Unfiltered Insights on Turkmenistan: A Land of Contrasts
Turkmenistan removes barriers for citizens to purchase sweet pastries
The upcoming International Women's Day promises an interesting spectacle in Turkmenistan, where the authorities continue to distribute cash handouts to women, a tradition dating back to the early 2000s. However, the military personnel receive a less favorable treatment, facing housing issues that have reportedly led to a wave of resignations [1].
Among the most debated topics regarding Turkmenistan is the current state of foreign investment. Despite the country's rich hydrocarbon resources, attracting and retaining foreign investment has proven challenging over the years. Although FDI peaked at $4.55 billion in 2009, it dramatically declined to $1.17 billion by 2020 [2]. The energy sector remains the major recipient of foreign investment, with minimal funding in other sectors like agriculture and services [2].
Turkmenistan's economy is deeply dependent on hydrocarbons, contributing over 90% of its exports [3]. The energy sector serves as the core foundation for the country's economic growth strategy, with recent developments focusing on increasing natural gas and electricity exports through countries like Iran and potential partnerships with countries like Türkiye to supply gas to Europe [3][4].
To foster a more appealing environment for foreign investors, the government of Turkmenistan is exploring various strategies [5]:
- Adopting legal reforms to guarantee transparency and independent judiciary
- Liberalizing the economy by reducing excessive state control
- Modernizing infrastructure and digital access
- Enhancing data transparency and reforming currency policies
- Strengthening the rule of law and combating corruption
- Encouraging investment in sectors beyond hydrocarbons and promoting human capital development
Recent initiatives include expanding economic and trade ties with various countries while focusing on sectors like energy and transport. Strategies presented at forums like the Tehran Dialogue emphasize the necessity of developing the transport and energy sectors through international cooperation [4].
Despite economic headwinds and challenges in attracting foreign investment, the Turkmen government remains optimistic, projecting a demographic growth of 2 million people since 2008 and gross domestic product growth exceeding 6% since 2009 [2]. However, the credibility of these claims is questionable, as even number-crunchers like the International Monetary Fund have publicly conceded that these figures are likely exaggerated [2].
In the foreign policy arena, Turkmenistan is actively engaging with its neighboring countries, including Afghanistan, and participating in the fifth meeting of foreign ministers among these countries to discuss regional stability and economic integration [1]. Recent discussions with the Taliban government in Kabul revolved around the trans-Afghan TAPI natural gas pipeline project, which Kabul is eager to commence [1].
Amidst these economic and political tensions, Ashgabat is making an effort to engage with key international players, with an upcoming international forum on attracting investment into its energy sector scheduled to take place in Paris [4]. Despite these initiatives, foreign investors remain wary of the opaque and corrupt conditions in Turkmenistan.
The upcoming international forum in Paris aims to address the concerns of foreign investors regarding transparency and corruption in Turkmenistan's energy sector. Despite the nation's optimistic projections of economic growth, foreign investors express anxiety about investing in sectors beyond hydrocarbons, like business and fashion. On the other hand, the sports sector in Turkmenistan may witness a boost due to the government's efforts to improve the rule of law and combat corruption, potentially attracting partnerships for sporting events or infrastructure development.
