Turkmenistan

Capital Ashgabat
Population 5.41 million (2018) CIA
President Gurbanguly Berdimuhamedov

Introduction

Turkmenistan is Central Asia’s least populous and most authoritarian country. It is isolated in its policy and its borders. Unlike other post-Soviet countries, Turkmenistan has not rushed to open to the world, capitalize on tourism, or send its citizens out in search of prosperity: it is difficult for foreigners to enter and for residents to leave. Turkmenistan has Central Asia’s largest border with Afghanistan, its neighbor to the southeast. Other border nations include Kazakhstan to the northwest, Uzbekistan to the north and east and Iran to the south. It spans the shores of the Caspian Sea to the west.

The economy is propped up by its natural resources: it has the world’s sixth largest natural gas reserves. Its politics are driven by authoritarian government, the second president-for-life, Berdimuhamedov, determined to keep a hold on stability—his own power and the country’s—despite its porous border with Afghanistan. Freedom House has rated the country’s authoritarianism on par with North Korea and Sudan. Its policy is defined by the struggle between Turkmenistan's heritage of being a linking country, dating back to the age of the Silk Road, and the modern pursuit of sovereignty above all else. Turkmenistan is a difficult country to tackle: there is little promise that can be made of its future development or openness to partners—but its inner dynamics are vital to have a comprehensive approach to the region with which it is forced to interact and within which it acts.

Turkmenistan, like the other countries in Central Asia, is a bridge between the east and the west. It has a long heritage of nomadic tribes and clans without allegiance to any defined state. The people went through a merry-go-round of empires: the ancient Iranian Empire, the Turkic Oghuz, the Mongols, and finally, incorporated in the Russian Empire. Turkmenistan is vast, arid, and unfriendly to would-be conquerors: the Russians first attempt at conquest failed, but the land was eventually brought under control—in as much as a scattering of trial nomads can be controlled by a capital thousands of miles away. It was brought into the Soviet Empire, and its people were given a title, a nationality, and a border for the first time in 1924. Soviet policy sliced the region into new countries with newly defined peoples, but the nomads of Central Asia were more fluid than that: ethnicities and languages intermingled, compounded by exiles sent to the inhospitable terrain from Ukraine, South Korea, and Russia.

During the Soviet Union, Turkmenistan was the boonies of the outer periphery. Niyazov, a Communist Party bureaucrat, was appointed by Gorbachev to clean up corruption. With the breakup of the Soviet Union in 1991, Niyazov took power for himself. Turkmenistan voted unanimously in a referendum to preserve the Union, but to no avail. The Soviet Union splintered, and Niyazov appointed himself the “Leader of the All the Turkmen”—Turkmenbashi. The famed dictator closed off his country, ruled with an iron fist, and erected a cult of personality at the same rate as golden statues of himself. The self-obsessed autocrat, who renamed months of year after himself and his mother and wrote a bible-like book—required reading in Turkmenistan—used hydrocarbon resources to build his own wealth. His ruler-for-life status was cut short by the his untimely death in 2006. But another despot rose to take his place, Gurbanguly Berdimuhamedov. In the true House-of-Cards like maneuvering, Berdimuhamedov, a health minister and deputy prime minister, was not meant to inherit power. But he negotiated a back deal with Turkmen power brokers, and the rightful heir was carted off and sent to prison shortly after Niyazov’s death. Berdimuhamedov continued, unbroken the legacy of repressive regime and personality cult (though he did replace Turkmenbashi’s bible with his own, now required reading, the other relegated to dusty bookshelves). Berdimuhamedov has continued the policies of isolation, living off resource wealth and ignoring the instability on Turkmenistan’s 744 kilometer border with Afghanistan. The security environment in Turkmenistan is unsustainable and worsening, but like Nero, the leaders in Ashgabat seem content to fiddle away.

Turkmenistan’s economy is based in its vast hydrocarbon resources. But its authoritarian government, eager to fill their own coffers, have mismanaged the resulting funds, spending them on lavish palaces and ostentatious infrastructure projects—which no one actually uses—rather that investing wisely. It is highly dependent on China, giving Beijing sizable leverage over Ashgabat: China is the main source of foreign loans to Turkmenistan, and the country owes vast amounts of outstanding debt to China. China is also the only real export market for Turkmen gas. and its financial resources are faltering, threatened by sustained lower hydrocarbon prices and competition from other global producers. The country produces cotton, as well, and relies on exploitation of its population for human labor to meet quotas while keeping prices low. Very little of Turkmenistan’s citizens live or work abroad, preventing remittances from offsetting domestic poverty. In its isolation and corruption, the country has not been an attractive spot for foreign investors, and this is unlikely to change in the near future.

