FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT APRIL 2009
STATE COMMODITY & RAW MATERIALS EXCHANGE OF TURKMENISTAN
ECONOMIC AND POLITICAL DEVELOPMENTS
Politic and Economic Environment
The president, Gurbanguly
Berdymukhamedov, has presided over some
modest reforms in his first 18 months in
office, but hopes among international
observers for a more open political system
have yet to be realized. Although Mr
Berdymukhamedov has taken steps to
redress some of the more damaging policies
implemented by his predecessor,
Saparmurad Niyazov, the new president’s
governing style in many ways differs little
from that of Mr Niyazov, and prospects for a
fundamental shift towards a more liberal
political system seem remote.
Mr Berdymukhamedov has continued to play
host to numerous high-level delegations from
potential gas customers, and has maintained
his stance that Turkmenistan is open to
foreign investors--an implicit
acknowledgement that the country lacks the
technical expertise to exploit its resources
fully. Russia will remain Turkmenistan’s
largest gas export market in 2009-10, but will
continue to face competition from China, the
EU and potentially the Middle East.
One positive change was the unification of
the commercial and official exchange rates
in May 2008, in preparation for a
redenomination of the manat in 2009.
However, state control over the leading
economic sectors remains tight, public
finances remain opaque and monetary policy
remains rudimentary.
The global economy is set to slow sharply
and the downside risks to the world
economic outlook remain elevated, owing to
continued problems in the US and European
financial sectors, as well as to global
inflationary pressures. Nevertheless,
Turkmenistan will remain protected to a
certain extent, owing to its relative isolation
from global financial markets, as well as the
fact that demand from Russia, China and
European countries for its principal export
commodity, gas, will remain high. For this
reason, Turkmenistan will retain bargaining
power in negotiations over the price of its
gas exports to Russia, and is believed to
have already secured a rise in the price for
2009 of at least 60%.
Economic Performance
Still the slowest growth rate for some years,
owing to stagnation in output of gas, the
main driver of growth. Output of natural gas
is expected to rise, driven mainly by the
export contract with Russia, and construction
of new pipeline infrastructure will also
support growth. Prestige building projects
and new industrial facilities will drive growth
in construction, as will a rural development
program. Real GDP growth is forecast to
pick up to an average of 7.5% in 2009-10.
previously suggested a rate of 1:1,000). The
IMF welcomed the currency reform for its
potential to benefit Turkmenistan’s economic
and financial development.
The trade and current-account balances are
expected to continue to record large
surpluses. As in previous years, the main
source of export revenue will be oil and gas.
Modest increases in gas output will be
accompanied by higher prices. Moreover,
global oil prices are expected to stay above
historical levels, thereby ensuring that
revenue from exports of crude oil and oil
products holds up.*
* The Economic Intelligence Unit Ltd.October 2008.
The rate of price rises is believed to have
accelerated in 2008, owing to large
increases in prices of fuel and public
transport, as well as higher prices for
imported foodstuffs.
The exchange rate has been unified at
Manat14,250:US$1 with effect from May
2008. The unification required a substantial
weakening of the official rate of
Manat6,250:US$1 and a strengthening of the
commercial rate of Manat20,000:US$1, both
set in January 2008. The unification of the
exchange rate will be followed in 2009 by a
redenomination of the manat. The authorities
have announced that 1 new manat will be
equivalent to 5,000 old manat (having
1999-ORIGINS OF GROSS DOMESTIC PRODUCT (%)
Industry
Agriculture & forestry
Construction
Services
26.0
32.0
11.0
31.0
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