THE
Introduction and Policy Recommendations
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Several foreign born students living in California have completed a study of their home country governments' economic policies as compared to the MIEPA list of policies as outlined above. The study on Turkmenistan is shown below. The ratings herein are based on the following rating scale:
RATING SCALE
5.0 Perfect Facilitation of Wealth Creation
4.0 Midway between Perfect and Neutral
3.0 Neutral Effect on Wealth Creation
2.0 Midway between Neutral and Obstructionist
1.0 Perfectly Obstructionist to Wealth Creation
[Rating scale copyright Mike P. McKeever, 2006. Used herein with permission]
To read a disclaimer about the analysis in this file, scroll to the bottom of the file.
TURKMENISTAN:
Comparison of Turkmenistan's economic policies to MIEPA criteria as prepared by native student who wished to remain anonymous, studying in San Francisco in Spring, 2006.
RATING SUMMARY
POLICY NUMBER RAW SCORE ADJUSTED SCORE POSSIBLE PERCENTAGE
1 3.5 10.5 15.0 70%
2 0.01 0.03 15.0 .002
3 0.5 1.5 15.0 10
4 1.7 5.1 15.0 34
5 1.8 5.4 15.0 36
6 1.8 5.4 15.0 36
7 3.5 10.5 15.0 70
8 0.9 2.7 15.0 18
9 0.1 0.3 15.0 02
10 1.5 4.5 15.0 30
11 1.2 3.6 15.0 24
12 0.4 0.8 10.0 08
13 3.9 7.8 10.0 78
14 3.5 7.0 10.0 70
15 0.5 1.0 10.0 10
16 2.9 5.8 10.0 58
17 0.5 1.0 10.0 10
18 0.8 1.6 10.0 16
19 1.1 2.2 10.0 22
20 1.0 2.0 10.0 20
21 2.9 5.8 10.0 58
22 0.5 1.0 10.0 10
23 1.0 2.0 10.0 20
24 1.9 3.8 10.0 38
25 3.1 6.2 10.0 62
26 1.2 2.4 10.0 24
27 2.7 5.4 10.0 54
28 2.9 5.8 10.0 58
29 4.9 4.9 5.0 90
30 1.0 1.0 5.0 20
31 3.8 3.8 5.0 76
32 2.8 2.8 5.0 54
33 4.6 4.6 5.0 92
34 2.6 2.6 5.0 52
TOTAL 67.01 130.83 375.0 34.9%
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1. Freedom from internal control: 3.5
It is pretty cheap to fly within the country itself. There are no problems for legal residents to move around the country, although there are checkpoints in some areas within 50 miles of the border.
Sources: personal experience.
2. Freedom of Speech: 0.01
If you get caught saying something bad about the president of Turkmenistan, you most likely just disappear. And you could be thrown to jail if you critique government?s actions. And usually people die there either from tuberculosis, malnutrition or some other disease.
Sources: personal experience.
3. Fair Police Force: 0.5
The police force as any other branch is there to accept bribes. Traffic police officers for example pull over cars in attempt to collect money. If you get pulled over you either get a ticket or your license will be taken away and in order to get it back you will have to go through so much stress and lot of time will be wasted. So in order not to receive a ticket people end up paying anywhere from $5 to $100 depending on the infraction.
Sources: personal experience.
4. Private Property: 1.7
Again, if you have money it is easy to buy or build a house. However demolition projects are very common. If in any given area houses do not look good, they could be demolished and parks build instead. If the area is to be demolished then no matter how big or nice is your house it will be demolished as well and you will be given a flat in newly build apartment complexes. In the matter of fact the new house will be owned by the government and in order to privatize them you will need to pay from $2000 to $5000.
Sources: personal experience.
5. Commercial Banks: 1.8
Currently there are 12 banks in Turkmenistan. Five are State banks (Turkmenvnesheconombank, Sberbank(savings bank), Turkmenistanbank, Turkmenbashibank, and Daykhanbank. Three are joint stock commercial: Senagat bank, Garashsyzlyk bank, and garagum bank. Two are joint bank: with foreign participationTurkmen-Russian kreditbank and Turkmen-Turkish bank. Two are foreign banks: Pakistani and Iranian banks.(www.bisnis.doc.gov 04.01.06) Companies may apply for currency conversion with Commercial banks in Turkmenistan. The banks, in turn, Submit the request to the interbank foreign exchange (ife). In theory, the central bank provides hard currency to the Ife based on the requests it receives from commercial banks. In practice, however, the central bank has not funded the Ife sufficiently to meet the demand for hard currency.
