Present-day Turkmenistan covers territory that has been at the crossroads of civilizations for centuries. The area was ruled in antiquity by various Persian empires, and was conquered by Alexander the Great, Muslim armies, the Mongols, Turkic warriors, and eventually the Russians. In medieval times, Merv (located in present-day Mary province) was one of the great cities of the Islamic world and an important stop on the Silk Road. Annexed by Russia in the late 1800s, Turkmenistan later figured prominently in the anti-Bolshevik movement in Central Asia. In 1924, Turkmenistan became a Soviet republic; it achieved independence upon the dissolution of the USSR in 1991. Extensive hydrocarbon/natural gas reserves, which have yet to be fully exploited, have begun to transform the country. The Government of Turkmenistan is moving to expand its extraction and delivery projects and has attempted to diversify its gas export routes beyond Russia's pipeline network. In 2010, new gas export pipelines that carry Turkmen gas to China and to northern Iran began operating, effectively ending the Russian monopoly on Turkmen gas exports. In 2016, Russia and Iran halted their purchase of gas from Turkmenistan making China the only buyer of Turkmen gas. President for Life Saparmurat NYYAZOW died in December 2006, and Turkmenistan held its first multi-candidate presidential election in February 2007. Gurbanguly BERDIMUHAMEDOW, a deputy cabinet chairman under NYYAZOW, emerged as the country's new president. He was reelected in 2012 and again in 2017 with over 97% of the vote in both instances, in elections widely regarded as undemocratic.
Central Asia, bordering the Caspian Sea, between Iran and Kazakhstan
petroleum, natural gas, sulfur, salt
Population - distribution
the most densely populated areas are the southern, eastern, and northeastern oases; approximately 50% of the population lives in and around the capital of Ashgabat
Turkmen (official) 72%, Russian 12%, Uzbek 9%, other 7%
ASHGABAT (capital) 746,000 (2015)
- Conventional long form
- Conventional short form
- Local long form
- Local short form
presidential republic; authoritarian
- Geographic coordinates
- 37 57 N, 58 23 E
- Time difference
- UTC+5 (10 hours ahead of Washington, DC, during Standard Time)
has not submitted an ICJ jurisdiction declaration; non-party state to the ICCt
Turkmenistan is largely a desert country with intensive agriculture in irrigated oases and significant natural gas and oil resources. The two largest crops are cotton, most of which is produced for export, and wheat, which is domestically consumed. Although agriculture accounts for roughly 9% of GDP, it continues to employ nearly half of the country's workforce. Hydrocarbon exports (mainly natural gas) make up 25% of Turkmenistan’s GDP, the bulk of which is natural gas going to China. Ashgabat has explored two initiatives to bring gas to new markets: a trans-Caspian pipeline that would carry gas to Europe and the Turkmenistan-Afghanistan-Pakistan-India gas pipeline. Both face major financing and security hurdles and are unlikely to be completed soon.
- External debt stocks
- US$ 402,877,000
- Total tax rate (% of commercial profits)
- Real Interest Rate
- Manufacturing, value added (% of GDP)
- Current Account Balance
- US$ -580,180,000
- Labor Force, Total
- Employment in Agriculture
- Employment in Industry
- Employment in Services
- Unemployment Rate
- Imports of goods and services
- US$ 15,610,514,807
- Exports of goods and services
- US$ 25,760,632,140
- Total Merchandise Trade
- FDI, net inflows
- US$ 4,258,767,000
- Commercial Service Exports
- US$ 268,640,000
cotton, grain, melons; livestock
natural gas, oil, petroleum products, textiles, food processing
- gas, crude oil, petrochemicals, textiles, cotton fiber
- China 68.7%, Turkey 4.9% (2015)
- machinery and equipment, chemicals, foodstuffs
- Turkey 25.1%, Russia 12.3%, China 11%, UAE 9.1%, Kazakhstan 5.2%, Germany 4.6%, Iran 4.5% (2015)
- Country Risk Rating
- A high-risk political and economic situation and an often very difficult business environment can have a very significant impact on corporate payment behavior. Corporate default probability is very high.
