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Turkmenistan (01/01)


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PROFILE

OFFICIAL NAME:
Turkmenistan

Geography
Area: 229,060 sq. km. (88,100 sq. mi.).
Cities: Capital--Ashgabat. Other cities--Turkmenabat (formerly Chardjou), Dashowuz, Mary, Turkmenbashi.
Terrain: 80% covered in subtropical, sandy Karakum Desert, with dunes rising to the Kopet Dag Mountains in the south along the border with Iran; borders the Caspian Sea to the west and the Amu Darya River and Uzbekistan to the east; borders Afghanistan to the southeast, Kazakhstan to the north.

People
Nationality: Turkmen.
Population (July 2000 est.): 4,518,268.
Annual growth rate (2000 est.): 1.87%.
Ethnic groups: Turkmen 77%, Uzbek 9.2%, Russian 6.7%, Kazakh 2%, other 5.1%.
Religions: Muslim 89%, Eastern Orthodox 9%, unknown 2%.
Languages: Turkmen 72%, Russian 12%, Uzbek 9%, other 7%.
Education: Literacy--98%.
Work force: 2.34 million.

Government
Type: Republic.
Independence: October 27, 1991 (from the Soviet Union).
Constitution: May 18, 1992.
Branches: Executive--president. Legislative--Parliament; People's Council. Judicial--Supreme Court.
Administrative subdivisions: 5 Velayat (provinces)--Ahal Velayat (Ashgabat), Balkan Velayat (Nebitdag), Dashowuz Velayat (formerly Tashauz), Lebap Velayat (Turkmenabat, formerly Chardjou), Mary Velayat.
Political parties: Democratic Party of Turkmenistan (opposition parties are outlawed).
Flag: Green field with a vertical red stripe near the hoist side, containing five carpet guls stacked above two crossed olive branches similar to the olive branches on the UN flag; a white crescent moon and five white stars appear in the upper corner of the field just to the fly side of the red stripe.

Economy
GDP (1999 est.): Purchasing power parity--$7.7 billion.
Real growth rate (1999 est.): 9%.
Inflation rate (1999 est.): 30%.
Per capita income (1999 est.): Purchasing power parity--$1,800.
Unemployment rate: NA.
Agriculture: Products--cotton, grain, livestock.
Industry: Types--natural gas, oil, petroleum products, textiles, food processing.
Trade: Exports (1999 est.)--$1.1 billion: oil and gas 55%, cotton 22%. Partners--Iran, Turkey, Russia, Kazakhstan, Tajikistan, Azerbaijan. Imports (1999 est.)--$15 billion: machinery and equipment 45%, chemicals, foodstuffs. Partners--Ukraine, Turkey, Russia, Germany, U.S., Kazakhstan, Uzbekistan. Debt--external (1999 est.): $2.1 billion.
Exchange rate: 5,200 manat=$1 (official rate fixed by the government). There is no secondary market, but the black market exchange rate is roughly four times the official rate)

PEOPLE AND HISTORY  
The territory of Turkmenistan has been populated since ancient times, as armies from one empire to another decamped on their way to more prosperous territories. Tribes of horse-breeding Turkmen drifted into the territory of Turkmenistan from ancient times, possibly from the Altay Mountains, and grazed along the outskirts of the Karakum Desert into Persia, Syria, and Anatolia.

Alexander the Great conquered the territory in the 4th century B.C. on his way to India. One hundred fifty years later the Parthian Kingdom took control of Turkmenistan, establishing its capital in Nisa, an area now located in the suburbs of the modern-day capital of Ashgabat. In the 7th century A.D. Arabs conquered this region, bringing with them the Islamic religion and incorporating the Turkmen into Middle Eastern culture. It was around this time that the famous "Road" was established as a major trading route between Asia and Europe.

In the middle of the 11th century, the powerful Turks of the Seldjuk Empire concentrated their strength in the territory of Turkmenistan in an attempt to expand into Afghanistan. The empire broke down in the second half of the 12th century, and the Turkmen lost their independence when Genghis Khan took control of the eastern Caspian Sea region on his march west. For the next 7 centuries the Turkmen people lived under various empires and fought constant intertribal wars amongst themselves.

