Turkmen, Uzbeks to Bid for European Investment

Uzbekistan and Turkmenistan will join other Central Asian states as well as Russia and other European Union members at a business investment forum on October 18, but analysts say both states continue to face difficulties in attracting interest.

Both Turkmenistan and Uzbekistan have natural gas deposits that should draw international investment, but their closed economies, murky regulatory practices and lack of honest statistical reporting deter many companies from coming in.

Annadurdy Hadjiev, a Turkmen economic analyst based in Bulgaria, notes that Turkmenistan’s legislation on foreign investment is problematic, and “foreign companies will find it hard to protect their interests in the event of an economic dispute". Those foreign firms that currently operate in Turkmenistan are able to do so only because they have succeeded in establishing what Hadjiev calls “a personal relationship of trust” with President Gurbanguly Berdymuhammedov.

Pavel Grudnitsky, director of the Analytical Resources Studio in Kazakstan, argues that Uzbekistan and Turkmenistan can only become investment magnets if they reform their energy sectors to run according to the rules of the open market, rather than as personal fiefdoms.

This article was produced as part of IWPR's News Briefing Central Asia output, funded by the National Endowment for Democracy.