Tag Archives: Turkmenistan

Briefing: Region’s economies sputter into life

JULY 22 2016 (The Conway Bulletin) — >>Malaise, downturn recession. What exactly going on in Central Asia and the South Caucasus?

>>All countries in the region are either growing slower than last year or, in some cases, their economies are even shrinking. The crisis is regional, although each country has shown its own specific problems.

>>This is the region-wide problem. I can see but what caused it?

>>The US dollar strengthened so much in 2014 that it triggered a sharp drop in oil and commodity prices. This pulled dollars away from Emerging Markets, like our own patch. As commodity prices sank, Russia fell into a crisis that quickly turned into a recession. The depreciation of the rouble cut the value of salaries earned by migrant workers, triggering a slowdown in remittances to Central Asia and the South Caucasus.

>>Okay, but oil prices picked up again since the 13- year low point in January. Isn’t that good for energy exporters in Central Asia and the South Caucasus?

>>Higher oil prices have helped state-owned oil companies to relax their emergency mode, but they’re still too low to justify the region’s most expensive projects. Think of the Kashagan oil project in Kazakhstan’s sector of the Caspian Sea, or the upgrade of Azeri Chirag-Guneshli oil project in Azerbaijan. Plus there are negative signs for transparency over the re-organisation of government companies and structures in the energy sector in Kazakhstan and Turkmenistan.

>>And what about the other commodities, such as gold and aluminium?

>>Gold is a big component of Kyrgyzstan’s GDP as it depends on the performance of the Kumtor gold mine in the east of the country. This year, operational problems and corporate battles have slowed production, which has significantly hit Kyrgyzstan’s growth figures. It now could slip into a recession. Tajikistan, on the other hand posted a promising 6.6% GDP growth in the first half of 2016 and state-owned smelter TALCO increased aluminium production. But these numbers should be read with caution. TALCO also said that it is currently operating at a loss, as its production costs are 25% higher than market prices.

>>Right, so is it all bad?

>>Not necessarily. Dollarisation, as Georgia’s Central Banker said this week, is still a problem across the region and the currencies continue to be weak. But despite some devaluations and depreciations, most of them have kept steady in 2016, which is a sign that governments want to keep their economies stable and will spend their reserves to prop them up.

>>And for companies looking to do business in the region, how bad is it?

>>If in 2015 we saw scores of international companies running away from projects in Central Asia and the South Caucasus, this year we’ve seen promising developments, such as the final investment decision for the expansion of the Tengiz oil- field in Kazakhstan and the signing of the contract for the construction of the Rogun dam in Tajikistan, both multibillion-dollar commitments. French hypermarket Auchan has also opened up its long-awaited store in Dushanbe. Perhaps confidence is returning or at least a sense of “let’s just get on with it”.

ENDS

(News report from Issue No. 290, published on July 22 2016)

Turkmen President urges to vote on new constitution

JULY 19 2016 (The Conway Bulletin) — Turkmenistan’s President Kurbanguly Berdymukhamedov ordered the Council of Elders to vote on a new constitution in mid-September. The Council of Elders is an advisory body chaired by Mr Berdymukhamedov widely believed to rubber-stamp his diectorates. A proposed new constitution that would effectively extend Mr Berdymukhamedov’s term as president was published in February.

ENDS

(News report from Issue No. 290, published on July 22 2016)

Turkmenistan reorganises its oil and gas ministry

JULY 15 2016 (The Conway Bulletin) — In a move that took observers by surprise, Turkmenistan abolished its oil and gas ministry which had, officially, run the most profitable economic sector in the country, part of a wider structural reform of the government.

At a cabinet meeting, President Kurbanguly Berdymukhamedov justified the move as an effort to improve management and governance systems n the energy sector.

Turkmenistan is considered an important stakeholder in the world’s energy nexus, and the move shook analysts. It holds the fourth-largest gas reserves in the world and exports gas mostly to China via pipeline. For over a decade, European and US lobby groups have pushed for a Trans-Caspian Pipeline to pump Turkmen gas to Europe. Turkmenistan is also building TAPI, a gas pipeline to export gas to India, via Afghanistan and Pakistan.

Simon Pirani, senior research fellow at the Oxford Institute for Energy Studies, said that aside from internal causes, which are hard to guess, a range of external factors could have played in Turkmenistan’s decision to reorganise its hydrocarbon sector.

“The continuing relationship with China, despite lower off-take of gas than Turkmen officials had hoped, the improved ties with Iran and the quite bad relationship with Russia could all be relevant factors,” he told The Conway Bulletin.

The change, however, is unlikely to shift the way that Turkmenistan does business, a system that revolves around the whims and decisions of President Berdymukhamedov.

“Companies and international organisations are aware that Turkmenistan is a centralised system,” Mr Pirani said.

ENDS

(News report from Issue No. 290, published on July 22 2016)

Salaries rise in Turkmenistan

JULY 18 2016 (The Conway Bulletin) — Turkmenistan’s President Kurbanguly Berdymukhamedov signed a bill to increase the salaries of state workers by 10% from January 2017, continuing the tradition of salary increases at the beginning of the year, official media reported. The minimum salary in Turkmenistan amounts to 650 manat (around $186 at the official exchange rate).

ENDS

(News report from Issue No. 290, published on July 22 2016)

Turkmen Union of Industrialists needs cash

JULY 12 2016 (The Conway Bulletin) — The Turkmen Union of Industrialists and Entrepreneurs, a lobby group, has allegedly asked local entrepreneurs to pitch in and aid the government’s budget with donations of up to $100,000, the opposition website Chronicles of Turkmenistan said. The request apparently was outlined during a meeting by the Union’s chairman, Alexander Dadayev. Since 2012, the Union established the Party of Industrialists and Entrepreneurs, a government-linked party.

ENDS