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Turkmenistan: Ashgabat's Claims Of Strong Economic Growth Viewed With Skepticism

Few facts seem to support Turkmenistan's claim that its economy grew robustly last year, while its natural-gas production rose only 3 percent. The country's notoriously unreliable statistics may serve as a reminder of past charges by analysts and dissidents that much of Ashgabat's economic data is falsified.

Boston, 15 January 2003 (RFE/RL) -- Turkmenistan has released statistics that could make it the world's fastest-growing economy, if only there were a way to verify its claims.

According to the National Institute of Statistics and Information, Turkmenistan's gross domestic product rose robustly in 2002, the Interfax news agency reported. GDP grew from 31 trillion manats in 2001 to 63.8 trillion manats (some $12 billion) last year, the institute said. ($1 equals 5,200 manats.)

The record performance was credited to a 26.5 percent increase in services and a 21.7 percent jump in industrial production. The reports also cited big gains of 31 percent in the food industry and 15.5 percent in agriculture. Ashgabat reported 20.5 percent GDP growth in 2001 and 17.6 percent in 2000, showing bigger and better rates of increase each year.

The trouble with the rosy picture is that it cannot be substantiated. Unlike other countries in the region, Turkmenistan has not permitted cooperation with multilateral institutions that might examine its figures.

Olga Stankova, an International Monetary Fund (IMF) spokeswoman in Washington, told RFE/RL, "We are not in a position to comment on the official data as we have not had substantive discussions with the Turkmen authorities for more than a year."

Turkmenistan is the only country in the region for which the IMF has not published economic estimates for either 2002 or 2003. The country also stopped cooperating with the CIS Intergovernmental Statistics Committee several years ago.

During a press briefing in Washington last September, John Odling-Smee, director of the IMF's European II Department, called Turkmenistan one of "the least reform-minded countries in the region."

But while the evidence is inconclusive, the data is far from convincing. Closer examination may lend weight to past charges by former Foreign Minister Boris Shikhmuradov that the government falsifies its figures. Last month, Shikhmuradov recanted most of his criticisms in a televised confession following an alleged coup attempt against President Saparmurat Niyazov. But the numbers are still highly suspect.

One reason is that the government itself has reported growth of only 3 percent last year in natural gas, Turkmenistan's biggest product. The increase fell far short of the 53 percent growth target set in December 2001 and the revised 40 percent goal announced by the government last May. GDP growth of more than 21 percent is unlikely when gas output is up only 3 percent.

Turkmenistan has not disclosed how much of its GDP comes from gas, but in the past, the share has been as high as 50 percent. Last October, Niyazov said some 70 percent of Turkmenistan's revenues were from oil and gas. In 2002, oil production rose about 12 percent, an official in the Oil, Gas, and Mineral Resources Ministry told Interfax this week. None of the figures would support GDP growth of more than 21 percent.

Cotton, which is traditionally Turkmenistan's most important product after petroleum, also fared poorly last year. In November, Niyazov blamed officials for what was described as a "failed harvest" of 489,000 tons, just 24 percent of the target, although heavy rains played a prominent role. The country collected 1.3 million tons of cotton in 1999.

Niyazov reportedly fired governors in four regions and his agriculture minister over the poor cotton crop. Although the country reported a good grain harvest that met the government's targets last July, there were no signs in Turkmenistan's three top commodities of gas, oil, and cotton that GDP growth could have reached 21 percent.

Last week, the London-based Economist Intelligence Unit noted the unreliability of Turkmenistan's official GDP data, saying: "The figures are based on over-reporting at all levels of the economy, which is compounded by flaws in inflation calculations. Moreover, the high levels of subsidies that are extended to all sectors of the economy further distort growth data."

In fact, the government's own figures suggest that inflation rose sharply last year. Although the government quoted a GDP growth rate in real terms, corrected for inflation, it also cited a GDP figure of 63.8 trillion manats in "current prices," that is, the inflated prices that citizens pay today.

When compared with the official GDP figure of 31 trillion manats for 2001, last year's economic totals more than doubled in current prices. If the government is correct in its claim that GDP grew by 21.2 percent in real terms, then last year's inflation would be nearly 70 percent. The numbers are hard to square with the fact that the government controls the prices for nearly everything.

Turkmenistan's secrecy and inaccuracy make it hard to tell whether any of the numbers are right, but it seems likely that the country's economy is far less healthy than its pronouncements suggest. The Economist Intelligence Unit noted that figures for electricity output were actually down through last October from 2001 rates -- hardly a sign of an economy racing ahead at a double-digit clip.

The government's latest figures may make it impossible to get information about the true state of the country's economy, but they also do not make the case that it is one of the fastest-growing economies in the world.