Turkmenistan is important not for its potential (of which it has much, but which is not like to change anytime soon) but because it is a foil to other countries in the region. Like Uzbekistan, Turkmenistan had a repressive, isolating leader who died, and another who took his place. But Uzbekistan’s new leader turned away from isolation and embraced engagement; Turkmenistan’s has not. Like Kazakhstan, the country is rich in natural resource reserves. But Kazakhstan has not been made to face a transition of power and has done a far better job managing its revenues and building its economy with China, Russia, and the west. Turkmenistan has had an antagonistic relationship with Russia—to the point where Russia has banned migrant workers from Turkmenistan. All other Central Asian countries have a more favorable relationship with the northern power. Indeed some, like Tajikistan, are dependent on remittances to make their budget work. Turkmenistan, like the other Central Asian neighbors, borders one of the world’s most unstable regions, but unlike its neighbors, it has little cooperation with or support from other powers, like China, Russia, the U.S., or the EU: Turkmenistan is alone. This has profound implications for the country and the region. Ironically, Turkmenistan’s myopic pursuit of stability makes it the most wild card of all Central Asian states. Turkmenistan should be studied not because of what it can give, but because it is demonstrates what could have happened (or may soon happen) to its neighbors, t a key to what Central Asian states should seek to avoid.

Quick Facts

Basics
Capital City Ashgabat
Country Population 5.7 million
Largest City (Population) Ashgabat (728,000)
2nd Largest City (Population) TŸrkmenabat (235,000)
3rd Largest City (Population) Dasoguz (167,000)
4th Largest City (Population) Mary (115,000)
5th Largest City (Population) Balkanabat (88,000)
President (Dates) Gurbanguly Berdimuhamedow (2007-Present)
Prime Minister (Dates) N/A
Currency Manat
Politics
President Gurbanguly Berdimuhamedow
Prime Minister N/A
Freedom House Score (1=Free, 7=Not Free) 7
Ruling Party Independents
Past Presidents (Dates) Saparmurat Niyazov (1990-2006)
Past Prime Ministers (Dates) Han Ahmedow (1991-1992)
How Central Banker is Appointed Appointed by President
Average Voter Turnout in Last 5 Elections
(% of Total Population)
97.09
Trade and Commerce/Economics
10 Major Import Partners
(% of Total Imports)
Exports Major
Partners (10)
Major Industries
by GDP
Top Exports Sanctioned by
(and Start Date)
Sanctioning
(and Start Date)
1. Turkey (26%)
2. Russia (12%)
3. Japan (8.3%)
4. Germany (7.6%)
5. South Korea (7.6%)
6. China (7.1%)
7. Italy (4.4%)
8. UAE(3.6%)
9. Azerbaijan(2.4%)
10. France (2.3%)
1. China (71%)
2. Turkey (5.8%)
3. Italy (5.4%)
4. Russia (4.6%)
5. Afghanistan (3.9%)
6. Kazakhstan (2.8%)
7. Romania(1.3%)
8. Georgia (1.1%)
9. Germany (0.72%)
10. Greece (0.57%)
Natural Gas
Oil
Petroleum Products
Textiles
Food Processing
Gas
Crude oil
Petrochemicals
Demographics
Largest Ethnic Groups
(% of Total Population)
Largest Religions
(% of Total of Population)
Population Living
Abroad
Turkmen (85.6%)
Uzbek (5.8%)
Russian (5.1%)
Sunni Islam (89%)
Eastern Orthodox (9%)
Unknown (2%)
2 million
Major International Organizations (and date of accession)
1 UN–1945
2 OIC–1992
3 OSCE–1992
4 World Bank–1992
5 IMF–1992
6 EBRD–1992
7 EAPC–1997
8 ECO–1992

