TURKMENISTAN HITS THE GAS IN 2000.

While the quality and quantity of the official economic statistics released by CIS countries often leave much to be desired, Turkmenistan is widely viewed the region’s worst offender. Because Turkmenistan–like Uzbekistan and Belarus–does not have a working relationship with the International Monetary Fund, the economic data produced in Ashgabat are farther removed from international statistical practices than are the data released in Moscow or Kyiv. But, in contrast to Turkmenistan, the authorities in Minsk and Tashkent at least go through the motions of providing regular monthly and quarterly statistical updates. Official data releases in Ashgabat, by contrast, are fewer and farther between.

The news announced last month by the National Institute for Government Statistics and Information in Ashgabat that Turkmenistan recorded nearly 18 percent economic growth in 2000–more than double the GDP growth reported for Russia–might therefore be treated with some skepticism. But because Turkmenistan’s economy depends almost completely on natural gas, and because gas exports to Russia boomed last year, the official growth figures could even turn out to be true.

According to the official data released in January, Turkmenistan’s GDP rose 17.6 percent in 2000, compared to 7.7 percent growth in Russia. The Turkmen economic miracle was driven by industrial output, which reported 29 percent growth. The gas industry reported 120 percent output growth, and accounted for 45 percent of total industrial output. Oil production, which accounted for another 13 percent of total output, was reported up 13 percent last year: Together, these two sectors accounted for nearly 60 percent of Turkmenistan’s industrial production. Manufacturing, by contrast, lagged: Output growth in this sector was reported at “only” 11 percent, due mostly to strong growth in light industry, especially cotton refining and textiles (National Institute for Government Statistics and Information, January 2001).

As was the case in most of the CIS economies, Turkmenistan’s strong growth in 2000 came with a “made in Russia” label. Total exports more than doubled during the first eleven months of the year, almost entirely due to huge increases in exports of gas, crude oil and refined oil products. Exports to Russia, which accounted for 44 percent of the reported total, soared to US$984 million during January-November, while exports to CIS countries, including Russia, increased by 150 percent during this time.

Turkmenistan’s reliance on oil and gas, while more pronounced, is similar to that of Kazakhstan and Azerbaijan. But in contrast to these two countries, Turkmenistan has made only halting efforts at effecting a transition away from the Soviet economic system. Turkmenistan’s official statistics show that state enterprises accounted for nearly 70 percent of industrial output in 2000, with 62 percent of state sector output produced by the fuel and energy sector alone. While investment growth was reported at only 6 percent, nearly two-thirds of total investment went into the state sector. In contrast to Kazakhstan and Azerbaijan, where foreign investors are driving the energy boom, foreign direct investment accounted for only 11 percent of Turkmenistan’s investment spending in 2000. Whereas most of the foreign capital invested in the Kazakhstani and Azerbaijani energy sectors came from Western companies, much of the FDI in Turkmenistan’s oil and gas activities apparently came from Russia (Interfax, January 2001).

The National Institute for Government Statistics and Information attributes Turkmenistan’s economic miracle in 2000 to a 42 percent increase in labor productivity, as output surged while the number of workers at employed industrial enterprises dropped by 3 percent. While this argument may be technically correct, a more accurate assessment would point out that a large share of Turkmenistan’s gas production and transport infrastructure remained idle for much of the 1990s. Much of this infrastructure was brought back online in 2000 after Russia decided to purchase large amounts of Turkmenistan’s gas in January. But in contrast to Azerbaijan and Kazakhstan, Turkmenistan’s all-important energy sector remains completely dependent on access to Russia’s pipeline infrastructure. Should Moscow decide to turn off the tap, Turkmenistan’s economic miracle of 2000 could be followed by the crash of 2001.

The Monitor is a publication of the Jamestown Foundation. It is researched and written under the direction of senior analysts Jonas Bernstein, Vladimir Socor, Stephen Foye, and analysts Ilya Malyakin, Oleg Varfolomeyev and Ilias Bogatyrev. If you have any questions regarding the content of the Monitor, please contact the foundation. If you would like information on subscribing to the Monitor, or have any comments, suggestions or questions, please contact us by e-mail at pubs@jamestown.org, by fax at 301-562-8021, or by postal mail at The Jamestown Foundation, 4516 43rd Street NW, Washington DC 20016. Unauthorized reproduction or redistribution of the Monitor is strictly prohibited by law. Copyright (c) 1983-2002 The Jamestown Foundation Site Maintenance by Johnny Flash Productions