Commercial banks may wait for hard currency for weeks and Even months; in many cases the central bank has supplied Less than a tenth of the amount requested. After the theft of usd 41 million from the central bank in September 2002, Commercial banks in Turkmenistan were forbidden from Independently carrying out correspondent, deposit, Investment, and other operations in hard currency outside Turkmenistan. Hard currency transactions may currently only Be made through central bank or vnesheconombank accounts; Amounts exceeding $1m require presidential approval.
Sources: www.state.gov
6. Communications System: 1.8
Very recently people started acquiring internet access. Even right not everyone can afford to have internet. Radio ? is not liberal and there is not many stations available .TV ? There are only 3 national channels that broadcast the president and boring crap. Most of the people get a satellite and watch Russian channels.
Sources: personal experience.
7. Transportation: 3.5
The road in the capital are brand new and very smooth. But the closer you get to the border the less developed they get.
Sources: personal experience.
8. Education: 0.9
According to the 1989 census, 65.1 % of the population aged fifteen and older had completed secondary school, compared with 45.6 % in 1979. In the same time, the %age of citizens who had completed a higher education rose from 6.4 % to 8.3 %. Turkmenistan has a literacy rate of 99.7 %, a holdover from the Soviet time. (mapzones.com, 03.25.06) But since the new president Saparmurat A. Niyazov took charge the education system started to disintegrate. In high school all physical education was removed. Geography and some other important subjects were removed as well. The main subject is the book called ? Ruhname?, a book written by the president about the values and ways one should live.
Sources: personal experience.
9. Social mobility: 0.1
First of all one can not even get into university without bribing, which is about $5000 to $10000 to get into decent university - ?Institute of Languages? .In seconds, if one graduates in another country, no matter which, that education is not considered as valid. In thirds, even after graduating it is impossible to get a job. Again in order to get a job one has to bribe again. Then after getting a job that person has from 6 to 12 months to accept bribes through his position. After that time someone else will be appointed for that position and the first person will be unemployed again. So it is a circle that never ends.
Sources: personal experience.
10. Freedom from outside control: 1.5
In January at least 55 men and women were sentenced to prison terms ranging from five years to life for involvement in the attack on President Niyazov?s motorcade in the capital, Ashgabat, in November 2002. They were convicted in a series of closed trials before the Ashgabat City Court and the Supreme Court. In March and April, seven men arrested in connection with the November 2002 attack were handed over to the authorities in their countries of origin ? one to the USA, six to Turkey. The six were put on trial in Turkey, charged with attempting to assassinate the President of Turkmenistan.
Sources: web.amnesty.org
11. Foreign Currency: 1.2
The dollar is widely used and actually welcomed by sales people. Actually in some places like Hotels and entertainment industry dollars are widely used, because most of the clients are foreigners.
Sources: personal experience.
12. Border Control: 0.4
In order to enter the country one needs a permit. But again money could buy anything as well as the soldiers at the border. So if you pay them guess what ? you?ve got access.
Sources: personal experience.
13. Currency: 3.9
?Manat? is the national and the only currency accepted. Of course dollars are accepted as well but manat is still considered primary currency. $1 dollar equals to 5000 manat on gov?t market or official exchange rate, but $1 equals 24000 manat on black market.
Sources: personal experience.
14. Cultural and Language Homogeneity: 3.5
All official documents are in Turkmen, which is the national language. Also all schools and institutions as well as laws are in Turkmen. But since it was part of USSR there is big population of Russian speaking people. Although most of people that do not speak Turkmen language migrated to different countries, there is still a huge population of Russians and other ethnic groups.
Sources: personal experience.
15. Political effectiveness: 0.5
In the past 20 years since Niyazov became the president there were no major natural disasters. But the gov?t is not even ready for any type of disaster. There are no preventive activities nor there training or education on emergency situations.
