Tag Archives: Turkmenistan

Turkmenistan will cut all utility subsidies from 2019

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.
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>>This story was first published in issue 387 of The Conway Bulletin on Oct. 1 2018

Afghan rail link via Turkmenistan to is on, says Tajikistan

SEPT. 25 (The Conway Bulletin) – Tajikistan’s government said that a project to link up Afghanistan and Tajikistan with an 80km railway through Turkmenistan was still ongoing despite news reports quoting the Tajik ambassador to Turkmenistan saying that it had been cancelled. Turkmenistan and Tajikistan have rowed over the past few weeks over delays at the Turkmen border for Tajik trucks trying to cross to Afghanistan. This has fuelled speculation that Tajik-Turkmen relations and joint projects would be damaged.
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>>This story was published in issue 387 of The Conway Bulletin on Oct. 1 2018

Turkmenistan cute petrol subsidies; prices soar

FEB. 1 (The Conway Bulletin) – Turkmenistan raised its prices for petrol by 50% overnight, a sharp reminder of the financial pressure that the country is under. Petrol had been heavily subsidised by the government and while the prices are still low, around 1.5 manat or nearly half a US dollar for a litre, the price increase will rankle. Last year the government also cut subsidies on utilities.

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>>This story was first published in issue 360 of The Conway Bulletin

Iran-Turkmenistan gas argument worsens

JAN. 29 (The Conway Bulletin) – Iran threatened to take Turkmenistan to an international tribunal over a row about gas supplies, worsening a year-long argument between the two neighbours.

Iranian officials said that not only did they contest the value of the outstanding bill that Turkmenistan says Iran still hasn’t paid, but also that the gas Iran had received was of sub-standard quality.

“We are planning to take dispute with Turkmenistan’s state-owned gas company, Turkmengaz, over the quality of the delivered gas to an International Court of Arbitration,” Iranian news agencies quoted Bijan Namdar Zanganeh, the Iranian petroleum minister, as saying.

Turkmenistan stopped sending gas to Iran in January 2017, claiming it had not been paid for deliveries several years earlier.

Some analysts have said that Turkmenistan may be trying to squeeze more money out of Iran for gas supplies to the north of the country because its economy has been floundering. In December, Turkmenistan said that it had started preliminary arbitration proceedings against Iran for what it said was the outstanding amount owed. It did not name the arbitration court that it was targeting or just how far it had gotten with the process.

Iran has been importing gas from Turkmenistan, whose main client is China, since 1997.

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>>This story was first published in issue 360 of The Conway Bulletin

COMMENT: China wants more deals in Central Asia

>> China’s Belt and Road project has triggered a surge in FDI in Central Asia in the past few years. There is more to come, writes Filip Rambousek.

FEB. 6 (The Conway Bulletin) – In 2018, Chinese foreign direct investment (FDI) in Central Asia, stemming from its global Belt and Road Initiative, is likely to continue to increase. Kazakhstan, where China has already built railways and a pipeline, can be especially optimistic.

2017 saw the first freight train arrive in the UK from China via Kazakhstan, and in 2018, we will likely see a gradual increase in traffic, as China looks to expand the Kazakh route by trading with Iran.

Increasing Chinese activity will also trigger geopolitical competition in the region. Japan has already announced its intention to increase freight traffic from South Korea through Kazakhstan to Europe to curb Chinese influence. Similarly, the US may be turning back to the region following the scaling down of its military operations in Afghanistan and closure of its military base in Kyrgyzstan four years ago.

At a meeting between Nazarbayev and Donald Trump in Washington this January, the two leaders reportedly signed deals for US investment in Kazakhstan worth more than $7.5b. This may not be military but it is a big commercial statement. The US will also continue to watch Uzbekistan, Central Asia’s most populous state and arguably biggest underachiever, as Pres. Shavkat Mirziyoyev’s reform programme seeks to attract Chinese investment to restore its economy.

Similarly, for Kyrgyzstan, Chinese FDI presents an attractive alternative to the Eurasian Economic Union (EEU). Promising better access to the Russian markets, the EEU has been an economic disappointment, serving primarily as a vehicle for Russian influence. Kyrgyzstan’s ambivalent relationship with the EEU is illustrative of Russia’s position in the region. While its cultural and political heritage remains compelling, the EEU cannot match the potential offered by China; even Kazakhstan’s move to the Latin alphabet is a step away from Russia, which will likely see its influence over Central Asian affairs beginning to diminish.

Nevertheless, for China, Central Asia is only a means to an end. Its investment may travel along Central Asian railways but provide no lasting benefit. Central Asian countries should use Chinese investment to kick-start their economies, and show that FDI investment in the region can make sense.

Opportunity may come to Central Asia, but optimists should also be cautious.

>>Filip Rambousek is a Russia and CIS analyst at the S-RM consultancy.

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— This story was first published on Feb. 6 2018 in issue 360 of The Conway Bulletin

Turkmen gas supplies to China drop

DEC. 26 (The Conway Bulletin) — Gas supplies to China from Turkmenistan fell by 7% in November although compared to the same period in 2016 volumes have still increased, Reuters reported quoting Chinese customs data.

