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Turkmenistan Weekly News Analysis
April 2, 2013 - 1:31pm, by Natallia Moore
Last week, Turkmenistan held a two-day international conference “Turkmenistan and WTO Accession: Substantive Issues and Negotiation Process," organized by the US Agency for International Development (USAID) and the Ministry of Foreign Affairs of Turkmenistan, aimed at helping the country enter the World Trade Organization (WTO). Turkmenistan expressed its desire to join the World Trade Organization at a January 19 Cabinet session, and President Gurbanguly Berdymukhamedov said that membership will bring Turkmenistan “real dividends in economic success.”
Turkmenistan has been seriously pursuing WTO accession since 2011, when European Commission President José Manuel Barroso unexpectedly extended the invitation during a January 14-15 visit with Berdymukhamedov to discuss EU-Turkmen co-operation and trade of energy resources. Barroso plied the Turkmen leader to join, saying that Turkmenistan’s role in regional and global trade would become more significant and that it would assist Turkmenistan’s socio-economic development by opening new foreign investment opportunities and creating jobs. "If it hadn't been for Barroso, we would not have considered joining the WTO for a long time," said Charymurad Kodzhiyev, an instructor in economics at the Ashgabat Institute of International Relations. Not only had the European Union promised assistance to Turkmenistan in the accession process, but last month, US Assistant Secretary of State for South and Central Asian Affairs, Robert Blake, promised technical assistance for this purpose.
While WTO membership could open Turkmen goods to international markets and could help private businesses, the country needs to undertake major economic reform. First and foremost, Turkmenistan lacks a market economy, according to finance reporter Aleksandr Chelnokov, speaking to Central Asia Online. "Instead, the economy follows the same planned model inherited from the USSR," he said. The country’s closed economy will be the main obstacle to its full membership, Andrey Suzdaltsev, deputy dean of the department of world economics and politics of the Higher School of Economics (Moscow), said in an interview with Radio Free Europe/Radio Liberty (RFE/RL). Kate Mallinson, a senior political risk analyst at the London-based Grayson Pender Wordsworth think-tank, said that the small circle of corrupt elites running most of Turkmenistan’s economy has no incentive to change and “is under-qualified to undertake such a significant transition to a market economy."
Accession in general has been a challenging process for post-Soviet countries – with Russia negotiating for 19 years before joining in 2012, Tajikistan applying in 2001, only to become a full member this past March, and neighboring Kazakhstan beginning in 1996, and continuing its negotiations. However, perhaps WTO accession is an ambition for the next generation; a team of Turkmen youth took first place in the Junior Achievement Company of the Year contest among 17 teams from nine countries of the Asia-Pacific region, demonstrating their entrepreneurial skills and global understanding of the market.
Another ambitious goal Turkmenistan has set for itself is to optimize its capacities in the gas sector, increasing its production of natural gas to 77 billion cubic meters, including about 44 billion cubic meters for export. The challenge is great, as according to the latest BP Statistical Review of World Energy, Turkmenistan reduced its gas output from 66.1 bcm in 2008 to 42.4 bcm in 2010. However, Fast Market Research, an online aggregator and distributor of market research and business information, seems to share Turkmenistan’s optimism regarding gas production, saying in their latest report from April 1, that Turkmenistan “will increase at an average annual rate of 8.6% over the course of our forecasting period, rising from 72bcm in 2013 to 152bcm in 2022 as production rises with new output and enhanced development of existing fields. While domestic demand will increase from 23bcm in 2013 to 44bcm in 2022, increased production will still allow for exports of around 108bcm.” However, the report also notes that the poor quality of remaining gas deposits will increase the costs of development, with sour gas in high pressure, high temperature reservoirs making extensive processing necessary.
This week (April 1 – 7), Turkmenistan is holding a “health and happiness week,” which for many will be more of a basic training rather than a celebration, as governmental officials, regular citizens, students, and apparently even foreign guests will be forced to participate in state-orchestrated sporting events and contests.
Dashoguz residents were recently ordered to paint their houses white and roofs green at their own cost, and cut trees and bushes all around the city airport and along the road from the airport to the city, in anticipation of the President’s visit on March 28. Turkmenistan has a strange practice of forced subbotniks, in which citizens are ordered to cut or plant the trees, which seems out of step with Berdymukhamedov’s recently stated goal of turning his country into a flourishing oasis.
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