Clouds hover over Ashgabat

Clouds hover over Ashgabat


Share on Facebook
Share on Twitter
Share on Google+
Share on LinkedIn
+

Last year, declarations made by many officials in Turkmenistan were met with a general euphoria. The future for this energy-rich Central Asian country was believed to be lined with gold.

After all, Turkmenistan has the fourth-largest gas reserves in the world and nearly half of its production was exported. Last year, many analysts described the country as a “new energy giant”. By 2020 Turkmenistan will provide China with 40% of its needs in natural gas.

But much has changed since last year. By the end of 2014, the euphoria had vanished completely from Turkmenistan’s capital city of Ashgabat. The initial euphoria has since been replaced by a sense of economic unease amidst a growing economic crisis.

Turkmenistan, an isolated and relatively small country, was well protected from the explosion in the Russian market. This is why the 19% devaluation of Turkmenistan’s national currency, the Manat, came as a surprise.  To justify the devaluation, Turkmenistan’s president blamed the crisis in the oil market. Some analysts, however, said Turkmenistan was trying to salvage its commercial relations with Russia since the ruble was heavily devaluated in 2014.

But the fact is the government of Turkmenistan is facing very serious economic problems.

Following the devaluation of the currency, long queues outside the banks were reported as citizens rushed to convert their mantas into dollars. As a result of the devaluation, prices increased. The Chronicles of Turkmenistan, a news site published by political refugees abroad, reported that unemployment is up and salaries down in the country’s state-run energy sector.

Two of the country’s major energy consumers, Russia and Iran, decided to reduce their imports.

The first declared it would cut more than 50% of its imports in natural gas in 2015. The second is trying to redirect its energy policy and will focus on domestic production.

Meanwhile, two important projects, the Turkmenistan-Afghanistan-Pakistan-India Natural Gas Pipeline (TAPI) and the trans-Caspian link to Europe are, for the moment, only ambitious plans.

The TAPI is faced with the growing tension and political confrontation between Pakistan and India.

As for the trans-Caspian link to Europe, this would bring the Turkmen gas to the European market via Azerbaijan. But since Russia has opposed the project and local territorial disputes in the Caspian region remain unresolved, it is a plan for the very distant future.

All the above suggests the future for Turkmenistan’s energy deals is not looking too bright. China, which is a big trade partner and invests heavily on infrastructure in Turkmenistan, will be the country’s only important partner. But China will be a partner with a position to exert force and to impose prices and rules on Turkmenistan.

This rather bleak economic picture is made even grimmer by the alarming security situation that is unfolding.

The Turkmenistan regime seemed to be immune to political and religious threats. But the latest developments have proven otherwise.

The Turkmen-Afghan border is reportedly under threat from different jihadist groups, some close to the Taliban and others aligned with Islamic State.

There are also reports of military confrontations in isolated borders areas. On the other side, there is a noticeable unrest among the people of Turkmenistan.

On two separate occasions last year, as reported in the foreign media, the citizens of Ashgabat demonstrated against authorities when they decided to remove satellite disks from rooftops.

In February, in the city of Tejen, police arrested 80 people accused of having links with Islamic State. As reported by the opposition, however, they might have been arrested for another reason like organising a demonstration to protest against the rising cost of living.

The Ashgabat regime will probably manage to control the situation by using force. But, due to the secretive nature of the regime it is difficult to know the real situation especially concerning the danger of public unrest. This year, the Turkmen regime will no doubt have to address some serious problems and a re-evaluation of its policy will probably be necessary.

Share on Facebook
Share on Twitter
Share on Google+
Share on LinkedIn
+