Turkmen Leaders Plan Crisis Strategy

Turkmen Leaders Plan Crisis Strategy

Sunday, 7 December, 2008

NBCentralAsia observers believes the global financial crisis offers Turkmenistan something of an opportunity. If the authorities are prodded into action and adopt the right measures to protect the Turkmen economy, the same strategies could actually prove to be the road to success once the economic climate improves.

Speaking at a cabinet meeting on November 26, President Gurbanguly Berdymuhammedov called for a strategy of actions designed to provide “effective protection” from the effects of external crisis.

Among the elements of the strategy cited by the president were an accelerated modernisation programme for the country’s oil refineries, the acquisition of property abroad, and purchases of construction materials, since the import price of these has fallen.

NBCentralAsia experts say the world financial crisis has so far only had a marginal impact on Turkmenistan’s closed-off economy.

One area where the economic turmoil will hit home is oil, an important export item for Turkmenistan. World prices have plummeted from nearly 150 US dollars a barrel in July to 45 dollars or less. That will have a major impact on government revenues in the latter part of the year.

NBCentralAsia observers say a well-structured plan for dealing with the immediate crisis could also work well in better times.

Annadurdy Hadjiev, a Turkmen economist based in Bulgaria, says that at this time of low prices, it would make sense to import not only building materials, as the president proposed, but also raw materials, equipment, spare parts for the energy industry, and most importantly, foodstuffs.

“The authorities seem to have forgotten about this, yet buying in food would immediately reduce domestic prices,” he said. “This would have a positive impact on Turkmen family prosperity.”

Economists say that in the last three months, the price of foodstuffs and basic consumer goods has gone up by 15 per cent.

Other analysts believe the authorities should be focusing on creating a bigger role for private enterprise. They see the current crisis as an opportunity to reduce the number of state monopolies and create more of a market economy.

A local businessman said people like him were more than willing to set up firms, bid in tenders, and recruit high-quality staff. In his view, “The state can only benefit from this. Taxes, profits and personnel all remain in the country and wouldn’t be transferred abroad, as happens now.”

(NBCA is an IWPR-funded project to create a multilingual news analysis and comment service for Central Asia, drawing on the expertise of a broad range of political observers across the region. The project ran from August 2006 to September 2007, covering all five regional states. With new funding, the service has resumed, covering Uzbekistan and Turkmenistan.)
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