SEPT. 26 (The Conway Bulletin) – Turkmen President Kurbanguly Berdymukhamedov signed into a law a decree that cancels the last of Turkmenistan’s once-generous subsidies system, another admission that the country’s economy is struggling to recover from a 2014-17 downturn.
Analysts immediately said that the rollback in subsidies may trigger protests. Previous subsidy cuts have sparked off small rare anti-government demonstrations in Turkmenistan, regarded as one of the world’s most authoritarian and reclusive countries.
Like other countries in the region, the Turkmen government has cut its Soviet-era subsidy system over the past few years but from the start of next year households will have to pay near-market prices for gas, electricity and water. Previously petrol and food had also been heavily subsidised. Media reported that there has been a vague promise that people will pay “preferential prices”, although it is unclear what exactly this means.
Turkmenistan has been slow to recover from a regional economic downturn. Its main revenue generator is gas which is locked into inflexible long-term export contracts with China.
The Turkmen government is trying to broaden its export base. It has opened a new fertiliser plant and a new power plant, both focused on exports, in the past month but analysts have said that revenues from these projects will take time to trickle down to the population.
ENDS
>>This story was first published in issue 387 of The Conway Bulletin on Oct. 1 2018