Politics

Turkmenistan was not enthusiastic about breaking away from Moscow following the collapse of the limping Soviet System in the late 1980s and into the 1990s. In March 1991, the country voted in the referendum to preserve the Union, favoring the known status quo to the fear of unknown that accompanies a radical shift. Turkmenistan is marked by its conservative population. Unlike other countries in the region, it has never witnessed large-scale demonstrations for freedom, even in the nascent days of independence. The people are risk-averse: they want stability and protection. They find it in leaders who are all too eager to take the central role at the resource-rich country’s helm. The politics of Turkmenistan are centered around the position of president, who holds the final word on all issues. The legislative and judiciary exist, technically, but for all intents and purposes are hollow, inserted institutions rather than meaningful anchors of law and democracy. The politics in Turkmenistan are clan and tribe based, dependent on backroom deal conversations and negotiations. Personality matters: both presidents since the collapse of the Soviet Union have drawn on the cult of personality that has formed around them—at times, to the extreme. In reward to the loyalty of the people, the government provides free energy resources, bread, and public transportation. All of this happens in a country that has mismanaged its wealth of resources and stripped the land for personal gain, which down the road might result in a rise in public protest. But for now, against a backdrop of intense security, the leader still reigns supreme.

Executive

The president is the most important power in Turkmen politics. Officially, Turkmenistan is a presidential republic: the president is head of state and head of government. While political parties can be registered, all must support the presidential party—the Democratic Party of Turkmenistan; no opposition parties are allowed, and political gatherings are illegal unless specifically permitted by the government. But presidential power is not wielded in a vacuum: it replies upon a vast clan of informal, clannish networks and backroom negotiations. A fitting—if not ironic—example of this is the succession of the presidential power following the death of the first president, Niyazov: The speaker of the parliament should have by rights and law been the person to step into the position of president, but a lesser-know, not-as-powerful deputy and minister of health, Berdimuhamedov, was able to negotiate himself to be the successor, usurping the “rightful” heir to the Turkmen presidency. The unfortunate parliamentary speaker was arrested and imprisoned shortly after Niyazov’s death, and Berdimuhamedov rose to power, slipping seamlessly into the role created by President Niyazov.

For being one of the most powerful and feared men in Turkmenistan, Niyazov came to power by chance. In 1985, Niyazov was a communist bureaucrat in the Soviet Union—an engineer—when Gorbachev tapped him to be first secretary of the Communist Party of the Turkmen Soviet Socialist Republic. He was put in power, ironically, because Gorbachev though he had the proper predisposition to fight corruption in the sleepy Central Asian outpost. The rest of the story is the stuff of legend: following the collapse of the Soviet Union and the independence of Turkmenistan, Niyazov established himself as the Turkmenbashi—the “leader of all Turkmen”—and set about building his culture of personality. He unabashedly concentrated power in the executive. In 1992, he ran for president unopposed, winning an incredulous 99.5% of the vote. In 1994, he took this a step further, becoming the first leader of a former Soviet state to extend his term in office by holding a referendum to prolong his rule until 2002—setting a precedent that Azerbaijan, Belarus, Kazakhstan, Tajikistan, and Uzbekistan would all follow. In 1999, he did away with all semblance of rule of law and proclaimed himself president for life.

Turkmenbashi used his time in the executive to shore up power and run politics while horribly mismanaging the country. He undermined access to basic systems in Turkmenistan, cutting back on education and healthcare while heavily investing in the state security apparatuses. He enriched himself and his inner circle through Turkmenistan’s access to natural gas, petroleum, and cotton, stripping the land and overusing and underpaying for labor from the Turkmen workforce. To keep ministers loyal and on their toes, Niyazov frequently purged the government. He was fearful of any potential opposition to his power, and sent senior leaders and advisors to jail, exiled them, or, in extreme cases, had them killed. As no opposition parties were allowed inside the country, the most salient opposition formed outside Turkmenistan, created by exiled leaders. Niyazov lived lavishly in golden palaces: he maintained that it was not his desire to live in such opulence, but that the people, in their mindset and dedicate to him, demanded it. He erected golden statues to himself throughout the capital city, Ashgabat. He renamed the months of the year and the days of the week to include his name and the name of his mother, among other things. He wrote a book of his musings—akin to a Bible of Turkmenistan—which became required reading for Turkmen students. There is a Turkmenbashi quotation to suit every situation. Niyazov’s rule as president for life ended with his sudden death in 2006. He was succeeded in a non transparent transition by Berdimuhamedov.

