The head of Turkmenistan’s state gas company Turkmengaz has been fired as the government remains mired in an debt dispute with Iran over historic gas deliveries.
At a government meeting on January 13, President Gurbanguly Berdymukhamedov announced that Ashirguly Begliyev was being moved to another unspecified post to be replaced by his deputy, Maksat Babayev,
Addressing deputy prime minister Yashigeldy Kakayev, who oversees the country’s energy sector, Berdymukhamedov complained that his “managers do not meet current requirement, and that is why I have taken this decision.”
In an organisational rearrangement whose significance it is still too early to fully divine, Berdymukhamedov said the head of Turkmengaz will have a ministerial rank. Accordingly, Babayev will now be designated a state minister and chairman of Turkmengaz state concern.
Begliyev had occupied his post since January 2015 — a relatively short tenure, but not one whose brevity is out of the norm for Turkmenistan.
As so many other Turkmen officials, the new Turkmengaz chief, Babayev, has almost nothing by way of a public profile. He was named deputy head of the company in April 2012. Within a year he had already earned a reprimand from Berdymukhamedov, officially for “allowing shortcomings during construction of a gas compressor station at the Malai field.” But after that, he seems to have managed to evade complete attention, other than from his intermittent appearances at the regular energy conferences in Turkmenistan.
Picture of the recently inaugurated Ashgabat international airport. (Picture of the recently inaugurated Ashgabat international airport.
With characteristic pomp, Turkmenistan unveiled an idiosyncratic new airport terminal in the capital shaped like a falcon thrusting through desert air, to acclaim last year.
And now, if a report in RFE/RL’s Turkmen service Radio Azatlyk is to believed, the $2.3 billion building in Ashgabat is slowly sinking into the sand.
Azatlyk reported on January 13 that representatives from Turkish construction company Polimeks, which built the terminal, have been summoned to President Gurbanguly Berdymukhamedov to answer for themselves. And, perhaps more importantly, to explain how this news got into the media in the first place.
Azatlyk cited its source as saying that a special commission has been set up to study the subsidence and come up with ways of resolving the issue. French construction giant Bouygues, which was also involved in building the terminal, has been drafted to effect repairs.
Problems apparently began to appear in December, when sheets of glass fell out of place and communication cables began to fail.
The airport was built in preparation for the 2nd edition of the Asian Indoor and Martial Arts Games — a 10-day event due to take place in September. A website dedicated to the games is up and going and counting down the seconds to the event kicking off.
These multiple transgressions might ordinarily lead to firing galore, but with the presidential elections due on February 12, it is more likely that Berdymukhamedov will keep his powder dry until then and then reshuffle the Cabinet. Either way, somebody will have to pay.
As Turkmenistan and Iran continue to trade accusations in their unfolding dispute over natural gas debts, Turkmenistan has suffered a dismal defeat in the information war.
In the middle of December, some media outlets began reporting that Turkmenistan was officially demanding $2 billion for unpaid gas bills accruing since Iran was slapped with sanctions in 2012. Outlets predominantly cited Radio Free Europe’s Turkmen service, which in turn, in a report on December 20, quoted what appeared to be official sources. That same $2 billion figure also cropped up in an English-language analytical piece on Baku-based Trend news agency on December 19 prophetically titled “Odd gas debt dispute between Iran, Turkmenistan.”
The problem with all this is that the Turkmen government never has made any public statement about the size of the alleged debt and has, until recently, avoided mentioning the disagreement at all.
Indeed, all public pronouncements in Turkmenistan about the state of ties with Iran has been cast in highly effusive and optimistic terms. When Iranian President Hassan Rouhani visited Ashgabat in March 2015, Turkmen state media declared an imminent surge of economic activity among the two nations.
“If last year , trade turnover between our countries was $3.7 billion, then today we have declared our goal of taking this figure to $60 billion within the next 10 years,” the government website stated at the time.
Considering Iran had by this stage failed to make payments to Turkmenistan for best part of three years, this was a generous prediction to say the least.
Turkmenistan has managed to avert the loss of one of its only two buyers of natural gas with some desperate, last-gasp negotiations.
Iran’s Mehr news agency reported on December 30 that Turkmenistan has signed a new gas deal despite demands from Ashgabat for Tehran to pay $1.8 billion in alleged unpaid arrears for historic gas deliveries.
Negotiations went right down to the wire, as Mehr news agency revealed.
