Economic Reform Plans Too Vague

President Gurbanguly Berdymuhammedov’s plans to change Turkmenistan into a market economy are vague and unrealistic at this stage, say NBCentralAsia analysts.



On September 8, President Gurbanguly Berdymuhammedov unveiled a new economic strategy designed to take Turkmenistan through the transition to a market economy by means of stable policies and regulation. A new system of administration will be put in place, with more flexible analysis and planning, and transparent financial transactions and accounting. New economic managers leaders will be trained up, who understand the laws of a free market economy.



Turkmenistan’s economy is currently directed from the top, according to an administrative system established by the late president Saparmurat Niazov. The state has a monopoly in all economic sectors, and there is no foundation of laws from which market relationships could develop.



NBCentralAsia analysts say that although the government is clearly keen to attract foreign investment by operating more transparently and according to accepted international principles for doing business, it will find it hard to make the shift.



One obstacle in the path of such reforms will be the high level of corruption. An NBCentralAsia analyst in Turkmenistan says that initiatives which Berdymuhammedov is already pursuing to make financial deals more transparent and publishing accounts have already met with veiled resistance from some government officials, many of whom live off corrupt practices.



A 2007 World Bank study on the quality of state governance gave Turkmenistan the lowest possible score for attempts to combat corruption, and an NBCentralAsia analyst in Ashgabat says this issue remains a pressing problem.



Another economic analyst says it remains unclear what kind of economic model the government wants to introduce. He says the “vague proclamations” made so far fail to identify ways to tackle inflation, unemployment and the parallel exchange rate, or how to carry out privatisation and encourage enterprise.



The latest official inflation figures date back ten years, and the official exchange rate for the national currency has not changed in nine years. It currently stands at 5,200 manats to the US dollar even though the black market rate is currently around 22,000 to the dollar.



“Berdymuhammedov wants an economic revolution from above, while remaining silent about the micro level where it is the private sector that counts,” said the analyst.



Others commentators believe the new strategy is aimed solely at attracting foreign investment into the energy sector and that it is too early to talk about a genuine desire for “perestroika” – a total overhaul of the country’s economic model.



(NBCentralAsia draws comment and analysis from a broad range of political observers across the region)