International Trade in Turkmenistan

News Related to International Trade in Turkmenistan

Business outline for Turkmenistan

Economic Overview

Turkmenistan is mostly a desert country, very low populated (the population density is 10 inhabitants per square kilometer) and its economy depends mainly on oil, natural gas and agriculture (essentially cotton). The country has the fifth largest reserve of natural gas in the world.

The manufacturing sector as a whole contributes about 40% to the GDP. The services sector represents 40.8% of the GDP. The agricultural sector employs half of the active population but it represents only 20% of the GDP.

In 2010, Turkmenistan recorded a growth of 9.4%, which had decreased in relation to 2008. Its light exposure to the international financial markets and its reduced foreign debt protected the country from the international financial crisis. Inflation was about 3.9% in 2010.

The government of President Berdymuhammedov practices an open political and commercial "all azimuth" method towards its foreign partners, who are attracted by the hydrocarbon reserves. Turkmenistan tries to comply to their requests by constructing pipelines, such as one into China and another one into Iran which were inaugurated in December 2009.  

The state puts into practice public investment policies in the construction and infrastructure sectors. Many projects are being implemented in agriculture, health care, railroads and tourism (the sea resort of Albaza on the coast of the Caspian Sea). The attempts to diversify the country's economy have been launched and since Turkmenistan joined the Central Asia Regional Economic Cooperation (CAREC) on November 2nd, 2010, this can contribute to reach its goals.  In any case, the country is willing to open its economy, a new step since the middle of the 1990s.

FDI in Figures

The level of foreign investment in Turkmenistan is still relatively low, especially when compared to Kazahstan. The state-control methods, the restrictions in the currency exchange system, excessive and inconsistent regulations, corruption in the government, the lack of an established rule of law, as well as the lack of experience in international business matters are all discouraging factors to foreign investors. However, hydrocarbons and petro-chemicals are attracting, more and more, foreign investors. Russia, Kazakhstan, Uzbekistan and now also China are the main investing countries.

Foreign Trade Overview

The Government of Turkmenistan monitors tightly all foreign trade through the State Commodity and Raw Materials Exchange (CRME). The country's trade policy aims at expanding foreign markets for gas, oil products, electricity, and cotton.  Customs duties are relatively low in Turkmenistan and the laws have been modified. The lack of transparency at the government level, the widespread poverty and an over-cautious approach to liberalize the economy are some of the factors acting as trade barriers.

The factors that limit the development of trade in the country are: a lack of rule of law, excessive and inconsistent regulations, high level of unemployment (even if its evaluation is complicated since the official data shows a large range from 25% to 60%), a poor educational system and the government's mishandling of revenues from oil and gas.

Turkmenistan exports more than what it imports. This fact has produced a substantial trade surplus in 2008. Even though the country was forced to interrupt a large part of its gas deliveries between April 2009 and January 2010, due to an unexpected explosion in one of its pipelines of this "blue gold" which was going into Russia, the country had its balance of payments reduced by USD 1.678 billion in 2009.  
The country exports to Ukraine, Iran and Poland and imports from Russia, China, Turkey and the United Arab Emirates.