Turkmen Treasury Out of Cash

Turkmen president Saparamurat Niazov’s admission that public-sector workers are owed around 250 million US dollars in unpaid wages has led local analysts to question where all the country’s export earnings are going.

Niazov, who likes to be called Turkmenbashi or “Leader of the Turkmen”, made the admission at a cabinet meeting on April 5, after months of speculation about the state of the government’s finances, and anger from those who have not been paid.

Although the president said the majority of those affected were teachers and nurses, the shortfall in spending is likely to have affected others in the large public sector such as the army, state-run media, and civil servants as well.

The news came as little surprise to observers who were mystified by last November’s announcement that the annual budget to date showed a surplus once all spending commitments were met. That claim did not tie in with reports that employees of Turkmenistan’s five provincial authorities have missed out on wages since summer 2003, while workers at some state-run factories have not been paid for a year or more.

Turkmenistan has consistently reported improbably high rates of economic growth – over 20 per cent last year and the same again projected for 2004. Although these figures are questionable, the country should be raising some income by exporting gas, petroleum products, and even cotton, despite last year’s poor harvest.

Analysts in Turkmenistan believe that the coffers are empty not because the state is failing to earn revenue, but because money from oil and gas is diverted from the government account to a separate presidential fund – although this has long been denied by officials. The special fund is managed by Turkmenbashi and used for prestige construction projects such as the gigantic mosque now being built in his home village.

The president, however, decided his ministers were to blame for the non-payment of salaries. He gave economy and finance minister Yazguly Kakaliev a final warning, ordering him to pay the arrears within a week. He also punished health minister Gurbanguly Berdymuhammedov by docking three months from his salary.

Journalists working for the government-run newspapers and broadcasters are outraged that their wages have not materialised for several months – something that never happened to this relatively privileged group before. In the construction industry, even in the capital Ashgabat, wage delays of more than a year are commonplace, while school teachers often have to wait six months to be paid.

“We haven’t been paid our salaries for four months,” said one teacher from a school in the capital, speaking on condition of anonymity. “But the headmaster told us to be quiet or else the school would be closed, so we have to suffer and wait.”

They may have good reason to fear complaining. Many have linked the recent decision to dismiss 30,000 nurses and medical orderlies and replace them with army personnel – effectively free labour – to the budget crisis, and complaints from clinic workers who had not been paid for months.

“We haven’t been paid since November last year,” said a nurse from the city hospital in the Mary district, who wished to remain anonymous. “But no one says anything, because if we do, we will lose our jobs.”

With unemployment running at more than 40 per cent according to unofficial estimates, those in work are loath to put their jobs at risk, even if they are not currently being paid.

Instead, people get by with help from their families, or by working outside the public sector.

One kindergarten employee told IWPR that she was relying on her family to help her out. “Our grandmother and grandfather are still alive, thank God, and they receive a pension which pays for us all,” she said. “I still have hope – the state can’t keep refusing to pay us, can it?”

And a teacher in the town of Turkmenabat said, “My husband has left the civil service so as to make a living – we’ve got two children. Now we live on the one-off fees he earns, for example from the translations he does – he gets paid for them immediately.”

Ata Muradov is the pseudonym for a journalist in Turkmenistan.