President Attempts to Reorder State Spending

Even though Turkmen president Gurbankuly Berdymuhammedov has vowed to tighten control over ministries’ spending, NBCentralAsia experts say there is no way this can improve unless the president delegates responsibility.



At a cabinet meeting on August 3, President Berdymuhammedov criticised the way the government’s development funds for various sectors were being administered. He pointed to a lack of clarity in the way they worked, the amount of money the contained and the way it was accounted for, and called for stricter control to ensure that state money is used for its intended purpose.



He instructed the finance ministry, the central bank and the Supreme Audit Chamber to prepare a report on how these funds are operated and design mechanisms for accounting for and disbursing the money.



The sectoral development funds were set up at various points when the late president Saparmurad Niazov was in power. There are at least ten of them functioning in economic sectors ranging from power generation and agriculture to tourism and healthcare. They get their money from the central government budget as well as sales of items like cotton, oil and gas, and they are supposed to facilitate purchases of equipment, raw materials and services for the sectors they are attached to.



However, government ministers do not control these funds, and in many cases it was Niazov personally who decided how the money should be spent. Since he died in December, Berdymuhammedov has assumed that role.



NBCentralAsia experts say the funds were created in order to hold ministries in check and limit their spending power. They argue that Berdymuhammedov cannot really expect to make improvements to a cumbersome system that requires him personally to exercise formal oversight over all the country’s trade deals.



According to one economist, it would make much more sense to overhaul the entire system so that ministries get a bit more power and the Turkmen economy starts operating by the rules of the market.



Instead of tinkering with the command-led system of economic management, the president should reform the banking and taxation systems.



Other commentators believe Berdymuhammedov is keen to show that he is not going to allow the kind of abuses seen in the case of the International Fund, an off-budget account where huge amounts of money were accumulated from oil and gas export revenues.



“This programme to reorganise financial institutions is an attempt to avert future abuses,” said a commentator in Ashgabat, adding that Berdymuhammedov might also be hinting at the existence of past abuses.



(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)