Eurasianet: Turkmenistan. Down in the dumps

Economic maladministration is becoming harder to hide.

State statisticians in Turkmenistan may not be reliable or transparent, but they are consistent.

At a cabinet meeting devoted to the economy on April 9, Deputy Prime Minister Gadyrgeldy Mushshikov announced that the country’s gross domestic product, or GDP, had expanded by 5.9 percent in January-March, as compared to the same period in 2020.

Turkmenistan appears fixated with this figure at the moment. In February, President Gurbanguly Berdymukhamedov informed his government that the economy had grown by that exact same amount last year.

The International Monetary Fund produced a different number in its World Economic Outlook, which was published last week. Its estimate of 0.8 percent growth stands in stark contrast with Ashgabat’s claims. Meanwhile, the page on the IMF website carrying International Financial Statistics data, which almost always relays the official government figures of partner states, still has no GDP data from Turkmenistan for 2020.

The dissonance coming out of Ashgabat is deafening. Mushshikov hailed his own government’s achievements, pointing to how the manufacturing sector had purportedly grown by 3.2 percent in the first quarter. But that was nothing as compared to what happened in retail trade, which expanded by 17.7 percent.

As usual, it is Berdymukhamedov who is left with the curious task of bursting his own hype. He noted with frustration, for instance, that the country’s oil refineries have for a long time been operating at only 40 percent capacity.

“Hydrocarbon production is not growing, and half of the crude oil is being exported,” he said.

The energy sector is not attracting enough investment, he said. Berdymukhamedov singled out untapped oil and gas reserves in the Caspian as a particular area of concern.

Economic maladministration is leading to more grievous outcomes down where the real people live. Amsterdam-based carried a report on April 10 on how the sight of people rummaging through dumpsters is becoming ever more common across the country.

“Some are looking for vegetable peelings to feed the cattle,” one resident of the Mary province told the website. “Others are looking for bottles, to redeem them and make a bit of money. Often it is children doing this. They are forced to work like their parents to contribute to the family budget.”

RFE/RL’s Turkmen service, Radio Azatlyk, has reported on how authorities in the Mary province are trying to crack down on city dump scavengers by taking their photographs, collecting personal information and requiring those same people to sign a receipt confirming that they have received an “explanatory work” dressing-down session. Another, more creative if depressing, proposed solution has been that the scavengers be given the uniforms of garbage men, so at least they don’t look out of place. has reported on how many are no longer keeping as much poultry on their farmsteads as before, because the cost of animal feed has been rising so steeply.

The arrival of the holy month of Ramadan has hardly helped. As Vienna-based Chronicles of Turkmenistan reported on April 7, the beckoning of that season, which is traditionally prefaced by celebratory meals and gatherings, precipitated a rush on beef and even camel meat, causing prices for both to spike.

Even more basic staples are experiencing trouble. Chronicles reported on April 11 that city authorities in Ashgabat have demanded that privately owned bakeries cease production so as to help alleviate the shortage of flour in state stores. The suspicion is that those private stores are buying up subsidized flour and then slapping on a mark-up. Shoppers in the city of Dashoguz, meanwhile, say state stores there are dealing with the deficit in other ways: a standard loaf, which should weigh around 450-470 grams, now comes in at 100 grams lighter.

The national currency, the manat, never known for its stability, is enduring some wild times on the black market. RFE/RL’s Bruce Pannier relayed information from his colleagues on the Turkmen desk about how the exchange rate for the dollar fell to 40 at one stage in early April. The currency was trading somewhere in the high 30s in March. The official – but utterly bogus – rate is 3.5 manat to the dollar.

RFE/RL has attributed the rapid slide in part to the fall in remittances sent to Turkmenistan by laborers in Turkey. Another factor is the reported recent reopening of the border with Iran. As wholesalers try desperately to buy up hard currency with which to pay for imported goods, it plays havoc with the exchange rate.

Banks are a gilded nonsense for traders. It makes little sense to engage in inward foreign trade by means of bank transactions since the manat goes only one-tenth of the way at official rates.

That did not deter Berdymukhamedov this week from inaugurating shiny white, 15-story administrative offices built by French construction company Bouygues for two local lenders –Turkmenbashi and Senagat. The former is state-owned, while the latter is ostensibly a joint-stock, private-public entity, although such distinctions are meaningless in Turkmenistan.

This clunky top-down construction of the banking sector is of a whole with the stated agenda of transitioning to market rules. One of Turkmenbashi Bank’s stated priorities is to provide lines of credit to heretofore state-bankrolled enterprises in charge of the oil and gas, transportation, communications and construction industries.

The authorities have been returning over and again to the notion that citizens and large enterprises alike need to pay their own way. Nothing like a debt to concentrate the mind.

On the personnel front, the creeping expansion of influence wielded by Berdymukhamedov’s son and presumed successor, Serdar, continues apace. Serdar Berdymukhamedov was handed a whole raft of top jobs earlier this year, including one as deputy prime minister.

Berdymukhamedov senior is apparently concerned that Foreign Minister Rashid Meredov might have too much on his plate heading up 10 intergovernmental commissions. For that reason, he ordered on April 9 that his son be appointed co-chair of the Turkmen-Russian and Turkmen-Japanese intergovernmental commissions, and that Meredov be relieved of those same positions.

Akhal-Teke is a weekly Eurasianet column compiling news and analysis from Turkmenistan