From the 16th century on, Turkmen raiders on horseback preyed on passing caravans, pillaging and taking prisoners for the slave trade. After kidnapping Russians from the expanding Tsarist Empire, the Turkmen fell into trouble. Russia sent forces to Turkmenistan, and in 1881 fighting climaxed with the massacre of 7,000 Turkmen at the desert fortress of Geok Depe, near modern Ashgabat; another 8,000 were killed trying to flee across the desert. By 1894 imperial Russia had taken control of Turkmenistan. The October Revolution of 1917 in Russia and subsequent political unrest led to the declaration of the Turkmen Republic as one of the 15 republics of the Soviet Union in 1924. At this time the modern borders of Turkmenistan were formed.

The Turkmen Republic was under full control of Moscow, which exploited its raw materials resources for the purposes of the Soviet Union. Sovereignty was only a formality, since Russia ultimately ruled all Soviet states.

GOVERNMENT AND POLITICAL CONDITIONS  
Following the end of the Cold War and the breakup of the Soviet Union, Turkmenistan declared its independence on October 27, 1991. Saparmurat Niyazov became the first president of the new republic and still remains the supreme decisionmaker. On December 28, 1999, Niyazov's term was extended indefinitely by the Mejlis (parliament), which itself had taken office only a week earlier in severely flawed elections that included only candidates hand-picked by President Niyazov. Independent political activity is not allowed in Turkmenistan, and no opposition candidates were allowed. The Democratic Party of Turkmenistan (DPT) is the only legal political party. Political gatherings are illegal unless government sanctioned, and the citizens of Turkmenistan do not have the means to change their government democratically.

While the constitution provides for freedom of the press, there is virtually no freedom of the press or of association; the government has full control of all media. Only two newspapers, Adalat and Galkynysh, are nominally independent, and they were created by presidential decree. Cable TV, which existed in the late 1980s, has been shut down.

The population is overwhelmingly Sunni Muslim. Activities of all but the official Russian Orthodox and Sunni Muslim faiths are severely limited. The persecution of minority religious faiths is common, with particularly severe measures directed toward Baptists, Pentecostalists, Seventh-Day Adventists, Hare Krinsha, Jehovah's Witnesses, and the Baha'i. Many places of worship have been destroyed and practitioners of minority faiths harassed, imprisoned, and/or tortured. Religious congregations are required to register with the government, and individual parishes must have at least 500 members to register.

A Soviet-style command economy greatly limits equality of opportunity. Industry and services are almost entirely provided by government or government-owned entities, while agriculture is dominated by a state order system. Women face particularly strong discrimination in all social aspects, and their freedom is restricted due to traditional social-religious norms. All citizens are required to carry internal passports, noting place of residence, and movement into and out of the country, as well as within its borders, is difficult.

Corruption continues to be pervasive. Power is concentrated in the president; the judiciary is wholly subservient to the regime, with all judges appointed for 5-year terms by the president without legislative review. Little has been done to prosecute corrupt officials.

Principal Government Officials
President--Saparmurat Niyazov Prime Minister--Vacant Foreign Minister--Batyr Berdiyev

Ambassador to the United States--Chary Annaberdiev, Charge d'Affaires a.i., 2207 Massachusetts Avenue NW, Washington, DC 20008; telephone: (202)588-1500, fax: (202)588-0697

ECONOMY
Turkmenistan was an important supplier of raw materials, especially cotton, oil, and natural gas, during the Soviet era. One-half of its irrigated land is planted in cotton, making it the world's 10th- largest producer; and it possesses the world's fifth-largest reserves of natural gas as well as substantial oil resources. Until 1993, Turkmenistan experienced less severe economic decline in comparison with other former Soviet states because it was able to sell its natural gas and oil at world prices. In 1994, the Russian Government refused to allow exported Turkmen gas to pass through Russian pipelines to hard currency markets. Industrial production of gas fell sharply, putting the budget into deficit--a deficit which has since continued to rise sharply. Currently, Turkmenistan is heavily dependent on Russian pipelines to reach markets in Europe; because oil and gas account for one-third of Turkmenistan's budget revenues, Turkmenistan is working to open new gas export corridors through Iran and under the Caspian Sea into Turkey.

