Turkmenistan

Map of Turkmenistan     Turkmenistan contains the fourth largest gas reserves in the world.  Apart from the extraction and refining of oil and gas, much of the economy is cotton-related.  An arid desert on the East of the Caspian, Turkmenistan has water shortage problems similar to Kazakhstan, causing a loss of arable land.  Its population of four million is relatively homogeneous — 70% are Muslim Turkmen.  Inflation, although rampant in all of the republics, is especially intense in Turkmenistan.  According to the IMF, the average inflation in 1994 was 1,608%.

    Turkmenistan has the same primary goal as Kazakhstan — to secure export routes that will strengthen the country economically and politically.  The means to achieve that goal, however, differ --primarily because Turkmenistan has weaker relations with Russia and stronger relations with Iran.

    When Gazprom decided not to sell Turkmen gas on European markets, leaving only delinquent customers such as Armenia and the Ukraine to Turkmenistan, it created a desperate situation.  By the spring of 1997, Ukraine owed Turkmenistan 450 million dollars for its gas shipments.  In Gazprom’s dealings, Turkmenistan’s president, Niyazov, commented that he “smelled old Soviet ambitions,” and soon after, he halted deliveries to Russia’s pipelines.  However, Turkmenistan has yet to find other customers.

    There are three reasons why Turkmenistan can distance itself from Russia far more easily than can Kazakhstan: Turkmenistan does not share a border with Russia, it does not have a significant Russian minority, and it has a potentially close relationship with Iran.  By contrast, a common border, shared interest in pipelines, and a large Turk minority in Iran, all draw Turkmenistan toward Iran. Turkmenistan’s relationship with Iran is indeed sufficiently strong enough to allow Turkmenistan to oppose (or at least not overtly support) routes preferred by the west, namely Turkey and the United States.  Recently, Kazkahstan, Turkey, and the United States signed a declaration in Ankara in favor of a Trans-Caspian pipeline that would bypass Iran.  Unwilling to upset Iran, but nonetheless desiring to keep as many options open as possible, Turkmenistan opted for a bilateral agreement with Turkey instead.

    Overall, Turkmenistan will support any realistic alternative to get its gas out.  If the wishes of Turkey and the United States prevail regarding the trans-Caspian pipeline, Turkmenistan will send its gas across the Caspian.  On the other hand, if the economic incentives of a route through Iran overcome current political obstacles, Turkmenistan will send its gas via Iran to Turkey.  By whichever route the gas ends up getting to market, the key to development in Turkmenistan is in the hands of its authoritarian, but nonetheless entrepreneurial, President Niyazov.  He has repeated several times that every cent of gas revenues will go into a government fund and, consequently, has run into conflicts with several independent oil and gas companies.

Turkmenistan Links