On September 3, President of the People’s Republic of China Xi Jinping arrived in Turkmenistan for talks with Turkmenistan’s President Gurbanguly Berdymukhamedov. The two leaders signed a purchase agreement for 25 billion cubic metres (bcm) of gas a year between China National Petroleum Corp and state firm TurkmenGas, that Berdymukhamedov told reporters would allow for the shipment of up to 65 bcm of gas annually. However, a senior Turkmen official, who asked not to be named, told Reuters on the sidelines of the talks that gas exports to China would reach that level by 2020. Exports to China were 20 bcm in 2012, according to the Turkmen government. China has existing contracts to increase purchases of Turkmen natural gas to 40 bcm in the coming years.
Recent agreements have China financing the second stage of development at the Galkynysh field, which will be implemented by China’s National Petroleum Corp, as well as the construction of a new line of the Turkmenistan – China pipeline. The two leaders also signed a Joint Declaration on Establishing a Strategic Partnership between Turkmenistan and China, stressing that, “regardless of any geopolitical changes in the world, development of mutual relations will remain a priority of Turkmenistan’s and China’s foreign policies.”
An unnamed source in Turkmenistan's gas industry told gazeta.ru that these agreements essentially make Turkmenistan into China’s gas appendix. “Ashgabat’s policy is such that Turkmenistan itself is not actively involved in developing its own gas industry and does not invest in it, instead inviting foreign partners [to do the job],” said the source. “And it is very suitable for China, as they have the funds and are ready to finance all the stages of resource development, while their appetites are constantly growing.” This has set a course giving Beijing significant control over Turkmenistan’s gas sector, and could potentially upset other suppliers, such as Russia, also interested in selling gas to China.
Without much detailed explanation, though suggesting large scale corruption and abuse within the government, President Berdymukhamedov shuffled around the country’s top law-enforcement officers, dismissing General Prosecutor Yaranmyrad Yazmyradov for “insufficient control over the work of public prosecutor’s offices;” Prosecutor of Ashgabat Movlamberdy Garaev for “serious shortcomings in his work and abuse of public office for private gain;” and Deputy Minister of National Security in charge of the city of Ashgabat, Baymyrad Altyev, for “serious shortcomings in his work.” Berdymukhamedov also reprimanded Deputy Minister of Internal Affairs of Turkmenistan Serdar Durdyev for “unsatisfactory performance of duties and shortcomings in his work.”
Berdymukhamedov touted Turkmenistan’s robust economy, with its reported 109.8 percent GDP growth and State budget revenues exceeding expenditures and resulting in a surplus. According to Berdymukhamedov’s government’s data, in comparison with last year, financial investments in Turkmenistan’s economy grew by 107.1 percent, and foreign trade turnover was nearly 20 billion US dollars, while the increase in wages amounted to 110.7 percent. Nonetheless, it is not likely that the small or medium sized entrepreneur in Turkmenistan will benefit from the flow of cash into the country, according to Turkmenistan Initiative for Human Rights which reports that Turkmen banks are short on cash and that since August 26,Turkmen businessmen can only withdraw a maximum of 8800 manats (US$3090) every month from their accounts.
Turkmenistan dramatically fell 27 places on the UN’s World Happiness Report, a report prepared by UN experts in psychology, economics, statistics and other areas, ranking 156 on the basis of indicators such as GDP per capita, life expectancy, freedom of choice, social support, level of corruption, and Gallup World Poll data. This year, Turkmenistan found itself in the 59th place, dropping from 32nd in the previous year’s report, which named Turkmenistan as the happiest post-Soviet state. This is ironic in light of President Berdymukhamedov’s proclamation of Turkmenistan’s Era of Mightiness and Happiness in February of 2012, which followed the Era of Great Revival.