Sources: personal experience.
16. Institutional stability: 2.9
Since the Saparmurat Niyazov became the president most institutions experienced changes but since then do not change, but the workers are fired and reappointed very often. Also new some minor changes happen within the institution.
Sources: personal experience.
17. Honest Government: 0.5
The government is everything opposite of Honest. Of course on international level it is politically very careful not to arise any conflicts and not to catch any ones attention. But inside the country the president decided what is right and wrong. If the laws are on the way of fulfilling president?s wish then that law will be changed. Just like was the constitution changed, to allow the president to hold his post until his death.
Sources: personal experience.
18. Common Law: 0.8
The laws are the same for everyone, except those who have money. If one has lots of money then he does not have to abide by any laws. The bribery is the common law. Even if someone is accused of criminal action, money could reverse everything. If one committed a murder a good sum of cash at the right time will keep the criminal out of jail.
Sources: personal experience.
19. Central Bank of Turkmenistan: 1.1
In 1993 Central Bank of Turkmenistan was used to hold huge amounts of drugs. They were imported under supervision of the president. Rules of the bank were broken by the president?s wish. So if the rules are broken to suit President?s wish then rules with finance could be ignored as well.
Sources: www.Jamestown.org
20. Domestic budget management: 1.0
During 1996 the level of Turkmenistan's external debt increased substantially, reflecting the fact that long-term economic planning is still premised on expectations of substantial hard currency earnings from gas sales abroad. On the positive side, the average maturity of its debt also increased substantially, indicating that creditors' share confidence in the country's mid- to long-term potential. However, the inability of the country's gas customers to pay for deliveries and a drastic reduction in revenues from Turkmenistan's other main export, cotton, led to continued problems in servicing Turkmenistan's external debt. Although payments have been made on loans guaranteed by the Ex-Im Bank, private lenders report long delays in receiving payments.
Turkmenistan's debt situation remains murky but worrisome. The U.S. Embassy estimates the total debt at more than $3 billion; the Central Bank has virtually no official reserves. International financial institutions estimate that approximately $2 billion is held in foreign accounts as a Foreign Export Reserve Fund; however, the funds appear to be completely controlled by President Niyazov and thus are not necessarily available to meet external debt obligations. The size of the Government's fiscal deficit is unclear. Many public sector transactions are conducted off budget. Many ministries are required to cover a significant portion of their operating expenses.
Exports - $4bn. Imports $2.85 billion. Revenues 3.05 billion. Expenses 3.05 billion. Since Turkmenistan?s economic statistics are state secrets and most of the numbers are wrong including budget it is impossible to analyze government?s spending and income.
Sources: www.state.gov.
21. Government Debt: 2.9
The government debt is $2.9 bil. In 1998-2005, Turkmenistan suffered from the continued lack of adequate export routes for natural gas and from obligations on extensive short-term external debt. At the same time, however, total exports rose by 20% to 30% per year in 2003-2005, largely because of higher international oil and gas prices. In 2005 Ashgabat sought to raise natural gas export prices to its main customers, Russia and Ukraine, from $44 per thousand cubic meters (tcm) to $66 per tcm. Overall prospects in the near future are discouraging because of widespread internal poverty, the burden of foreign debt, the government's irrational use of oil and gas revenues, and its unwillingness to adopt market-oriented reforms. Turkmenistan's economic statistics are state secrets, and GDP and other figures are subject to wide margins of error. In particular, the rate of GDP growth is uncertain.
Sources: http://en.wikipedia.org
22. Business statistics: 0.5
Statistics and information is not readily available. Since the country became independent recently the process of gathering statistics is not yet established.
Also if the statistics make the country to look bad they will not be published. The government controls everything including news and media. Whoever disagrees will be sent to jail.
Sources: personal experience.
23. Protection of Public health and Safety: 1.0
Death of infants under 1 year of age was 100 in year 1960, and 25 in year 2000 per 1000 of births.
