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FEDERATION OF EURO-ASIAN STOCK EXCHANGES SEMI ANNUAL REPORT MAY 2005
STATE COMMODITY & RAW MATERIALS EXCHANGE OF TURKMENISTAN
ECONOMIC AND POLITICAL DEVELOPMENTS
Politic and Economic Environment:
Turkmenistan, continues to formulate
ambitious national development projects, the
funding of which will largely be determined
by the country's ability to monetize its worldclass
natural gas reserves of some 100
trillion cubic feet (2.9 trillion cubic meters)
with more likely still to be found. With the
completion of the Korpezhe-Kurt Kui pipeline
to Iran, the first gas pipeline from Central
Asia not to cross Russia, gas exports are not
totally dependent on Russia and Ukraine.
But, the vast majority of Turkmenistan's gas
production, about 80%, still moves through
Russian pipelines.
Turkmenistan possesses considerable
natural resources despite the fact that the
Kara Kum Desert covers 80% of the country.
Exploitation of gas reserves (the fourth
largest in the world) has been severely
impaired by Turkmenistan's inability to
access Western markets for its gas.
Turkmenistan has a wide range of other
industrial minerals including the world's third
largest sulfur deposit. While less than 5% of
Turkmenistan is utilized for agricultural
production, cotton is a major export crop
and the sector employs nearly half of the
work force. Turkmenistan's agricultural sector
has the productive potential to export a
variety of products. As such, the government
is currently promoting the textile and food
processing industries and has initiated a
number of transportation infrastructure
projects. The private sector is estimated to
contribute approximately 30% to the annual
ECONOMIC RATIOS
Domestic
savings
Turkmenistan
Lower-middle-income group
Trade
Indebtedness
Investment
GDP. Recent robust economic growth
suggests that Turkmenistan will likely delay
any further privatization among the larger
state-owned enterprises (SOEs) and the
financial sector.
After independence in 1991, Saparmurat
Niyazov, head of the Communist Party of
Turkmenistan since 1985, and president
since October 1990 when the post was
created, was elected president of the new
country in a direct election on June 21, 1992.
Running unchallenged, he was elected with
a reported 99.5% of the vote. In a Jan. 15,
1994 referendum, a reported 99.99% of the
electorate voted to extend Niyazov's term in
office, which had been set expire in 1997,
until the year 2002. This measure was
undertaken in response to a motion by the
leaders of the DPT that he be appointed
"president for life." President Saparmurat
Niyazov announced on Feb. 16, 2001, his
intention to hold presidential elections in
2010, although he was named
Turkmenistan's president for life two
years ago.
GROWTH OF INVESTMENT AND GDP
(%)
25
20
15
10
5
0
-5
-10
-15
97
GDI GDP
Economic Performance:
In an effort to combat a number of
consecutive years of hyperinflation, the
government in 1996-1997 restrained budget
deficits, tightened credit and eased currency
controls in accordance with IMF
recommendations. Inflation (as measured by
the GDP deflator) was reduced from over
1,000% to under approximately 35% by 1998
and then declined further to 9.1% by yearend
2003. Fiscal deficits have been quite
small since the resumption of normal
production of natural gas; the deficit in 2003
is estimated to have been just 0.9% of GDP,
basically in line with numbers posted for the
last few years.
The 2003 current account recorded a surplus
of 1.3% of GDP, unchanged from 2002, due
to strong growth in natural gas production.
With continued growth in this sector,
Turkmenistan anticipates more robust
merchandise trade and current account
surpluses in coming years. The government
reported, FDI of US$ 51 million during the
first four months of 2000. Production sharing
contracts with international oil and gas
production companies are the vehicle by
which the government hopes to boost the
current low level of foreign investment. 1
1 Economic and Political Overview, County Watch
Incorporated, 2005
98 99 00 01 02 03
* World Bank reports
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