“Due to Turkmens’ persistence on [threatening] to cut gas exports to Iran over claims of a $2 billion debt, the Iranian delegation left the negotiating table to return home. At the airport, Turkmenistan’s officials persuaded the Iranian delegation to come back to the negotiating table in hopes for reaching an agreement on gas delivery to Iran,” the news agency reported.
In the run-up to the agreement, a senior official with the National Iranian Gas Company (NIGC) signaled that Tehran was willing to adopt an intransigent position over the matter, leaving Turkmenistan with few options ahead of a Saturday deadline.
ILNA news agency cited senior NIGC representative Saeed Momeni as saying that Turkmenistan only provides three percent of Iran’s gas needs and that the shortfall could be addressed by drawing in internal resources if necessary. Iran has substantial gas reserves of its own, but has relied on Turkmenistan to supply areas in the north not connected to the national pipeline grid.
Turkmenistan’s education ministry has revived a practice from the days of the late President Saparmurat Niyazov to make the current leader’s written work a mandatory text in schools.
Passages and quotations from “The Fount of Wisdom” by Gurbanguly Berdymukhmedov are now to be included in the school curriculum, according to a report by the foreign-based Chronicles of Turkmenistan.
Niyazov’s own two-volume Rukhnama, which was described in state media as a holy text, has been gradually phased out of the classroom. But "The Fount of Wisdom" is not a wholly dissimilar work. The book is a compendium of proverbs and sayings that, as state media puts in, “reflect the people’s spiritual universe, world view, philosophy, moral principles and beliefs.”
This is far from Berdymukhamedov’s only contribution to school curriculum, as the Chronicles of Turkmenistan points out. Pupils in the seventh grade also have to study a novel by the president.
And the president has countless other works under his belt too.
There is his work extolling the virtues of tea, which was published earlier this year.
“Every Turkmen knows there is nothing tastier than tea brewed in water from a mountain stream and boiled on an open fire in a traditional teapot,” reads one passage cited by AFP news agency.
A team of International Monetary Fund specialists have concluded their latest visit to Turkmenistan and returned with some sobering observations on the state of the energy-dependent nation’s economy.
One key takeaway from a statement issued on December 6 is that the government will have to adopt greater measures to compensate for the expected persistence of low prices for oil and gas.
“Hydrocarbon prices remain low and trading partner growth is muted. As a result of these external factors, Turkmenistan’s overall economic growth has slowed down,” the IMF mission said in a post-visit statement.
These confluence of developments means that Turkmenistan is spending beyond its means, and that this trend is worsening.
“The current account deficit is expected to widen significantly in 2016 as a result of lower energy revenues, and in spite of an active policy effort to substitute imports with domestic production, promote exports, and reduce public investment expenditures,” the IMF mission said.
President Gurbanguly Berdymukhamedov has advanced import substitution as a cure-all panacea to his country’s troubles. Not that any officials have admitted there is anything wrong with the economy, which may be part of the problem, as the IMF mission implies.
“Amid multiple external policy challenges and a number of domestic reforms, stepped-up communication efforts to explain policy plans, their benefits as well as the possible side effects, would be helpful,” the fund delegation said.
Areas for improvement highlighted by the IMF mission included “increasing the efficiency of public spending,” improvement to banking regulations and taking more steps toward creating a more market-based economy and financial sector.
Turkmenistan’s routine harassment of reporters is taking on harsher and increasingly systematic qualities as authorities seek to clamp down on news of the country's economic crisis from trickling out.
In the latest example of such pressure, RFE/RL reported on December 6 that police in Turkmenistan arrested one of its contributors on suspicion of possessing dipping tobacco.
RFE/RL said Khudayberdy Allashov was detained at his home in the Dashoguz Province on December 3. Armed policemen also beat him and rounded up his mother and wife, the broadcaster said.
Nasvai, a popular and mildly intoxicating form of tobacco, is deemed illegal in Turkmenistan but is consumed widely all the same. RFE/RL quoted Allashov's wife as saying her husband had confessed under duress to possessing 11 kilograms of the tobacco, a charge reportedly punishable by up to seven years in jail.
"We believe these charges are part of a targeted campaign intended to silence our Turkmen Service and intimidate the Turkmen people," RFE/RL President Thomas Kent said in a statement.
Allegations of drug possession are one of the Turkmen government’s preferred methods for silencing independent reporters.