Population with sustainable access to affordable essential drugs (%), 1999-50-79 One-year-olds fully immunized against tuberculosis (%), 2001-99 One-year-olds fully immunized against measles (%), 2001-98 Births attended by skilled health personnel (%), 1995-2001- 62 Physicians (per 100,000 people), 1990-2002- 97 Public health expenditure (as % of GDP), 2000- 300 Private health expenditure (as % of GDP), 2000- 4.6 Health expenditure per capita (PPP US$), 2000- 0.8
Laws of the black-market have taken hold of Turkmenistan?s health-care system, forcing people to pay for treatment that until recently was virtually free. In addition, doctors, seeking to bolster their meager salaries, often resort to carrying out unnecessary treatments. Niyazov has steadily curtailed government support for health-care professionals since the country gained independence in 1991. Perhaps his most notorious move came in 2004, when he ordered the dismissal of an estimated 15,000 skilled health-care workers and replaced them with military conscripts. In early 2005, the mercurial Turkmen leader mentioned that all hospitals outside the capital Ashgabat would be closed. Given the restrictions on movement inside the country and the country?s tightly controlled press, outside experts have had difficulty in determining the extent to which the hospital-closing plan has been carried out. The lack of basic care makes diabetes and hypertension fatal where they needn?t be. Many patients who gain access to a doctor become victims of what is tantamount to extortion. For example, he said that it is common for a woman bringing in a child for a routine check-up to be forced to undergo a gynecological exam herself, for which high fees are charged. The tests are unnecessary and serve only to augment doctors? incomes.
Sources: Benrd Rechel, Martin McKee, Echohost contributors.
24. High Wage Policies: 1.9
The government wages are really low. High ranking positions like ministers and directors of organizations usually take bribes and still in order to leave well. There are of course jobs that pay high wages but not many. Since the prices of necessities are low it is possible to exist and one could get by and find somehow find money for food. The tax on house is minimal, gas is free, and if one ones the house all he needs is to get food. But if you want to leave high standard of living it is hard to do it legitimately, it would require taking bribes and being untruthful.
Sources: personal experience.
25. Environmental protection: 3.1
After becoming, on March 2, 1992, a full-fledged member of the United Nations, Turkmenistan as a young Sovereign State undertook a liability to steadily follow the principles of the Declaration of Human Rights. Upon adoption in December 1995 by the UN General Assembly of a special resolution on permanent neutrality of Turkmenistan, the higher representative body of people's power of the country, the People's Council, passed in addition the Declaration on International Liabilities of the State in Relation to Human Rights and Freedoms.
Having joined the world community, Turkmenistan declared about its adherence to international obligations and joined the Convention on Biodiversity, the Convention on Desertification Control, the Convention on Climate Changes, the Vienna Convention, and the Montreal Protocol on Protection of the Ozone Layer, Aarhus Convention, etc.
Turkmenistan has developed and is now realizing the Program on reduction of use of ozone-depleting substances. In 1999, according to the agreement with the Global Ecological Fund, Turkmenistan has received equipment and substitutes of ozone-depleting substances on privileged terms. Certain efforts are made in the country to improve the environmental literacy. The future ecologists and meteorologists are educated at the Department of Ecology of the Natural-Geographical Division, Magtymguly Turkmen State University. The structure of the Ministry of Nature Protection of Turkmenistan has been reformed. The National Institute of Deserts, Flora and Fauna was created under this Ministry; this allowed to consolidate the scientific research in natural conservation and to increase the contribution of Turkmenistan toward the implementation of both national and regional programs and projects.
The Ministry of Nature Protection of Turkmenistan and the UN Development Program together with the national experts developed the Draft National Program for the Natural Environment Protection in Turkmenistan (NPNEP). A plan of actions necessary to implement the National Program was signed between Turkmenistan and the UNEP. It includes eight pilot projects, which outline priority tasks for 1998-2000 connected with a reform of the environmental policy and institutional relations. The National Report on Natural Environment Protection in Turkmenistan for 1998 is the first publication in this series. It clarifies major issues of the natural conservation and lists concrete ways of their resolution. This report describes the major directions of the environmental policy pursued by the state that, to a great extent, ensure development of harmonious relationships between humans and nature. In this context the report pays a great attention to protection, conservation and restoration of the major components of the ecosystems.