After Russia's refusal to transport Turkmenistan's gas, a difficult investment environment, high rates of inflation, and heavy government regulations made further economic progress unlikely. In the absence of gas revenues, Turkmenistan turned to the export of cotton, but poor harvests had weak economic returns. In 1996 the economy bottomed out, and inflation rates continued to climb. Although the government avoided privatization, it attempted to fix the situation by creating a stabilization program aimed at a unified and market-based exchange rate, the allocation of government credits by auction, and strict limits on budget deficits. However, partial price liberalization, the end of subsidies from Moscow, and poor control over fiscal and monetary aggregates contributed to the high rates of inflation and significant drops in living standards. Despite these conditions, official statistics for 1998 indicated improvements in Turkmenistan's economy. In September 1998 Turkmenistan began exporting gas to Iran via its first pipeline not crossing Russian territory.

The Turkmen Government claims to have placed great emphasis on foreign economic relations and foreign trade and an "open door" trade policy, as declared by the President. At present 73 countries are partners of Turkmenistan, including the republics of the NIS. The most prominent trade partners of Turkmenistan are the U.S., Turkey, Switzerland, Hong Kong, Germany, Great Britain, Cyprus, Iran, and the U.A.E.

Export of industrial and agricultural raw materials remain the most important goals of the Turkmen Government. Price controls on most goods, the stabilization of reproduction processes, the creation of stable economic growth, and flexibility to innovations and a socially oriented economy also are very important. The government is attempting to strengthen state regulation of foreign trade and create a state system of insurance to expand and consolidate foreign economic relations. Because of considerable growth of foreign investments, structural improvements are taking place in the economy. Privatization and structural reform of medium and large enterprises are proceeding slowly. In early 1999, Turkmenistan's foreign debts totaled more than 75% of GDP, making an IMF bailout package seem unavoidable.

FOREIGN RELATIONS
Turkmenistan's declaration of "permanent neutrality" was formally recognized by the United Nations in 1995. Turkmenistan has been supportive of the Taliban regime in Afghanistan.

Although the Government of Turkmenistan claims to favor trade with and export to the United States and Turkey, it has significant commercial relationships with Russia and Iran and a growing cross-border trade with the Taliban regime in Afghanistan. The Government of Turkmenistan often appears to be trying to use the conflicting interests of these regional partners as a means to extract concessions from the others, especially on energy issues. Turkmenistan has poor relations with Azerbaijan, Uzbekistan, and Kazakhstan.

U.S.-TURKMENISTAN RELATIONS
For several years, Turkmenistan was a key player in the United States Caspian Basin Energy Initiative, which sought to facilitate negotiations between commercial partners and the Governments of Turkmenistan, Georgia, Azerbaijan, and Turkey to build a pipeline under the Caspian Sea and export Turkmen gas to the Turkish domestic energy market and beyond--the so-called Trans-Caspian Gas Pipeline (TCGP). However, the Government of Turkmenistan essentially removed itself from the negotiations in 2000 by refusing all offers by its commercial partners and making unrealistic demands for multimillion dollar "prefinancing."

The United States and Turkmenistan continue to disagree about the country's path toward economic reform. The U.S. has publicly advocated industrial privatization, market liberalization, and fiscal reform, as well as legal and regulatory reforms to open up the economy to unhindered foreign trade and investment, as the only way to achieve prosperity and stability.

Principal U.S. Officials
Ambassador--Steven R. Mann Deputy Chief of Mission--Eric Schultz Political-Economic Chief--Eileen Kropf Administrative Officer--Sarah Penhune USAID Director--Murl Baker

The U.S. embassy is located at 9 Pushkin Street, Ashgabat, Turkmenistan; tel: [993](12)35-00-45; fax: [993](12)51-13-05.



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