Berdimuhamedov, a dentist, took over the position of president of Turkmenistan, ostensibly replacing Niyazov’s cult of personality with his own. In the February presidential election, he won 89% of the vote; he was re-elected in 2012 with 97% of the vote. In 2016, he amended the constitution to extend the term for president to seven years and remove mandatory retirement of the president at age 70, essentially paving the way to serve as president for life. At first, observers thought the change of power might result in a more open Turkmenistan. Though Berdimuhamedov specifically commented that Turkmenistan would not be a democracy, he took steps to liberalize the country’s travel restrictions and allow internet cafes in urban centers. He opened the country to foreign contracts, eager to lap up Turkmenistan’s vast reserves of natural resources. Berdimuhamedov initially undid some of Niyazov’s more opulent policy, including reverting the days of the week and months of the year back to their pre-Niyazov names. He extended the education system again, and initiated funding and reform of the education, health care, and pension systems, all of which had suffered under Niyazov. In some ways, Berdimuhamedov curtailed the cult of personality of the president, giving up his right to rename landmarks, institutions, and cities. He claimed that he would set out to remove the gold statues of Niyazov—but in 2015, a golden statue of Berdimuhamedov on a horse was erected in Ashgabat. He, too, wrote a book that became required reading in schools, discarding Niyazov’s book in the process. As the years under Berdimuhamedov’s rule have passed, observers have concluded that his regime differs little from that of his predecessor: the executive in Turkmenistan is as strong as ever, and not changing any time soon.

Legislative

The parliament in Turkmenistan is best defined by what it cannot do rather than what it can. Its two parliamentary bodies—the unicameral Halk Maslahaty and unicameral Mejlis—are entirely subservient to the executive branch and the will of the president and his government. The Halk Maslahaty is the People’s Council: a parliamentary group of up to 2,500 members, elected by popular vote and by appointment. The body meets annually. The Mejlis is the Assembly, and comprises 50 members—soon to be 65—who are elected by popular vote for a five-year term. The Halk Maslahaty is the more powerful body, which has the power to dissolve the Mejlis. The president governs both bodies, effectively putting the legislature at his whim.

Judiciary

The judiciary, too, is under presidential control. While the constitution envisions an independent judiciary, the president is responsible for the appointment and dismissal of all judges, stripping the branch of any independence; there is no legislative review. Each judge is appointed for five year.. The court system comprises a Supreme Court, located in Ashgabat. The country also has district and city courts for local cases. Turkmenistan also has a supreme economic court for businesses and ministries. While rule of law technically exists in Turkmenistan, in practice its enforcement is arbitrary and up to the discretion of the executive and its interests, making it unreliable.

Media, NGOs, and Civil Society

There is virtually no free and independent media in Turkmenistan. Technically, the constitution makes allowance for media freedoms, but it is not executed in practice. The government controls all media outlets. Even the two marginally free media sources—Akalar and Galkynys—were established under a mandate from the president. It is difficult for foreign press to receive accreditation or right to travel to Turkmenistan, and while in the country, they run the risk of being imprisoned or bothered. Over the years, journalists—especially those working for the western press—have reported incidents of being accosted or hassled by unnamed assailants. Some have been jailed. Others have experienced difficulty with sources or those they interview for stories. There is an unspoken rule that conversations are recorded or under surveillance, preventing honest discussion and exchange. NGOs do not operate freely; any organization must register with the government, and they are heavily regulated and monitored. Many “independent” research centers are government-run or have ties to members of the government.

Conclusion

Turkmenistan’s politics are simultaneously straightforward and painfully opaque. The country’s constitutional setup ostensibly establishes many of the tenants of a republic, such as freedom of the press, a legislature, and an independent media, while in practice none of these are followed. Power is concentrated exclusively in Turkmenistan’s executive branch, specifically, orbiting the personality cult of the president. This should make political understanding simple, too. But, in favor of nuance, there is so much happening behind the scenes that will never see the light of day in a published document, transcript, or declaration. Turkmenistan’s politics are best defined by the interplay of clannish politics, loyalty, and optimization of benefits for the group in power, using others to keep and expand that power without allowing for any opposition to grow. This type of politics takes extensive networks and behind the scenes wrangling to stay ahead of the curve. While an outsider is not likely to get a peek behind the drapery anytime soon, it is useful to know that in Turkmenistan, nothing is visible to the eye, but everything is hidden in plain sight.

Geopolitics

Turkmenistan not only has the most repressive of the Central Asian regimes but is also the most isolated. Ashgabat adopted a declaration of permanent neutrality in 1995, and has since abstained from membership in any international security organization. A major exporter of natural gas, much of Turkmenistan’s foreign policy is revolved around securing export markets and building pipelines, which Russia has often tried to obstruct to keep Turkmenistan’s gas exports in its pipeline system. Reflecting the weary relationship, Turkmenistan is not a member of the Russian-led Eurasian Economic Union (EEU) or the Collective Security Treaty Organization (CSTO), and is only an observer in the loose Commonwealth of Independent States (CIS).

