Shrinking exports spell trouble for Turkmenistan

WHEN the price of natural gas was high, Turkmenistan raked in $10bn a year from exports—a tidy sum for a country of 5m people. Most of it went on the grandiose schemes of Gurbanguly Berdymukhammedov, the authoritarian president and self-proclaimed “Protector”, or was distributed to his cronies. But the economy nonetheless grew at an average annual rate of 11% between 2010 and 2014, according to official statistics.

The price of natural gas has since halved, however, with dire consequences. Gas accounted for a quarter of GDP and half of all government revenue. The low price means the economy has slowed markedly (see chart), and the budget has swung from a surplus of nearly 10% of GDP in 2012 to a projected deficit of 3% this year. Dwindling foreign-exchange reserves equate to just nine months of imports.

For ordinary people, life is getting tougher. The government has raised the prices of subsidised electricity, gas and water. The devaluation of the manat, the currency, has pushed up already-high inflation: food prices rose by 28% in 2015. There are shortages of basic goods, such as flour, in some provinces. Bosses at state-owned...Continue reading

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