Turkmenistan: Leader Proclaims "Open Door" Investment Policy

While he certainly has played hard-to-get, the signals continue to suggest that Turkmen leader Gurbanguly Berdymukhamedov, sooner or later, will opt to export some of the Central Asian country's natural gas via the planned trans-Caspian pipeline.

Attending the opening of an energy conference in Ashgabat, Berdymukhamedov extended a broad invitation to energy companies around the world to help develop Turkmenistan's vast reserves of gas, according to the semi-official Turkmenistan.ru website. In particular, the Turkmen leader encouraged investment from energy companies from the United States, Europe and East Asia, saying that firms from those areas can be depended upon to propose "interesting initiatives that meet foreign requirements." He stressed that Turkmenistan was now embracing an "Open Door" policy, in which "foreign partners" could expect to operate under "international norms" and enjoy "a legislative foundation that gives equal conditions and possibilities to all those wishing to do business in Turkmenistan."

Under Niyazov, a vigorous proponent of Turkmenistan's neutrality, Russia tended to have a monopoly on trade and export opportunities. [For background see the Eurasia Insight archive]. During Niyazov's tenure, Moscow succeeded in establishing a stranglehold over the export of Turkmenistan's most precious commodity, gas. Nevertheless, Russian officials often became vexed by Niyazov's mercurial ways. [For background see the Eurasia Insight archive].

Berdymukhamedov, having moved deliberately for the past year or so as he consolidated his power in Ashgabat, now seems ready to pick up the pace in dismantling deceased dictator's cult of personality and ending isolationist practices. To underscore his determination to toss Niyazov's foreign-policy legacy into the dustbin of history, Berdymukhamedov will be attending the NATO summit in Bucharest in early April.

In a figurative ribbon-cutting of the Open Door policy, Turkmenistan will be purchasing three Boeing 737-class aircraft, according to a March 27 announcement. Overall, Ashgabat has pledged to buy 20 Boeing aircraft by 2020. To underscore Ashgabat's aeronautical tilt toward the West, the national airline on March 18 announced that it would be auctioning off a large section of its Soviet-era jets, prop planes and helicopters.

Berdymukhamedov's geopolitical outlook has been enshrined in a foreign policy strategy document that is designed to guide the Turkmen policy-making process for the next five years. During a televised meeting March 20 with leading members of the country's diplomatic corps, Berdymukhamedov made it clear that Turkmenistan would diversify its economic and political partners.

"Maintaining relations with our immediate neighbors with whom we have common historical, cultural and economic roots, is among our foreign-policy priorities," Berdymukhamedov stated. "At the same time, we will boost our partnership with such countries as Russia, China, the United States and European Union countries."

Even before its finalization, the Turkmen leader had taken steps to put into practice the ideas outlined in the strategy document. In recent weeks, Turkmenistan has taken steps to repair relations with Azerbaijan and Uzbekistan. [For background see the Eurasia Insight archive].

Murad Esenov, a Turkmenistan expert, suggested that personality is heavily influencing the country's shift, adding that Niyazov's policies were heavily influenced by his personal preferences, whereas Berdymukhamedov tends to have a much more pragmatic view of the world. "The Turkmenbashi [Niyazov] could not stand both Heidar Aliyev [the former Azerbaijani leader] and Islam Karimov [the Uzbek incumbent]," Esenov said.

If Turkmen government estimates are to be believed, the diversification of the country's foreign policy, and, most likely, of its export routes, is needed. State media outlets reported March 27 that Turkmenistan plans a more than three-fold increase in gas production by 2030, to 250 billion cubic meters (bcm) annually, up from the current level of roughly 80/bcm.

Turkmenistan has committed already to a Russian plan to expand an existing export route, known as the Prikaspiisky pipeline. [For background see the Eurasia Insight archive]. Construction on a pipeline to China is also underway. In addition, there are two other existing export pipelines, one, dubbed Central Asia-Center, that goes to Russia, and another, smaller tube to Iran.

But with questions lingering over whether the Prikaspiisky upgrade is ever actually expanded, there would seem to still be room for the US- and EU-backed trans-Caspian pipeline (TCP). [For background see the Eurasia Insight archive].

Analysts say Turkmen foreign policy choices will be dictated by energy-sector considerations. Berdymukhamedov's recent flurry of diplomatic activity was "made out of necessity to attract foreign investment [to the energy sector]," said Annette Bohr, an associate fellow at Chatham House and an expert on Turkmen foreign policy.

Among Turkmenistan's more noteworthy moves in recent weeks was the decision to have the British accounting firm Gaffney Cline conduct an audit of Turkmen gas reserves. [For background see the Eurasia Insight archive]. "This audit was a condition set by the US Department of Energy for having a tender to conduct Trans-Caspian Gas pipeline feasibility study," Bohr said.

Oleg Lukin, Ashgabat-based energy expert with the Neftegazovaya Vertical journal, suggested that Turkmenistan needs new routes because two existing pipelines would be unable to handle the planned growth in production. "The Central Asia-Centre pipeline that is connected to Russia is unable to expand substantially. And the Iranian pipeline was initially constructed with limited capacity," he says.

If Berdymukhamedov's projections about Turkmenistan's gas capacity are accurate, all of the country's friends, both old and new, should be happy. The Caspian Basin energy contest does not have to be a zero-sum game, Bohr suggested. "It all depends on the gas audit results."