The main external security threat to Turkmenistan stems from its southern neighbor, the war torn Afghanistan with whom it shares a 500 mile (804-kilometer) border. Fearing the spillover of instability, Turkmenistan, in the early stage of the war in Afghanistan allowed the United States to use the Ashgabat airport to transport supplies to Afghanistan. This is notable because Turkmenistan has vowed to permanently neutral; this deal clearly violated that. Lately Turkmenistan has deepened security cooperation with Iran to manage the threats posed by the long borders that both countries share with Afghanistan. But Turkmenistan continues to engage foreign countries on limited, ad hoc basis. Beyond energy questions and summit meetings, it does not have particularly close relations with any of the other Central Asian states. And unlike the other Turkic nations of Central Asia and Azerbaijan, Turkmenistan is not a member of the Turkic Council.

The regimes of the Turkmen president Gurbanguly Berdimuhamedov and his predecessor Saparmurat Niyazov have viewed the outside world with suspicion and as a threat to their closed regimes. Endowed with vast natural resources and removed from the regional great powers, Turkmenistan has consistently considered close connections with the outside world more as a threat than opportunity. Turkmenistan maintains one of the world’s strictest visa regimes, requiring a visa from all foreign visitors, and only allowing its own citizens to leave the country if they have a “certificate of non-conviction,” which proves that they have not committed any crimes.

Regional

Uzbekistan

The Relationship between Turkmenistan and Uzbekistan nearly broke down in 2002, when Turkmenistan accused Uzbekistan’s security services for an involvement in a failed coup attempt. Relations remained strained until the death of Uzbekistan’s president Islam Karimov in 2016. Despite the poor relations, converging interests occasionally trumped personal animosity. The construction of the Turkmenistan-China gas pipeline through Uzbekistan commenced in 2007 and completed two years later. The new Uzbek president Shavkat Mirziyoyev paid his first foreign visit to Turkmenistan to turn a new page. Following the rapprochement on the head of state level, in 2018, Turkmenistan and Uzbekistan agreed on a joint exploration and exploitation of hydrocarbon resources in the Caspian Sea.

Iran

Home to over 700,000 Turkmens, Iran was the first country to recognize Turkmenistan’s independence after the collapse of the Soviet Union. The shia-majority Islamic Republic and the sunni-majority, secular Turkmenistan would not seem as natural partners on the offset. Turkmenistan has ill-treated its small shia-minority and culturally it has more common with other Turkic nations than Iran. But the common threat posed by the long borders with Afghanistan have resulted in declarations to coordinate anti-terrorism activities, though details on the activities of the two opaque regime’s activities are scarce.

Global

Russia

Turkmenistan has been weary of the Russian influence in the region. It has not joined the Russian-led Eurasian Economic Union or the Collective Security Treaty Organization, and is only an observer in the Commonwealth of Independent States. In the early years after the collapse of the Soviet Union, Russia and Turkmenistan struggled over energy politics. Russia sought to pressure Turkmenistan to use Russian pipelines to export its vast natural gas wealth, but Turkmenistan was weary of tying itself too closely to Russia. In early 2000s, Turkmenistan sought to deliver gas to European markets on the proposed Nabucco pipeline, which was planned to reduce Europe’s dependence on Russian gas. The project was eventually shelved to Russia’s delight, and in the end, major opening to Turkmen gas exports came from the east, not the west. The Chinese-funded Central Asia-China gas pipeline was completed in 2009 to transport Turkmen gas to China, which has emerged as the main destination for Turkmen gas.

Aside gas disputes, tensions between Ashgabat and Moscow were exacerbated by Turkmenistan’s nationality policies. Turkmenistan has restricted the use of the Russian language, closing schools, and in early 2000s, Turkmenistan required dual Turkmen-Russian citizens to renounce their Russian passports or to leave the country. But after the pipelines were built and the Turkmen leader Niyazov perished, Turkmenistan and Russia have found openings for rapprochement. In 2017, the two countries signed a strategic partnership agreement to facilitate economic and security cooperation on ad hoc, mostly informal basis. Current prospects for the Russia-Turkmenistan relations remain cordial but limited. Under the current leadership, it is unlikely that Turkmenistan would even consider closer integration with Russian-led institutions, but at the same time, there are no major disputes causing tension between Moscow and Ashgabat.

