Economy

Turkmenistan is largely desert country with nomadic cattle raising, intensive agriculture in irrigated oases, and huge gas and oil resources. One-half of its irrigated land is planted in cotton, placing the country in the top 10-15 producers. It also possesses the world's fifth largest reserves of natural gas and substantial oil resources. Until the end of 1993, Turkmenistan had experienced less economic disruption than other former Soviet states because its economy received a boost from higher prices for oil and gas and a sharp increase in hard currency earnings.

Half of the country's irrigated land is planted with cotton, making the country the world's tenth-largest producer of it. It possesses the world's fifth-largest reserves of natural gas and substantial oil resources. In 1994, the Russian government's refusal to export Turkmen gas to hard currency markets and mounting debts of its major customers in the former Soviet Union for gas deliveries contributed to a sharp fall in industrial production and caused the budget to shift from a surplus to a slight deficit.

Turkmenistan has taken a cautious approach to economic reform, hoping to use gas and cotton sales to sustain its economy. Privatisation goals remain limited. Between 1998 and 2002, Turkmenistan suffered from the continued lack of adequate export routes for natural gas and from obligations on extensive short-term external debt. At the same time, however, the value of total exports has risen sharply because of increases in international oil and gas prices. Economic prospects in the near future are discouraging because of widespread internal poverty and the burden of foreign debt.

President Niyazov spent much of the country's revenue on extensively renovating cities, Ashgabat in particular. Corruption watchdogs voiced particular concern over the management of Turkmenistan's currency reserves, most of which are held in off-budget funds such as the Foreign Exchange Reserve Fund in the Deutsche Bank in Frankfurt, according to a report released in April 2006 by London-based non-governmental organisation Global Witness. According to the decree of the Peoples' Council of 14 August 2003, electricity, natural gas, water and iodised salt will be provided free of charge to citizens up to 2030; however, shortages are frequent. On September 5, 2006, after Turkmenistan threatened to cut off supplies, Russia agreed to raise the price it pays for Turkmen natural gas from $65 to $100 per 1,000 cubic metres. Two-thirds of Turkmen gas goes through the Russian state-owned Gazprom.

Facts and Figures

• GDP:
  • Purchasing power parity: $42.84 billion
  • Official exchange rate: $15.18 billion
  • Real growth rate: IMF estimate: 6%
    note: official government statistics show 21.4% growth, but these estimates are widely regarded as unreliable
  • Per capita (PPP): $8,500
  • Composition by sector:
    • Agriculture: 24.4%
    • Industry: 33.9%
    • Services: 41.7%
• Labour force:
  • Total: 2.32 million
  • By occupation:
    • Agriculture: 48.2%
    • Industry: 13.8%
    • Services: 37%
• Unemployment rate: 60%
• Population below poverty line: 58%
• Household income or consumption by percentage share:
  • Lowest 10%: 2.6%
  • Highest 10%: 31.7%
• Inflation rate (consumer prices): 11%
• Investment (gross fixed): 28.8% of GDP
• Budget:
  • Revenues: $1.803 billion
  • Expenditures: $2.063 billion
• Agriculture Products:
  • Cotton
  • Grain
  • Livestock
• Industries:
  • Natural gas
  • Oil
  • Petroleum products
  • Textiles
  • Food processing
• Industrial production growth rate: 22%
• Electricity:
  • Production: 10.79 billion kWh
  • Consumption: 9.03 billion kWh
  • Exports: 1 billion kWh
  • Imports: 0 kWh
• Oil:
  • Production: 213,700 bbl/day
  • Consumption: 95,000 bbl/day
  • Exports: 170,000 bbl/day
  • Proved reserves: 546 million bbl
• Natural gas:
  • Production: 58.57 billion cu m
  • Consumption: 16.57 billion cu m
  • Exports: 42 billion cu m
  • Imports: 0 cu m
  • Proved reserves: 2.01 trillion cu m
• Current account balance: $321.2 million
• Exports:
  • Total: $5.421 billion f.o.b.
  • Commodities:
    • Gas
    • Crude Oil
    • Petrochemicals
    • Cotton fibre
    • Textiles
  • Partners:
    • Ukraine 42.8%
    • Iran 14.8%
    • Hungary 5.3%
• Imports:
  • Total: $3.936 billion f.o.b.
  • Commodities:
    • Machinery and equipment
    • Chemicals
    • Foodstuffs
  • Partners:
    • UAE 12.7%
    • Azerbaijan 11.1%
    • US 9.6%
    • Russia 9.1%
    • Ukraine 7.6%
    • Turkey 7.3%
    • Iran 6.2%
    • Germany 5.4%
• Reserves of foreign exchange and gold: $3.518 billion
• Debt - external: $2.4 billion to $5 billion
• Economic aid - recipient: $16 million from the US
• Currency (code): Turkmen manat (TMM)