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28.10.03á11:48

FOOLOWING ITS OWN PATH OF DEVELOPMENT
TURKMENISTAN USES ITS OWN POTENTIAL TO BOOST ECONOMY

Turkmenistan astounds a first-time visitor not only by clean streets, European services in hotels, great number of portraits of its leader and the absence of opposition press. Many people are surprised at how a former USSR's raw material appendix could manage to build an efficient economy and become an exporter of new products to world markets in 12 years of independence, considering the fact that Turkmenistan was the only CIS state that could do without help from the IMF preferring instead to rely on its own resources and not to push hard for the WTO membership.

Some people would say: it was easy for Turkmen to refuse the IMF loans, because, as they say, in Turkmenistan "wherever you jab a stick, you will find an oil well". But, firstly, the fuel reserves do not provide a state budget with money immediately and one needs to extract and transport those oil and gas reserves to consumers. And, secondly, one does not need to go far for examples of how big oil powers are being manipulated by international financial institutions. May be, it was easy for Turkmen because they had a chance to learn from bitter experience of others?

Whatever the truth, the fact is that Saparmurat Niyazov borrowed no single dollar for Turkmenistan from the IMF. Here we have one of the Turkmen paradoxes: the IMF office has been working for over ten years in Turkmenistan and regularly gives its recommendations, which the Turkmen government scrutinizes and then...simply leaves for possible application. At the same time, if we look into reports of the Ashgabat office of the IMF they consist 80% of rather high estimations of economic reforms taking place in Turkmenistan. The year 2000 was of specific significance in this regard, when this Central Asian republic had unexpectedly become a leader in GDP growth (17,6%).

"How can you dictate us a vector and speed of reforms? Turkmenbashi asked, when the IMF offered him its partnership. Do you think you know better than we our economy, capabilities and peculiarities"? Much water have run away in the Amudarya and Karakum rivers since that time, but the Turkmen leader has not changed his attitude towards "advice of foreigners": take note of it, but do it your way. This was the case when the European Bank for Reconstruction and Development (EBRD) offered Ashgabat a soft loan worth $50 mln for the construction of part of the road to Mari city. In return, the Turkmen government was required to make "a minor concession". It was suggested that Ashgabat should make a commitment to liberalize or increase by half gasoline prices that according to European standards look unreal (50 liters of high octane gasoline for $1). A response of the head of state was like this: "Thank you for your offer, but the gasoline price will rise to European standards when our people are paid European wages. As for the road, we will build it ourselves".

This dialog with western bankers took place five years ago. The trick was that right after Ashgabat's refusal to take that loan the EBRD made a statement ... on the lack of democracy in Turkmenistan. As saying goes, no comment.

Generally speaking, one can judge on ... the state of Ashgabat's relations with the capitals of major world's powers at any given moment by a periodical gash of criticism in international press in Turkmenistan's address about democracy and human rights. If it comes from the West it means that Turkmenistan made a stride in relations with Moscow.

Meanwhile, the head of state regularly points out that the neutral Turkmenistan will never join this or that political center or block; that Ashgabat has one chief principle in its economic partnership, which are mutual benefit and no political preferences. Saparmurat Niyazov usually cites as example the reconstruction of the complex of oil refineries in Turkmenbashi (former Krasnovodsk) city. German, French, Japan, Turkish, Israeli and Iranian companies participated in the first stage of reconstruction works totaling over $1,5 bln. What kind of political preferences can we talk about? And the absence of the US and Russia in this list means that companies of other countries offered the Turkmen government better terms. At the same time, the Americans have no competitors in supplying powerful agricultural machines and "Boeing" airplanes, and the Russians, represented by "Gasprom, became the largest partner of Turkmenistan this year in implementation of its plans for development of energy sector.

The national institute of statistics and information of Turkmenistan cited quite telling figures the other day. According to its data the government has contracts with foreign companies already in the process of implementation on construction of 179 objects in the total amount of $4 bln. Today Turkmenistan has contracts with 69 foreign companies and 3 joint ventures from 30 countries on construction and assembly works. 31 objects have been commissioned in January-August of this year, and dozen of other construction works will be completed right on the eve of Independence Day celebrated on October 27-28. There will be commissioned several textile factories, paper plant, and new energy grid at the Buzmein hydroelectric station, horse-riding complex, 20 multistorey highly comfortable houses in Ashgabat and tens of other big and small objects.

The social orientation of reforms in Turkmenistan has been confirmed not only by relevant budget spending, up to 70% of funds have been allocated for "social" sphere, but also by such unique support measures for poor group of the population as free electricity, gas, drinking water and almost 100% subsidization of accommodations rental and transport tariffs. By the way, when Niyazov proposed free electricity and gas for population he fell under heavy pressure from international financial institutions. "This is not a market measure", experts used to tell him and warned that "everything for free" approach can negatively affect citizens and foster their dependent instincts. And the Turkmen President again did not listen to advice of foreign experts. This peculiar "Turkmen voucher" has been functioning for almost 11 years: citizens receive literally every hour their share of the national wealth through gas, water and electricity. Let it be little share, but it is real and tangible help for family budget.

The state's leadership promised that citizens would get actively involved in the process of privatization of different branches of the economy every year and their wealth would be directly linked to the results of work of a particular enterprise, whereas the leading budget contributing spheres, namely oil and gas sector, will remain under state control. This is to guarantee social security of citizens and their future life. Therefore, there will be no oligarchs in the foreseeable future in Turkmenistan. Yet, it will hardly disappoint ordinary citizens of the state.

Ilya VERBIN, journalist

Ashgabat - Moscow

The newspaper "Tribuna", 25.10.03

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