Economy Of Turkmenistan

The economy of Turkmenistan has been navigating a recovery phase following the significant downturn experienced in 2014, which was precipitated by a sharp decline in global hydrocarbon prices. This downturn marked the onset of the country’s worst economic crisis since the immediate post-independence period, severely affecting its growth trajectory and economic stability. Several interrelated factors contributed to this prolonged economic malaise, including persistently low natural gas prices, which undermined the revenues of Turkmenistan’s energy sector—a cornerstone of its economy. Compounding these challenges was the suspension of natural gas exports to Russia from 2016 to 2019, a critical market that had historically absorbed a substantial portion of Turkmenistan’s gas output. This disruption not only reduced export earnings but also forced the country to seek alternative markets and routes for its energy resources. Additionally, poor agricultural harvests during this period further strained the economy by diminishing domestic food supplies and export potential, thereby exacerbating the overall economic difficulties faced by the nation. On 11 March 2021, former President Gurbanguly Berdimuhamedow publicly expressed dissatisfaction with the pace of economic growth during a session of the Cabinet of Ministers. His remarks underscored concerns that the gross domestic product (GDP) growth rate was not meeting expectations, reflecting broader apprehensions about the country’s economic performance amid ongoing challenges. During this session, he indicated that the year 2021 would be “as difficult” as 2020, highlighting the persistence of economic headwinds and the need for cautious fiscal management. These comments were made in the context of discussions surrounding the government budget, signaling a recognition at the highest levels of government that economic recovery efforts faced significant obstacles. The president’s critique illustrated the urgency with which the government sought to address structural issues and stimulate growth despite the adverse external and internal conditions. According to the 2020 Investment Climate Statement issued by the United States Department of State, Turkmenistan’s economy remains heavily reliant on the production and export of natural gas, oil, and petrochemicals. These sectors constitute the backbone of the country’s export earnings and government revenues, underscoring the economy’s vulnerability to fluctuations in global energy markets. In addition to hydrocarbons, the economy also depends, to a lesser extent, on agricultural products such as cotton, wheat, and textiles. Cotton production, in particular, plays a significant role in the agricultural sector, both as an export commodity and as a source of employment. Wheat cultivation primarily serves domestic consumption needs, helping to ensure food security within the country. The textile industry, while smaller in scale, contributes to value addition within the agricultural supply chain. This diversified yet hydrocarbon-centric economic structure reflects Turkmenistan’s ongoing efforts to balance its resource wealth with broader economic development objectives. The severe recession that Turkmenistan experienced was triggered by the collapse of global energy prices in late 2014, which had a profound impact on the country’s energy-dependent economy. As a major exporter of natural gas and oil, Turkmenistan’s fiscal stability and foreign exchange earnings were closely tied to energy market conditions. The precipitous drop in prices led to a sharp decline in export revenues, constraining government budgets and limiting the capacity for public investment and social spending. This recession was characterized by reduced economic activity, inflationary pressures, and challenges in maintaining currency stability. The government’s efforts to mitigate these effects included seeking new export markets, adjusting fiscal policies, and attempting to stimulate non-hydrocarbon sectors. Despite these measures, the economy’s heavy dependence on energy exports meant that recovery was slow and contingent upon improvements in global commodity prices. The current investment climate in Turkmenistan is considered high risk for United States foreign direct investment (FDI), reflecting ongoing concerns about economic stability, transparency, and the regulatory environment. Investors face challenges related to legal uncertainties, bureaucratic hurdles, and a lack of clear institutional frameworks that can protect property rights and enforce contracts effectively. The government’s control over key sectors and the limited openness to foreign participation further complicate the investment landscape. These factors contribute to a cautious approach among international investors, particularly those from the United States, who weigh the potential returns against the risks posed by political and economic factors. Consequently, while Turkmenistan’s resource wealth offers attractive opportunities, the investment climate remains a significant barrier to the inflow of substantial foreign capital. Geographically, Turkmenistan is predominantly characterized by vast desert landscapes, including the expansive Karakum Desert, which covers much of the country’s territory. Despite these arid conditions, intensive agricultural activities are concentrated in irrigated areas where water resources from rivers and reservoirs enable the cultivation of crops. These irrigated zones are vital for sustaining agricultural output and supporting rural livelihoods. The major crops cultivated in these areas include cotton and wheat, both of which hold strategic importance for the country’s economy and food security. Irrigation infrastructure and water management practices are critical to maintaining agricultural productivity in this challenging environment, as natural precipitation is insufficient to support large-scale farming. The concentration of agriculture in these fertile pockets reflects the adaptation of farming practices to the country’s harsh climatic and geographic conditions. As of 2020, Turkmenistan ranks fourth globally in terms of natural gas reserves, underscoring its significant position within the global energy sector. This ranking places the country among the world’s leading holders of natural gas resources, providing a substantial foundation for its energy exports and economic development. The vast reserves are primarily located in large gas fields such as Galkynysh, which is one of the world’s largest gas fields and a critical asset for Turkmenistan’s energy strategy. The abundance of natural gas resources has shaped the country’s economic policies, export relationships, and infrastructure investments, with a focus on maximizing the value derived from these reserves. This strategic endowment also influences regional geopolitics and Turkmenistan’s role as an energy supplier to neighboring countries and beyond. The two largest agricultural crops in Turkmenistan are cotton and wheat, each serving distinct economic and social functions. Cotton is primarily produced for export purposes, forming a significant component of the country’s agricultural export portfolio and generating foreign exchange earnings. The cultivation of cotton involves extensive use of irrigated land and labor, and it remains a key sector for rural employment and industrial processing. In contrast, wheat production is mainly oriented towards domestic consumption, playing a crucial role in ensuring food security and meeting the nutritional needs of the population. Wheat farming benefits from the same irrigated agricultural zones and is supported by government policies aimed at achieving self-sufficiency in staple foods. Together, cotton and wheat represent the backbone of Turkmenistan’s agricultural sector, balancing export ambitions with domestic food requirements. Turkmenistan is recognized as one of the top ten cotton producers worldwide, highlighting the crop’s importance within its agricultural economy. This status reflects the country’s long-standing tradition of cotton cultivation, which dates back to the Soviet era when Turkmenistan was integrated into the broader Central Asian cotton production system. The prominence of cotton production has influenced land use patterns, labor allocation, and the development of related industries such as textile manufacturing. Despite challenges such as water scarcity and fluctuating global cotton prices, Turkmenistan has maintained its position as a major player in the international cotton market. The government continues to prioritize cotton production as a strategic sector, investing in agricultural inputs, infrastructure, and export promotion to sustain and enhance its competitiveness globally.