Conclusions and recommendations of this report follow from the general principles securing profitability and efficiency of natural resource development with the emphasis on protection of the people's health and biosphere in general.
The general priorities outlined in this report are in harmony with the specific tasks envisaged in the Program "A Decade of Stability" of the Turkmen President S. Niyazov. The presented report is prepared by the specialists of the Ministry of Nature Protection of Turkmenistan, with the active participation of the experts from other ministries, departments, research and educational institutions.
This Report represents a solid contribution toward shaping the national policy on the sustainable development in Turkmenistan, and it outlines the natural conservation tasks that are to be resolved at the present time. The soldiers in army usually perform duties like: reforestation, plantation of new trees etc.
Sources: personal experience, www.grida.no
26. National Army: 1.2
Force Structure of the 108,000 uniformed soldiers and officers and 300 units of the former Soviet armed forces that were in Turkmenistan in April 1992, nearly 50,000 personnel and thirty units were withdrawn or disbanded within the following year. By 1993 the republic's armed forces comprised around 34,000 active-duty personnel attached primarily to the army and air force. At that point, the reduced force operated 200 military units while seventy remained under Russian control. Turned over to Turkmenistan's command were one army corps directorate, two combined arms units stationed at Gushgy and Gyzylarbat, several air defense and air force aviation units, technical support and logistical units, and virtually all the armaments and other military property. The armed forces are divided into four branches: the army, air force, and border guards. The government has announced plans to establish a naval force on the Caspian Sea. Army
MILITARY: 25,000 (joint CIS) (1995) total active duty personnel with 100% army while military expenditure accounts for 1.5% (1993) of the Gross National Product (GNP).
Sources: www.country-data.com
27. Foreign Trade impact: 2.7 With a third successive year of around 20% rates of growth, GDP in 2001 recovered to above pre-independence levels. Economic prospects, however, remain strongly linked to export earnings from natural gas, oil, and cotton. While industrial and agricultural diversification policies have had some success, policy distortions in the foreign exchange regime discourage private sector growth and inflows of FDI.
According to statistics export decreased from 93 to 6 % from 1999 to 2003 respectively. At the same time imports decreased as well from 30 to 15% from 1999 to 2003 respectively.
With GDP growth in 2001 officially reported at 20.5%, the economy registered the third year in a row of around 20% expansion. Turkmenistan has benefited from positive developments in external circumstances, which, to a large extent, deter- mine the economic performance and prospects of its export-dependent economy. The continued economic upturn in the Russian Federation and the Ukraine, which together absorbed 88% of total natural gas exports, and in other Commonwealth of Independent States (CIS) economies sustained export demand. Natural gas exports rose because of fuller capacity utilization of a new pipeline to Iran and a larger off take by the Ukraine and other CIS importers via the Russian Federation. Nearly 7 billion cubic meters (bcm) of gas were exported in 2001 through the pipeline. Natural gas production increased to 51.3 bcm, a rise of 9% over the 2000 level. Of this, 37.3 bcm were exported, 11% more than in the previous year. Oil production also rose, by 12%. The value of industrial output, which consists mainly of oil and gas production, registered an impressive growth rate of 27%. However, transport bottlenecks continued to impose a binding constraint on further expansion of energy product exports.
Sources: www.unece.org.
28. Protection of foreign currency: 2.9
RESOLUTION OF THE PRESIDENT OF TURKMENISTAN #2 1603 ON THE GUARANTEES OF PROTECTION OF FOREIGN INVESTMENT AND CAPITAL
With the aim of protection of the interests and legal rights of foreign investors in Turkmenistan and to secure the guarantees of foreign investments and capitals, I decree:
1. To establish that foreign investments, the property and the capitals of foreign investors in Turkmenistan are under the state protection. The state government bodies are prohibited to impose any limitations for the right of usage of the property and the capitals of investors, except the cases of committing by the investors illegal actions, specified in the Law.
2. To guarantee to the investors and foreign workers the right of free transfer outside Turkmenistan belonging to them capital and property in the order, determined by Turkmenistan's legislation on currency regulation. To establish that the foreign investors' deposits in the banks of Turkmenistan, shares, belonging to them, securities and other payment means can not be the object of restriction of the Central and Commercial banks of Turkmenistan.
