Country Profile

COUNTRY REPORT

Area               : 488,100 km
Population   : Officially 6.9 million, unofficially 5.1 million (UN estimate,2008)
Capital City: Ashgabat (population unofficially estimated at approx.500,000)
People          : 77% Turkmen, 9% Uzbeks, 7% Russians, 2% Kazakhs
Languages: Russian and Turkmen
Religion(s): Sunni Muslim
Currency: Manat
Major political parties: Democratic Party of Turkmenistan
Head of State: Gurbanguly Berdimuhamedov 
Prime Minister/Premier: Gurbanguly Berdimuhamedov 
Foreign Minister: Rashid Meredov
Membership of international groupings/organisations:Turkmenistan is a member of the OSCE, the UN, the IMF, OIC and EBRD, and enjoys “associate membership” status in the CIS. It initialed a Partnership and Co-operation Agreement (PCA) with the EU in May 1998.  The PCA is not yet in force.

Basic Economic Facts (for 2009 unless otherwise indicated)

GDP: US$ 30.09bn (IMF)
GDP per head: US$ 5,983 (estimate 2009 IMF)
Annual GDP Growth: 7.5% (IMF estimate 2009)
Inflation: 16% (EBRD estimate 2009)
Major Industries: Oil, gas, petrochemicals, agriculture and food processing.
Major trading partners: Russia, Iran, China, Turkey, Ukraine, US, France, Germany, UAE, Azerbaijan
Foreign direct investment: US$ 1355m (projected)(EBRD 2009)
Exchange rate: 2.85 manat = US$1; Since 1 January 2009 The Turkmen Manat has been re-denominated and new bank notes have been issued.

The energy sector is the mainstay of the Turkmen economy and the source of the financing of the vast construction projects taking place in the country. Turkmenistan has significant long-term energy potential, with the world’s fourth largest reserves of natural gas and substantial oil deposits.  Gaffney, Cline & Associates, a British Company, carried out an audit of the reserves in June 2008 and confirmed the large deposits. Historically,  most of its gas exports have gone to countries in the former Soviet Union like Russia and Ukraine which paid well below world market prices.  However, in April 2009 there was a rift in Russian-Turkmen relations after an explosion on the main gas supply line to Russian which stopped the flow of gas for the remainder of 2009. The pipeline reopened in January 2010 but at much reduced volumes. 

Keen to lessen dependence on Russia, Turkmenistan had opened a small capacity gas pipeline to Iran in 1997 and increased this with a second pipeline, opened in January 2010, which could increase exports up to 20bcm annually.  In December 2009, a new gas pipeline to China was commissioned, which could eventually carry as much as 30-40 billion cubic meters (bcm) of natural gas per annum.  Preparations with a US-led consortium to build a trans-Caspian gas pipeline to join up with a pipeline to carry gas to Europe to further diversify Turkmen export routes halted in 2000.  However, this is now back on the agenda.  An additional factor supporting this is the EU-led Nabucco pipeline project, which was signed in Turkey in July 2009.  While Turkmenistan did not take part in this, the Turkmen Government has said that it is in principle prepared to contribute to the Nabucco pipeline by delivering up to 10 bcm per annum.  

There has been some economic reform in recent years and International Monetary Fund teams visit Turkmenistan regularly.  There has been some privatisation and a new European Bank for Reconstruction and Development strategy is encouraging more small and medium enterprise (SME) start-ups in the private sector.  However, most economic control remains with the state.  The agricultural sector is dominated by cotton production. The Government has established a domestic textiles industry and is processing much more of its cotton domestically.

There are two large oil refineries in Turkmenistan with a total design capacity of around 10-12 million tons of oil annually.