China

The vast majority of Turkmenistan’s gas, accounting for 70% of total exports, is exported to China on the Central Asian-China gas pipeline, which was completed in 2009 on Chinese funding. The two are close economic partners, but politically Turkmenistan has steered away from closer integration with China. Unlike every other Central Asian country, Turkmenistan is not a member of the Shanghai Cooperation Agency and, in contrast even to countries like Iran and Afghanistan, has abstained from an observer seat. Turkmenistan continues to view China primarily as an economic, not political partner. Ashgabat has eyed on the Belt and Road Initiative to upgrade Turkmenistan’s infrastructure, but increasing connectivity forces Turkmenistan to reassess its self-imposed isolation.

The United States

Pipeline politics and the war in Afghanistan have dominated the relations between the relationship between United States and Turkmenistan. United States has viewed the Turkmen gas as an alternative to the Russian gas for its European allies, and has been supportive of new pipelines, which reduce Europe’s and Central Asia’s dependence on Moscow. But political engagement between Ashgabat and Washington has stayed limited. In the early 2000s, Turkmenistan allowed the American military to route a small amount of supplies to Afghanistan via the Ashgabat airport, and participated in American-led projects to better equip and train border guards, but refused to grant the US any military bases in the country. For United States, Turkmenistan’s value is instrumental in securing the borders of Afghanistan or as a source of energy for its allies, but Turkmenistan has kept its distance.

Conclusion

During the Soviet era, Turkmenistan was the end of the world—the place where no one wanted to go and no one cared what was going on. It has remained that way after the collapse of the Soviet Union, and plays little to no role as a regional or international leader. The country is so wrapped up in its own domestic issues and dysfunctional, limping economy that it cannot put together a comprehensive plan to better relations with its neighbors. It has sour relations with countries that are natural allies to others in the region, like China, Russia, and Iran. The country’s proclaimed neutrality looks more like a cop-out, a joke, than a real statement a withheld might. Its most regional activity is its negotiation on the status of the Caspian Sea, but even that is a selfish posturing for more natural resources than a show of power and cooperation, which the isolated country neither has nor appears to want anytime soon.

Economics

Turkmenistan’s economy is exclusively dependent on hydrocarbon resources. The country boasts the world’s sixth largest reserves for natural gas, which has been more a curse than a blessing. The authoritarian government in Ashgabat has done little to diversify away from the revenues of oil and gas, despite the model’s lack of long-term sustainability. Turkmenistan’s most recent GDP, from 2016 estimates, was $36.18 billion. The statistical office of Turkmenistan has predicted 6.2% growth, which critics argue begs credulity. The natural resource wealth has been poorly managed by Turkmenistan’s centralized economy—a holdover from Soviet times. Bewilderingly, the government has not worked to move the country away from its hydrocarbon dependence. This does not bode well. There have been no reforms from the Turkmen government to create a hospitable environment for foreigners: there is no guarantee for property rights, and the country is generally not welcoming to outside financing. This is perhaps ironic, given that Turkmenistan, despite its ostensible wealth, owes China a considerable amount given its desire to not partake in business that might threaten its sovereignty.

The Turkmen people do no fair well in this climate. Unemployment is said to be at 11%, but it is probably higher, given the unreliability of self-reporting. Underemployment is also an issue in Turkmenistan, with many Turkmen working low-paying labor jobs to spur the country’s cheap cotton and manufacturing markets. Niyazov, the first president of independent Turkmenistan, de-funded the education system and prioritized life outside the white-collar sphere, leading to a dearth of Turkmens who can operate above a basic level of education. Foreign work, too, is closed to Turkmen citizens. Disputes with Russia have led to Moscow refusing to admit Turkmen migrant workers, closing off the economic portal of remittances, which could help prop up struggling Turkmen families.

China is the currently the largest buyer of Turkmen gas. The Central Asian country is trying to diversify away from Russia as a buy and as a monopoly of the pipeline network. To that extent, in 2010, new gas export pipelines began bringing Turkmen gas to China and northern Iran, ending Russian pipeline monopoly on the region. Turkmenistan is also part of TAPI—the Turkmenistan-Afghanistan-Pakistan-India pipeline, which has struggled due to financial and security concerns. But China has, again, swooped in to save the day, expressing its interest and perhaps saving the project. Turkmenistan has struggled with problems in its natural resource market before: the country is home to the Galkynysh gas field, which holds approximately 21.2 trillion cubic meters of gas, making it the second-largest volume of gas in the world. It is controlled by Turkmenistan’s state-owned company, Turkmengaz, run through the Ministry of Oil and Gas. A key aspect of this wealth is finding buyers. In 2016, Turkmenistan stopped its gas sales to Russia; shortly thereafter, in 2017, the country stopped selling to Iran, as well. Turkmenistan’s almost exclusive buyer is China, which continues to bring in flows of revenue but has mounting political costs in the background, which Ashgabat is unwilling to confront. The country also has oil reserves, held in the Koturdepe, Balkanabat, and Cheleken fields near the Caspian Sea, with approximately 700 million tons.