In July 2015, authorities arrested Saparmamed Nepeskuliev, who lived in the city of Balkanabad and also worked as a freelance reporter for RFE/RL’s Turkmen service, on suspicion of carrying pills allegedly containing narcotic substances. He was later sentenced to three years in jail.
More recently, another RFE/RL correspondent, 67-year old Soltan Achilova, was subejected to physical attacks by unknown assailants, only days after being interrogated by the police in late October.
A railroad linking Turkmenistan and Afghanistan, part of a regional project called the Lapis Lazuli Corridor, was inaugurated in an official ceremony on November 28 overseen by the leaders of both nations.
Turkmenistan’s President Gurbanguly Berdymukhamedov described developing transportation infrastructure as a top priority for his government and that railway and highway bridges traversing the Amudarya River are also to be put into commission in the coming days.
The goal of the Lapis Lazuli Corridor is to see Afghanistan connected to Turkey, and consequently Europe, through transit nations Turkmenistan, Azerbaijan and Georgia as part of a vision to relieve the country’s remoteness from lucrative trading routes.
Turkmenistan’s government portal cited Afghan President Ashraf Ghani as hailing the importance of the railway for international cooperation.
After a symbolic golden rail clamp was fixed into a place, a maiden consignment of 46 carriages crossed from Turkmenistan into Afghanistan.
The segment of newly inaugurated railroad stretches 88 kilometers from Atmyrat (formerly Kerki) in Turkmenistan to the Ymamnazar border crossing and ends in the Afghan settlement of Akina, the Turkmen state news agency reported. (Spelling for each of these locations vary wildly depending on transliteration or rendering). Two stations — Gulistan and Ymamnazar — have also been built from scratch along the route, the agency said.
Intriguing figures on China’s natural gas purchases reported by Russian state news agency TASS and relayed by website Eurasia Daily has shed some light on Turkmenistan’s current economic woes.
In the first nine months of 2016, China reportedly increased its overall imports of gas by 26.5 percent on the previous year, up to 71.6 billion cubic meters. The average price it paid for the fuel was $228 per 1,000 cubic meters, according to data reportedly collated by China’s General Administration of Customs. That was apparently $100 less than Beijing was paying last year.
The cheapest gas of all, however, is coming from Turkmenistan, which reportedly sells its exports to China at a giveaway rate of $185 per 1,000 cubic meters. Turkmenistan sold China 23 billion cubic meters of gas over the reported period, accounting for 13 percent of what Beijing imported.
Australia was a far second to Turkmenistan as a gas supplier — 11.6 billion cubic meters shipped to China in liquified form at $220 per 1,000 cubic meters.
The takeaway here is that Turkmenistan is being badly pinched on its only serious export commodity.
And as the Chronicles of Turkmenistan points out, Ashgabat’s sale of gas to China is serving primarily to service multibillion loans issued by Beijing.
This might explain Turkmenistan routine but lackluster attempts to restore diversity among its buyers.
In the long-term there is the trans-Afghan TAPI pipeline — the prospects of which are subject of much skeptical analysis.
The president of Turkmenistan is due visit Moscow on November 1 for talks with Russian President Vladimir Putin against the backdrop of a worsening domestic economic crisis.
Turkmenistan’s Foreign Ministry announced the trip in an uninformative one-line statement, so there is no immediate insight into what the focus of the encounter will be. The Kremlin’s own statement on the meeting was not much more helpful.
“Key areas in bilateral cooperation will be the main subject of discussion at the talks. The two presidents are also expected to exchange views on current regional issues,” the Kremlin said.
That cryptic statement suggests there is every chance that Turkmen leader Gurbanguly Berdymukhamedov will be seeking to whet Russia’s appetite for resuming its purchases of Turkmen gas.
The countries have over the years signed more than 100 bilateral agreements covering a range of areas of cooperation. A key document was the April 23, 2002, Friendship and Cooperation Treaty.
Russian business are actively involved on the Turkmen market in sectors such as auto and industrial machinery, telecommunications, and in the oil and gas business. Around 190 companies working with Russian capital operate in Turkmenistan. In 2009, Russia’s ATERI, previously operating under the ITERA brand, signed a production sharing agreement with Turkmenistan over an offshore sector of the Caspian Sea.
But nothing ever quite superseded direct gas sales for importance.
Russia bought 45 billion cubic meters of gas from Turkmenistan in 2008, but that has through a series of commercial and diplomatic vicissitudes dwindled to nothing. Russian gas behemoth Gazprom definitively ceased its gas supply agreement earlier this year.