sectors of the Turkmen economy," Horak said.

With all these signs of economic decline, one would think the Turkmen government would be economizing on all its expenses, especially some of the big projects Turkmenistan is undertaking.

But that is not the case.

Turkmen President Gurbanguly Berdymukhammedov has already announced that construction of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline will start in December on Turkmenistan's territory. Turkmenistan is even offering to fund the bulk of the $8 billion-$10 billion project despite decaying security situations along the proposed route, in northern Afghanistan and southern Pakistan's Balochistan Province.

Turkmen authorities just announced the completion of the Turkmen section of the Turkmenistan-Afghanistan-Tajikistan railway line. The Turkmen government has vowed that construction of the Afghan section, just across the border from Turkmenistan, will start in early 2016 despite increased fighting in northern Afghanistan and the fact that both the Afghan and Tajik governments lack funding for their parts of the line.

Turkmenistan will finish the East-West gas pipeline in December. The pipeline will carry some 30 billion cubic meters of gas to Turkmenistan's Caspian shore where, currently, there is no pipeline linking to any other country.

And there are the Asian Indoor and Martial Arts Games that Turkmenistan is hosting in 2017. The government is spending billions of dollars on construction of facilities for that event.

Horak noted, "The tendency of self-presentation of Turkmenistan and the president is highly positioned behind any of these projects" as something that is fueling these projects. Turkmenistan's government, specifically President Berdymukhammedov, has said many times in state media these projects were important to the country. The authorities, Horak said, "can make some part of the TAPI project and show it on TV as the plan has been accomplished and we are doing something good for people, the same with other projects."

Anceschi said this was an important fact. Turkmenistan's government has created a facade, an image that will not bear close scrutiny, especially from the country's people. "When you grow up in a context where you're told that this is the golden age and that Turkmenistan…and all these myths crash one after the other then some people would actually start to question who are we actually ruled by," he said.

Anceschi also pointed out that the extremely opaque nature of the Turkmen government raises questions about what role corruption among the elites might be playing in these multibillion-dollar projects.

In any case, Anceschi drew attention to the fact Turkmen authorities seem to be trying to address the economic problems as quietly as possible. "What we've seen so far, at least in 2015, is a very significant change in the way in which the regime is operating in the economy," he explained.

Both Anceschi and Horak cautioned that the deteriorating economic situation in Turkmenistan does not necessarily mean the regime is in danger of collapsing anytime soon. "Maybe we will see in the coming years that the Turkmen regime is more sustainable than we can see now," Horak said.

The panelists discussed in greater detail these issues and other matters. You can hear the whole discussion here:

About This Blog

Qishloq Ovozi is a blog by RFE/RL Central Asia specialist Bruce Pannier that aims to look at the events that are shaping Central Asia and its respective countries, connect some of the dots to shed light on why those processes are occurring, and identify the agents of change. Content will draw on the extensive knowledge and contacts of RFE/RL's Central Asian services but also allow scholars in the West, particularly younger scholars who will be tomorrow’s experts on the region, opportunities to share their views on the evolving situation at this Eurasian crossroad. The name means "Village Voice" in Uzbek. But don't be fooled, Qishloq Ovozi is about all of Central Asia.


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