Turkmen Budget Reform Urged

Acting Turkmen president Gurbankuly Berdymuhammedov has promised a swift reform of pension, health care and education systems if he wins the February 11 election, and other presidential candidates have also expressed their intentions to implement social reforms.



Economic experts interviewed by NBCentralAsia say that in order to keep that election promise Saparmurat Niazov’s replacement will have to redistribute funds to the social sector and restructure the state budget.



Funding for social programmes makes up just 22 per cent of Turkmenistan’s 2007 budget - funded almost entirely by revenues from oil and gas resources and controlled directly by Niazov - compared with around 67 per cent in nearby Kyrgyzstan last year.



Analysts have urged that the budget management process be reformed and money from Turkmenistan’s mineral wealth be diverted.



“The new authorities have to redirect money raised from energy exports to support social reforms,” said one analyst based in Turkmenistan.



However, he added that the redistribution of energy revenues will not solve the deep, systemic problems related to the poor development of agriculture in Turkmenistan and the lack of incentive for private producers, who could potentially boost long term economic growth.



Though the state gives Turkmen free access to gas, water and salt, social sector funding has slumped badly in recent years, say observers.



Niazov’s 2006 pension overhaul left many rural pensioners without any income at all. Education reforms cut teachers’ wages and cut the secondary school year to nine years.



NBCentralAsia analyst Annadurdy Khadjiev believes Niazov made these controversial changes for financial reasons. “According to my economic calculations, it is possible to see that Turkmenistan does not have enough budget resources,” said Khadjiev. “Otherwise, why would Niazov reduce pensions and wages?”



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