3. The Central and Commercial banks of Turkmenistan are to secure the right of foreign investors to keep current and pay accounts in the banks in national currency of Turkmenistan and in currency of other states. To insure free access of foreign investors and the holders of means in banks to the inner currency market of Turkmenistan to acquire the currency of Turkmenistan and foreign currency in accordance with the legislation on currency regulation.
4. The Central bank of Turkmenistan is to provide out of turn right to transfer means in manats, acquired by foreign investors for the hard currency, into the currency of other states and to transfer it abroad.
5. To guarantee to the foreign investors the urgent right to use means in manats earned from the sale of production and services in Turkmenistan, for the purchase of goods and production including cotton fabric, oil products, yarn, wool, carpets and carpet articles with providing the right for their export without license.
6. To allow the Central bank of Turkmenistan to be a guarantee of safety of foreign investors' means, deposited in the banks of Turkmenistan, with the exception of the losses of currency and commercial risk by the owners of the means.
7. The Central bank and the Commercial banks of Turkmenistan are to provide a strict observance of the legislation on the protection of the investments' secrecy. To institute criminal proceedings against the guilty of divulgence of the investments' secrecy of private persons, enterprises and organizations of non-state sector of economy, foreign firms, companies, share societies and organizations.
8. To make the Ministry of Justice of Turkmenistan and the Central bank of Turkmenistan responsible for the fulfillment of the present resolution.
Sources: www.tax.gov.tm.
29. Management of foreign currency budget: 4.9
Major exports: gas, crude and refined oil, textiles - 3.7 bill. Major imports: foodstuffs, machinery and equipment - $3.2 bill.
Major export trading partners: Ukraine 39.2 %, Italy 18.1 %, Iran 14.7 %, Turkey 6.5 %.
Major import trading partners: Russian 21.5 %, Turkey 9.4 %, United Arab Emirates 7.5 %, China 4.2 %.
Sources: www. heritage.org
30. Layers of collective action: 1.0
Republic; authoritarian presidential rule, with little power outside the executive branch
The president has limitless power. If he decides that someone is not appropriate for his position, president could easily fire anyone. Under the 1992 constitution, there are two parliamentary bodies, a unicameral People's Council or Halk Maslahaty (supreme legislative body of up to 2,500 delegates, some of whom are elected by popular vote and some of whom are appointed; meets at least yearly) and a unicameral Parliament or Mejlis (50 seats; members are elected by popular vote to serve five-year terms); membership is scheduled to be increased to 65 seats elections: People's Council - last held in April 2003 (next to be held December 2008); Mejlis - last held 19 December 2004 (next to be held December 2008)
election results: Mejlis - DPT 100%; seats by party - DPT 50; note - all 50 elected officials are members of the Democratic Party of Turkmenistan and are preapproved by President NIYAZOV
note: in late 2003, a new law was adopted, reducing the powers of the Mejlis and making the Halk Maslahaty the supreme legislative organ; the Halk Maslahaty can now legally dissolve the Mejlis, and the president is now able to participate in the Mejlis as its supreme leader; the Mejlis can no longer adopt or amend the constitution, or announce referendums or its elections; since the president is both the "Chairman for Life" of the Halk Maslahaty and the supreme leader of the Mejlis, the 2003 law has the effect of making him the sole authority of both the executive and legislative branches of government
Judicial branch:
Democratic Party of Turkmenistan or DPT [Saparmurat NIYAZOV] note: formal opposition parties are outlawed; unofficial, small opposition movements exist underground or in foreign countries; the two most prominent opposition groups-in-exile have been National Democratic Movement of Turkmenistan (NDMT) and the United Democratic Party of Turkmenistan (UDPT); NDMT was led by former Foreign Minister Boris SHIKHMURADOV until his arrest and imprisonment in the wake of the 25 November 2002 assassination attempt on President NIYAZOV; UDPT is led by former Foreign Minister Abdy KULIEV and is based out of Moscow.