There has been no official explanation from either Turkmenistan or China on the gas supply drop but the slump will pile extra pressure onto the already-faltering Turkmen economy.

Turkmenistan’s economy is dependent on its gas sales to China. It is China’s largest supplier, providing it with 40% of its imports. Chinese data showed that imports from Turkmenistan were 1.592m tonnes, down from 1.71m tonnes in October. This is still 11% higher than a year earlier.

Turkmenistan’s economy is already under pressure from the collapse in energy prices since 2014.

Turkmen Pres. Kurbanguly Berdymukhamedov has sacked ministers and other officials as he looks to shift blame. The government has also cut subsidies for utilities and reports have said that the Black Market price of the US dollar has soared against the Turkmen manat.

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— This story was first published on Jan. 5 2018 in issue 356 of The Conway Bulletin

Berdymukhamedov bans black cars

JAN 2 (The Conway Bulletin) — Turkmen president Kurbanguly Berdymukhamedov, a man known for his autocratic ways and snap decision-making, ordered police to fine people still driving black cars. Quoting an opposition website, Radio Free Europe/Radio Liberty said that Mr Berdymukhamedov had ordered a blanket ban on dark coloured cars. Mr Berdymukhamedov is given to grandiose statements and displays of power. In 2017 he was filmed giving his government a gym session and teaching special forces how to attack IS militants. He has also been filmed giving his subordinates a dressing down and he has said that he wants an outright ban on smoking by 2025.

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— This story was first published on Jan. 5 2018 in issue 356 of The Conway Bulletin

Turkmenistan briefly cuts power to Afghanistan

JAN 2 (The Conway Bulletin) — Turkmenistan cut power supplies to northern Afghanistan for two days after, media has reported, the Afghan authorities refused to pay an increased fee for electricity. Power supplies were renewed after Turkmenistan agreed to delay price increases by a month. Turkmenistan’s economy has been hit hard by a drop in energy prices since 2014.

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— This story was first published on Jan. 5 2018 in issue 356 of The Conway Bulletin

Comment: A quick look back at 2017

>> The region’s economies and Uzbekistan’s regeneration under Mirziyoyev are the standout features of 2017, writes James Kilner

JAN 5 (The Conway Bulletin) — For Central Asia and the South Caucasus, 2017 was a year of recovery. There have been the usual rounds of elections, generally predictable and cementing the incumbent powers in Georgia, Armenia and Kyrgyzstan, but economics, and not politics, caught the eye and the bigger headlines in 2017.

The economic stupor that had hung over the region since oil prices collapsed in 2014 and Russia’s economy fell into a recession, was finally thrown off. If, at the start of the year, the green shoots of recovery looked tentative, by October they were coming out into full bloom.

Most countries were posting decent economic growth figures and double-digit inflation, a real worry, has been neatly sidestepped.

Special mention here must go to Georgia which has posted exceptionally strong economic results, pushed on by a spurt in tourism and investment.

There have been some serious economic exceptions, though. Azerbaijan’s economy still shrunk and its banking sector looked as shaky as ever. International Bank of Azerbaijan defaulted on its debt repayments and several smaller banks have had their licenses revoked. Tajikistan also looks increasingly fragile and Turkmenistan, while the information stream coming out of the country is as beguiling as ever, looks like it may have been holed below the waterline. Watch out, in 2018, for a serious fracture in Turkmenistan.

As well as a recovery period for the region’s economies, 2017 was also a year of recovery for Uzbekistan’s political structures and their relationships with society. This will go down as the year that Uzbek President Shavkat Mirziyoyev made it clear that he was determined to pursue a reformist agenda after taking over from the authoritarian and brutal Islam Karimov in September 2016.

He devalued the official exchange rate of the Uzbek soum, took thousands of people off blacklists linked to Islamic extremists, reigned in the power of the secret service, encouraged traders to export to neighbouring countries and signed deals with the rest of the region over borders and commerce that his predecessor had spurned.

There is still much to do in Uzbekistan, and some people grumble about the lack of genuine democratic values and the slow pace of human rights progress, but Pres. Mirziyoyev is laying the foundation for a better future for Uzbeks.

If the Conway Bulletin had a ‘Person of the Year’ prize, Mirziyoyev would be a worthy winner.
>> Next week – the first in a 2-part series on what to look out for in 2018

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— This story was first published on Jan. 5 2018 in issue 356 of The Conway Bulletin

Ashgabat hosts Asian Indoor and Martial Arts Games

SEPT. 17  (The Bulletin) — Leaders from across Central Asia, Afghanistan, India and Pakistan converged on Ashgabat to attend the opening ceremony of the Asian Indoor and Martial Arts Games. On the sidelines of the Games, which Turkmen Pres. Kurbanguly Berdymuhamedov has used to enhance his prestige, the leaders talked trade and politics; promised to boost relations and deepen cooperation.

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— This story was first published in issue 344 of The Conway Bulletin, now called the Central Asia & South Caucasus Bulletin, on Sept. 24 2017.

— Copyright the Central Asia & South Caucasus Bulletin 2017