The final leg to Turkmenistan’s economy is cotton. Like its neighbors, the country has an easy and cheap cotton industry—one that relies chiefly on forced labor from its citizens. While it might not make up a core aspect of its economy, the legacy of textile—Turkmen rugs—is an important part of legacy and heritage on the vast arid land.

Trade Snapshot

Turkmenistan’s has had a generally positive trade balance, though exports dipped precariously in 2008, recovering in 2010 and hitting an all-time peak in 2014. Its exports are anchored by its extensive hydrocarbon resources—petroleum gas comprised 74.5% of all exports, accounting for $5.26 billion; it was followed by crude petroleum, making up 6.86% at $484 million; and refined petroleum, accounting for 3.3%, with $233 million. Like other countries in the region, Turkmenistan is a cotton producer, and combined cotton exports made up 5.8%—just over $400 million.

Though Turkmenistan is wealthy in hydrocarbons, neither its economy or its partnerships are diverse: the market is dominated by China, which imports 71% of all Turkmen exports, 98%—$41.9 billion—of which is petroleum gas. Turkey, Turkmenistan’s next-biggest trading partner, pales by comparison: a mere 5.8%, almost all cotton, for a total of $413 million. Italy makes up 5.4%, again, nearly all petroleum, for a total of $381 million. Next is Russia, a country that has the potential to be a larger trading partner but isn’t, due to Turkmenistan’s wariness and aggression towards Russia and Moscow’s impatience in dealing with a petulant Ashgabat. Russia imports few hydrocarbons from Turkmenistan, instead, 66% is “special purpose ships,” 15% are propylene polymers, and 9.2% cotton. Afghanistan is another key trade partner, almost exclusively built on hydrocarbons, accounting for 3.9% of Turkmenistan’s exports, 62% of which is petroleum, totalling $172 million.

Because the country’s internal industry is so driven by natural resource production and export for other players, it has little time to develop its own domestic small and medium enterprises to cater to consumer needs. Similarly, the atmosphere isn’t welcoming for foreign companies to set up shop to cater to Turkmen residents—not that it boasts a spending middle class, anyway. Most of Turkmenistan’s imports are products to support its hydrocarbon industry and consumer goods. Iron is the largest import, comprising 6.8% of the market. It is followed by heating machinery, with 4.8%. Apart from those two leading products, the rest of the import market is scattered across consumable food items, products to wear, and products to watch. The import market is led by Turkey, which accounts for 26% of the market, sending over $1.23 billion worth of iron structures and consumer goods. Russia is second, with 12%, supplying mostly pipes and values for Turkmenistan’s hydrocarbon industry, at $561 million. The next two, somewhat surprisingly, are Japan, with 8.3% and South Korea, with 7.6%: both export machinery and raw materials. Germany is also in the top set, representing 7.6% of imports to Turkmenistan, mostly machinery and tractors for $363 million. Finally, China, too, with 7.1% of the import market, sends pipes and valves to its Central Asian partner, along with consumer goods, for a total of $338 million. As a point of interest: though Georgia is not in the top trade partners, the Caucasian country gets $71.2 million worth of its refined petroleum from Turkmenistan.

Foreign Money Flows

There is almost no foreign investment flowing in Turkmenistan. Even U.S. aid programs give markedly low sums—below $1 million—in comparison to other countries in the region. There are however, large sums of FDI stock in the country, totalling $31 billion. Flows have come to a near halt because there is fear of money being siphoned off into private accounts rather than going to projects of need. Businesses are worried about the investment conditions, seeing opportunity but not wanting to run the risk of investment in a country where property rights are subject to the whim of the ruling government, and independent business is almost non-existent. Even large projects have difficulty getting a foothold without massive support of the corresponding government. While other economies in the region might turn to remittances to offset costs of living for poorer citizens, Turkmenistan’s isolate extends to labor, as well. It is difficult for Turkmen citizens to receive a permit to leave the country. Even if they could, few, if any, labor markets are open to them. There are almost no remittances sent to Turkmenistan from Turkmen citizens working abroad. The country also lacks inflows of foreign cash from tourism. There are few adventurers poking around, but not for want of desire: it is prohibitively hard to get a visa to Turkmenistan. It is expensive, tedious, and subject to change. In defiance of this, the government erected a ridiculously expensive airport, which no one uses, and an accompanying ornate tourist zone on the Caspian Sea, visite by few.

