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Turkmenistan is open for business

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Western observers are mistaken in their tendency to overlook Turkmenistan, a resource-rich, strategically consequential country that borders such key regional players as Afghanistan, Iran, Kazakhstan and Uzbekistan and has a long coastline on the Caspian Sea.  The country serves as one of the most important east-west and north-south transport and logistics hubs in Eurasia. 

Oddly, neither Turkmenistan’s strategic position on the map nor its possession of the world’s second-largest proven gas reserves – the Galkynysh Gas Field – nor its goodwill toward the North Atlantic Treaty Organization in supporting allied logistics during the Afghan war (including overflight of Turkmen airspace) seem to have gotten the attention of the Western officials, financiers and think-tank denizens who are normally ubiquitous in the post-Soviet space.  

Nevertheless, President Serdar Berdimuhamedov, who took office in March, has been persistent in inviting foreign investors, diplomats and non-governmental organizations to Turkmenistan. 

They should go there and see what’s up. They might learn something.

Turkmenistan aims to open its economy by increasing transparency, strengthening its legal system, and encouraging private-sector capital formation. All of this takes time, but the government seems determined. 

If it really wants to, and if it gets its proverbial ducks in a row, there is no reason Turkmenistan can’t replicate the success of other countries in Eurasia.  

Beware of consultants

As this process unfolds, Turkmenistan will be wary of planeloads of exotic foreign consultants descending on Ashgabat promising prosperity if the Turkmens just sign over to them control over policy and all viable assets. 

If Western movers and shakers decide to take Berdimuhamedov up on his invite, they should have no illusions. Central Asians have seen the neoliberal game unfold and are hip to its depredations. 

The Turkmens have less direct experience with it than their neighbors because of their isolation, but they talk among one another and compare notes. Don’t expect them to roll over and play dead for just any junketeering consultant brandishing a wad of cash. That sort of thing won’t wash.

Turkmens know about predatory capitalism, plunder, and empty promises, but are not averse to reasonable proposals based on common sense and free-market incentives. They understand that these can contribute to the common good and national interest.   

As the government itself says, it seeks the “development of constructive mutually beneficial cooperation with all international partners on the basis of equality and mutual respect.” 

This could be little more than a pious platitude, but the only way to find out is to engage.  

Sovereignty and neutrality first

President Berdimuhamedov will not give away Turkmenistan’s sovereignty and independence for equity investments, oodles of easy, unpayable loans (à la Sri Lanka or Pakistan) or the privilege of making whoopie with assorted Wolves of Wall Street, Canary Wharf, or Lujiazui. 

Turkmenistan will not give up its autonomy or its status as a permanently neutral state pursuant to its constitution and as formally recognized by a unanimous resolution of the United Nations General Assembly. The president is clear on this matter. 

The Turkmen Ministry of Foreign Affairs declares these as its main foreign-policy priorities:

The preservation and strengthening of the state sovereignty of Turkmenistan and increasing its role in the international system.The creation of favorable foreign political conditions for the internal development of the state.Upholding and implementing the national interests of Turkmenistan by all means existing in international diplomacy.Ensuring security of Turkmenistan by political and diplomatic means.Ensuring full compliance of Turkmenistan’s foreign policy actions with international law and the UN Charter.

In other words, Turkmenistan is open for business but is unlikely to tolerate hegemonic interference from any quarter (diplomatic, military, or corporate). Interlopers, intruders and trespassers will be consigned to the outer darkness, or tossed – figuratively, one hopes – into Garagum ýalkymy, the “Gates of Hell,” a burning natural-gas field that collapsed into a crater in the Turkmen desert.

Turkmenistan’s approach to engagement – deal with us respectfully or take a hike – applies as much to Beijing, Brussels and New Delhi as it does to London, Washington and Moscow. 

State of the Union address

President Berdimuhamedov’s State of the Union address to the State Council (Döwlet Maslahaty) in Ashgabat on September 23 helps explain some of Turkmenistan’s development priorities:  

Develop Turkmenistan’s natural-gas sector and diversify exports across global markets, including through the unfinished Turkmenistan-Afghanistan-Pakistan-India gas pipeline. Increase the competitiveness and export potential of domestic industries and businesses.Develop, together with foreign partners, gas fields in the Turkmen sector of the Caspian Sea as well as solar and wind energy.Accelerate the process of Eurasian integration and rebuild the “Great Silk Road” by developing transport-transit corridors such as the Middle Corridor (Turkmenistan-Azerbaijan-Georgia-Turkey), the Middle East Corridor (Uzbekistan-Turkmenistan-Iran-Oman-Qatar) and (Transport Corridor Europe Caucasus Asia (the European Union and 12 countries of Eastern Europe, the Caucasus, and Central Asia).

Significantly, as The Orient recently reported, the Asian Development Bank is supporting Turkmenistan in preparing a feasibility study for the 1,147-kilometer Turkmenabat-Mary-Ashgabat-Turkmenbashi railway line. 

Ashgabat’s outreach

At the Shanghai Cooperation Organization (SCO) meetings in Samarkand, Uzbekistan, on September 16, Berdimuhamedov reiterated Turkmenistan’s readiness to work with partners “to establish long-term sustainable ties in transport, logistics, communications, energy and trade which lead to economic integration through the development of north-south, east-west corridors and linkages.” 

Turkmenistan’s increasing openness toward the international community was also confirmed by the Turkmen delegation’s remarks at the United Nations General Assembly on September 26: “Our sustainable development depends on enhanced international cooperation in such critical areas as transport and energy.” 

These statements are part of Ashgabat’s ongoing effort to convince the international business community that Turkmenistan is a positive destination for long-term investment.

That is why Berdimuhamedov met with the US-Turkmenistan Business Council in May. Diversifying his outreach, he also proposed the creation of a “Turkmen-SCO” Business Council, among other initiatives, during the SCO meetings in Uzbekistan.  

Efforts to contain corruption 

Significantly, Berdimuhamedov has ordered the government to fight systemic corruption and has reacted positively to the business community’s open letter to reduce the detrimental effects of corruption on trade and investment. 

Anti-corruption drives in the former Soviet republics have not been notably successful, but the effort must be made if the government wants to achieve its foreign investment goals.   

Don’t ignore Turkmenistan

President Berdimuhamedov has been forthright about the need to boost diplomatic engagement and put in place the fundamentals for long-term socio-economic development in Turkmenistan. 

Turkmenistan is pursuing comprehensive modernization that seeks reform across all sectors (financial, regulatory, agricultural, transport and energy). Despite the country’s relative isolation in recent years, investors and diplomats should not squander the present opportunity to engage the country’s leadership and nascent business community. 

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