Sources: www.cia.gov
31. Social acceptance: 3.8
Socially foreigners are accepted and actually welcome. Since the economy is not really strong and there is no domestic high paying jobs, most of the people try to seek a job in foreign company. Foreign companies provide better pay and better treatment of its workers.There is some discrimination (jealousy) as in every country, but overall acceptance is normal.
Sources: personal experience.
32. Government enterprise: 2.8
The Government of Turkmenistan has adopted a cautious approach towards the transition to a market economy, reflecting a need for stability and maintenance of economic output, avoidance of mistakes made by other CIS republics and the difficulty privatizing large monolithic enterprises. In January 1994 Halk Maslahaty (parliament) adopted a presidential economic program. This again emphasizes the fact that the economy is open to foreign investors and that the transition towards a market economy and privatization are key components of the overall program. The program sets out targets for each of main sectors of the economy. Government policy is to become self sufficient in food and to be able to process all indigenously processed foodstuffs.
According to the economist Intelligence unit, " The courts and the institutions that implement the law.. cannot be trusted to enforce contract rights dispassionately. Turkmenistan's legal system, particularly corporate law, is poorly developed and.. poorly enforced... The judiciary is badly trained and open to bribery. The provision in the constitution for the private ownership of land has yet to be implemented in practice."
Sources: www.fao.org
33. International security agreements: 4.6
The Turkmen foreign policy was formally born at the 1992 Conference on Security and Cooperation in Europe Summit (now known as OSCE - Organization for Security and Cooperation in Europe) in Helsinki. At the summit Turkmen President S. Niyazov for the first time declared positive neutrality as a principle direction of the foreign policy of a new independent Turkmen state. The principle of neutrality includes the following: respect of sovereignty and territorial integrity of other nations, non-interference in their internal affairs, non-use of force in interstate relations, priority of UN decisions in international relations, establishing and strengthening cooperation with all nations and, above all, with regional nations. Although President S.Niyazov's statement was positively accepted by the world community, it was, nevertheless, considered just a political declaration at that time. Turkmenistan had strictly followed the principle of positive neutrality for three years before Turkmenistan's neutrality was officially endorsed by the United Nations in December 1995. It gave Turkmenistan a legal and moral right to offer itself as a place for settling regional conflicts.
In Turkmenistan, President Saparmurat Niyazov agreed to begin negotiations toward a military transit agreement for NATO forces bound for Afghanistan, albeit taking into account Turkmenistan's status of permanent neutrality. "Our region is a very complicated one, with such countries as Afghanistan and Iran. Conflicts may break out, and NATO's role is to prevent them. We are not and have never been worried by NATO's enlargement," Niyazov declared. Turkmenistan has been providing transit passage for U.S. and allied humanitarian relief cargos to Afghanistan since late 2001. It has also been delivering electricity and liquefied natural gas, and the government expects to increase such deliveries. De Hoop Scheffer commended Turkmenistan's contribution to maintaining stability in northern Afghanistan (Turkmen government website, Turkmen Television, October 20, 21).
Sources: www.jamestown.org
34. Protection of domestic enterprises: 2.6
Turkmenistan is a relatively small country with approximately five million people and abundant hydrocarbon resources. The government claims it wants to attract foreign investment. However, the government's actions are inconsistent with those statements and the foreign investment climate remains poor. The government selectively chooses its investment partners. In order to function in this peculiar commercial environment a strong relationship With the government is essential. After an armed attack on President Niyazov's motorcade on November 25, 2002, (see paragraph 37 political violence) further limited the Ability of foreigners, including potential investors, to Enter the country. The most promising areas for investment Are in the oil and gas sector and on projects that president Niyazov has specifically endorsed. Even in those two areas, Companies will need to conduct extensive due diligence and Should expect a difficult process. The government's Reliance on state control undercuts its desire for foreign Investment. According to official statistics, the Government accounted for 53 percent of all economic activity In Turkmenistan in 2003; according to independent estimates (transition report 2004), the government accounts for 75 percent of the country's economic activity. A very restrictive currency exchange system is a major investment Inhibitor. Finally, the lack of established rule of law, Excessive and inconsistent regulation, and unfamiliarity with business practices are disincentives to investment.
Sources: www.turkmenistan.usembassy.gov
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