- Business Climate Rating
- The business environment is very difficult. Corporate financial information is rarely available and when available usually unreliable. The legal system makes debt collection very unpredictable. The institutional framework has very serious weaknesses. Intercompany transactions can thus be very difficult to manage in the highly risky environments rated D.
- Fourth largest natural gas reserves in the world
- Substantial foreign exchange reserves
- Low debt levels
- Small, isolated economy
- Economy highly dependent on the hydrocarbon sector (chiefly gas) and on China, which accounts for almost all its export market
- State interventionism and governance shortcomings
In 2017, Turkmenistan is expected to continue to be affected by the effects of low hydrocarbon prices and the economic slowdown in China (its main export market). Public investment is likely to be revised downwards. Some projects in the hydrocarbon sector, especially those linked with transporting gas (TAPI pipeline - Turkmenistan-Afghanistan-Pakistan-India) are expected to remain a priority, sustaining activity, especially in the construction sector. In contrast, cuts in investment spending are likely to affect the non-hydrocarbon sectors, slowing the diversification of the economy. The downturn in household consumption should be avoided, thanks to a fiscal policy in support of domestic demand.
Prices are expected to continue on an upward trend in 2017 because of higher energy prices. Inflation will be higher if there is another devaluation of the Turkmen manat, as this would push up the price of imported goods, especially food products.
The decline in fiscal revenues, chiefly generated by the hydrocarbon (80% of consolidated budget income) has led to a reduction in government spending, especially on investment. The 10% increase in wages, pensions and study bursaries, announced in July 2016 for implementation in 2017, will be offset by a cut in subsidies on fuel and electricity. Controlling expenditure remains an objective of the government, who is not, however, able to make drastic cuts in current spending because of the potential impact this would have on social stability. A slight recovery in hydrocarbon prices on the world market is expected to help prevent the public finances from deteriorating too strongly in 2017, without however enabling a significant surplus to be achieved. The assets in the Stabilization Fund, the amount of which has not, however, been communicated by the authorities, should give the country some leeway, at least in the short term, especially as the public debt is still low.
Export income stems chiefly from hydrocarbon sales (95%of the total), so the combined fall in prices and drop in world demand has a strong impact on the current account balance. After Russia's decision, in early 2016, to suspend its imports of gas from Turkmenistan, China is now the country's key client and accounts for almost three quarters of its gas exports. The Chinese slowdown is, therefore, expected to continue to weigh on exports from Turkmenistan in 2017. A less acute need for imports, given the postponement of some investment projects and less robust consumption, should help prevent further deterioration in the current account balance. Net FDI flows are expected to continue in the energy sector, notable from Asian countries, although they are likely to remain weak in the non-hydrocarbon sector.
Following the devaluation of the manat in January 2015 (-19% against the dollar, to which the Turkmen currency is pegged), downward pressure on the exchange rate persists. Further devaluation cannot be ruled out, especially if oil and gas prices continue to decline.
The security situation on the border with Afghanistan is very precarious due to the presence of extremist Islamist groups. President Gurbanguly Berdymukhamedov was re-elected in February 2012 with 97% of the votes cast. The multi-party system introduced in January 2012 did not weaken his party's (Democratic Party) grip on power in the parliamentary elections in late 2013. Mr Berdymukhamedov is expected to stand again and hold on to the presidency at the next presidential elections in February 2017. In September 2016, he succeeded in passing a constitutional amendment allowing him to remain as head of state without an age limit (previously fixed at 70 years) and to extend the presidential term from 5 to 7 years.
Cuts in subsidies and the level of inflation could exacerbate popular discontent, but a very tight security policy limits the risk of mass protests.
Turkmenistan is one of the worst ranked countries in the CIS according to the World Bank's governance indicators. The country is in 192nd place (out of 204) on the Corruption Perceptions Index and 197th regarding the rule of law. The business climate remains very difficult for foreign businesses.