Conclusion

Who would invest in Turkmenistan? One that is willing to undergo a great deal of risk, with possibly no payoff. One who has the backing of the state apparatus. One who has stakes in the hydrocarbon or cotton industry—or an industry that supports one of those. Turkmenistan’s economy is tricky and not friendly to the outsider. But, like the rest of the country, it is worth understanding how business is done to envision how things could shift in coming years, as the potential crisis of succession plays out, or opportunities that might develop as the country opens up, given the overtures of its Central Asian neighbors. So much of Turkmenistan is potential, but first, it must set down the groundwork to encourage investment and secure the rights of those pursuing its markets.

Culture & Society

Turkmenistan is one of the most perplexing of the Central Asian countries. It is also the most difficult to access. Visitors require a special visa, pre-set accomodation at a specified hotel, and an official guide. Still, culturally, the country has an alluring mix of hyper modernity mixed with its ancient heritage as a country on the Silk Road and a country in the region of crossroads between east and west, north and south.

Those visiting Turkmenistan are greeted by a bird in flight: the country’s primary airport, situated outside the capital, Ashgabat, is a gigantic white falcon with its wings outstretched. Ashgabat itself is a blinding mixture of white marble, golden statutes, and futuristic architecture. The buildings are striking: a gigantic thermometer, the White Wheat Museum, the Neutrality monument, and the Fountain shopping mall, which has millions of liters of water flowing from the roof to sparkling pools below.

For its dazzling sights, though, Ashgabat can feel empty and sterile. Many of the original settlements and housing districts have been razed to create new, ultra-modern, shing complexes. In the middle of the desert, the city can be prone to excruciating heat spells and storms of dust. Throughout the city, one can see towering golden statues of the first leader after the fall of the Soviet Union, Niyazov, erected as part of the a cult of personality he constructed around himself. That original set has been joined by those of his successor, Berdimuhamedov.

On the city’s outskirts there are more quotidian markets and bazaars, with goods of cotton, rugs, and amulets. The Turkmen people tend to be superstitious, and they have a strong belief in trinkets, like prisms and breads, to ward off the evil eye. Turkmen rugs are known for their distinctive red color, originally made from natural dyes. The industry has always been important to Turkmenistan, and the country proudly has the world’s largest handmade carpet, measuring around 3240 feet squared. The country even has a holiday dedicated to the art, Turkmen Carpet Day, celebrated on the last Sunday in May. Though Turkmen carpets are traditionally made from wool, cotton is also an important part of the market and culture in Turkmenistan. Many Turkmen citizens, especially in the south, have worked on cotton farms their entire life.

About 160 miles north of Ashgabat, in the black sands of the Karakum Desert, is the Darvaza gas crater, a gaping pit of fire. Known as the “Door to Hell” or “Gates of Hell”, the flames have been burning since the 1970s. It is a tourist “hot-spot.” When it was originally discovered, Soviet engineers thought it would take only a couple weeks for the gas to burn off; instead, it has been burning for several decades. President Berdimuhamedov has incorporated the site into a national reserve.

Further out into the wilderness, Nisa, Merv—also known as Mary—are important parts of the ancient Silk Road, a vital aspect of Turkmenistan's heritage. Declared a culture capital of the CIS, Merv is equally an important religious city. In the the lore of Kerait Nestorian, Mary, the mother of Jesus, is buried in Merv. The city was also the site of what some believe was the bloodiest capture of a city, when it was taken by the Mongols. Today, the city is a UNESCO World Heritage site, filled with the ruins of history, and home to the continuing cotton culture of Turkmenistan.

Turkmenistan is a mix of the ancient and the very new and polished. There is intrigue in both. Because of the closed nature of the borders and the government, there is not much new culture that has flourished, but the rich history and pride of the people is still present. The travel guide requirement can be limiting, and it is difficult to discern the layers of Turkmen society. But the space is rich with history of the recent past, and open to those who might try to tackle it.

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