LONDON (TCA) — Many tend to agree that the story of Kyrgyzstan in post-Soviet times is the most interesting, that of Tajikistan the most hopeless and that of Turkmenistan, “the world’s last aristocracy”, the most boring. What they have in common is historic evidence that the availability of local resources does not generate overall domestic prosperity, and that elite, clan and corruption all have their own agenda.
In the early years of Soviet Russia, writer Konstantin Paustovsky gave a not very flattering account of the Turkmens in his classic The Bay of Kara-Bogaz: superstitious, illiterate, overall backward. As though to cultivate that image, the Turkmens kept their homeland perfectly immune to all innovation while most of the rest of the USSR was sizzling with glasnost and perestroika.
The first President
Leader-for-life “Turkmenbashi” Saparmurat Niyazov, originally a Soviet career maker who was already in charge of Turkmenistan at the time, simply replaced the old Soviet icons by his own when the time had come. In 1990 he proudly proclaimed Turkmenistan’s “sovereignty” due to “exploitation” by the Kremlin, organizing a referendum to formalise Turkmenistan’s independence – not taking no for an answer and in this way becoming the first President. From there on, he displayed his hyper-ego in the form of massive construction of monumental reminders of it, along with ruthless repression of the slightest dissent.
The new President
After Niyazov’s “sudden” death in late 2006, “transition” took place in the same seamless manner it had been prepared fifteen years earlier. Shortly before he died, he had chosen his Deputy Prime Minister Gurbanguly Berdymukhammedov (who also happened to be his dentist) as interim successor, who was subsequently elected the following February and again in 2012 — gaining 97 per cent of the votes in the first round. Initially the new man in charge gave the impression of doing away with the personality cult and come back to business. Such hopes, however, have still to be fulfilled.
A specific balance of power
Turkmenistan remains a tribal community with a specific balance of power which is not to be found in the public domain but in the shadow domain, held by faceless people. This results in a “clientist” system, where citizens depend on aristocrats to defend their personal interests – constrained by severe limits.
In 1999, a Parliament consisting of handpicked members was put in place. But its role remained, and still remains, limited. The real power behind the throne is believed to be in the hands of a so-called People’s Council, sided by a Council of Elders. Both are composed of tribal leaders and their representatives and their power goes to the extent that in 2005, when Niyazov suggested his retirement probably feeling his health decline, he got publicly reprimanded by the Councils telling him that he was in no way entitled to retire unless he was told to do so.
Who says economics, says gas
In Turkmenistan, who says economics, says gas – even though cotton represents a secondary but still important place in terms of earnings. The exploitation of Turkmenistan’s natural gas reserves, the fifth-largest in the world, is completely controlled by the state. Until 2014, when gas prices plummeted as did oil prices but more gradually, all had gone well thanks to purchases by Russia’s giant Gazprom.
With public services such as water, energy and even basic food supplies 100 per cent subsidized, apartments available under a state distribution regime, and private enterprise restricted to petty trade, the Turkmen system knows virtually no political weak spots. Therefore, the weak spot that could plunge Turkmenistan into chaos consists of national economics.
In January this year, Russia stopped all gas purchases from Turkmenistan, maintaining a claim over the loss of income suffered earlier. All offers to compromise on sales prices were haughtily declined by Ashgabat, but as month after month Turkmenistan is missing two-thirds of its income on gas exports, meaning one-third of its national income, it is starting to feel the pain. In the first half of the year, its on-year gross domestic product increase dropped to 6.1 per cent from 9.1 per cent a year earlier, and is expected to be down to 5 per cent for the full year.
Remaining exports take place through a pipeline running from western Kazakhstan into China and through a Soviet-built pipeline into Iran. China’s intake of Turkmen gas stands now at 30 billion cubic metre per annum, despite a supply contract amounting to 65 billion. The Kazakh pipeline has a capacity of 55 billion cubic metre per year, and the construction of a shortcut crossing Uzbekistan and Kyrgyzstan with a branch across Tajikistan has yet to start – as does another pipeline straight to war-torn Afghanistan to Pakistan. And the Turkmens simply lack enough money in their coffers to build them.
Lack of financial backup
Now here is the core of the problem. Turkmenistan, like most other post-Soviet states, has failed to build up financial back-ups other than a state fund for rainy days, but not enough working capital to keep its own economy going and growing. While primary provisions for the population have kept “revolutions” away, an undercapitalized national economy makes the country almost fully dependent on cash invested from abroad, the availability of which is limited. Even China, about the only country in the world awash with cash, imposes severe conditions on opening its cash tap, including full access to abundant collateral based not on its market value, not even on its face value, but on its net value. While having tried to play lonesome cowboy, Turkmenistan is now facing the effects of a global stampede to which it is just as exposed as anyone else.
This is the fourth article of a series reviewing the post-Soviet period in Central Asian republics. The third article (on Tajikistan) can be read here