Between 1998 and 2005, Turkmenistan confronted substantial economic challenges primarily stemming from its limited access to adequate export routes for natural gas, which constituted the backbone of its economy. The country’s geographic and infrastructural constraints hindered its ability to efficiently transport and sell its vast gas reserves on the international market, thereby restricting revenue generation. Concurrently, Turkmenistan grappled with significant obligations related to extensive short-term external debt, placing additional fiscal strain on the government’s capacity to manage its economy effectively. These financial pressures were exacerbated by the absence of diversified export channels, which left the nation vulnerable to fluctuations in global energy markets and limited its leverage in negotiating favorable terms with foreign partners. Despite these impediments, Turkmenistan’s total exports experienced a notable upward trajectory between 2003 and 2008, increasing at an average annual rate of approximately 15 percent. This growth was largely attributable to rising international prices for oil and natural gas, which bolstered export revenues even as physical export volumes faced logistical constraints. The surge in commodity prices during this period provided a vital economic lifeline, enabling the government to accumulate foreign currency reserves and invest in infrastructure projects, albeit within the constraints imposed by the country’s rigid economic structure. This period of export expansion underscored the country’s dependence on hydrocarbon exports and highlighted the critical role that global energy markets played in shaping Turkmenistan’s economic fortunes. Throughout this era, Turkmenistan’s economic system retained many features characteristic of the Soviet period, with central planning mechanisms and strong state control remaining dominant. The government maintained tight oversight over production, distribution, and pricing decisions, limiting the scope for private enterprise and market-driven economic activity. This centralized approach reflected both institutional inertia and political preferences, as the leadership sought to preserve control over key sectors of the economy, particularly the lucrative energy industry. The persistence of Soviet-style economic management hindered the development of a competitive private sector and constrained the country’s ability to adapt to changing global economic conditions. Under the leadership of President Saparmurat Niyazov, who held power from Turkmenistan’s independence in 1991 until his death in 2006, the government consistently rejected initiatives aimed at implementing market-oriented reforms. Niyazov’s administration prioritized political stability and regime consolidation over economic liberalization, viewing market reforms as potentially destabilizing. As a result, efforts to introduce elements such as privatization, deregulation, or the establishment of a functioning banking sector were largely absent or superficial. The government’s reluctance to embrace market reforms contributed to the continuation of an inefficient economic model that relied heavily on state planning and control, limiting opportunities for innovation and private sector growth. From the early 1990s until 2019, the Turkmen state maintained extensive subsidies across a wide range of commodities and services, reflecting a policy aimed at ensuring social stability and supporting the population’s basic needs. These subsidies encompassed essentials such as energy, foodstuffs, and utilities, effectively keeping prices artificially low and insulating consumers from market fluctuations. While this approach provided short-term relief and helped maintain public support for the regime, it also imposed significant fiscal burdens on the government and distorted economic incentives. The continuation of widespread subsidies over nearly three decades underscored the state’s commitment to a paternalistic economic model, which prioritized social welfare through direct government intervention rather than market mechanisms. Following his election in 2007, President Gurbanguly Berdimuhamedow initiated a series of economic reforms aimed at addressing some of the structural inefficiencies inherited from his predecessor’s administration. One of the key measures undertaken was the unification of the country’s previously dual currency exchange rate system, which had created distortions and impeded transparent economic transactions. By consolidating the exchange rates, the government sought to enhance the functioning of the currency market and improve the accuracy of economic indicators. This reform marked a cautious step toward modernizing the financial sector and aligning Turkmenistan’s economy more closely with international standards. Under Berdimuhamedow’s administration, further economic adjustments included the redenomination of the national currency, the manat, which aimed to simplify financial transactions and restore confidence in the currency. Additionally, the government began reducing state subsidies for gasoline, reflecting a gradual shift away from the extensive subsidy regime that had characterized previous decades. This policy change was intended to alleviate fiscal pressures and encourage more efficient energy consumption. Concurrently, the administration launched development initiatives for a special tourism zone named Awaza, situated on the Caspian Sea coast. The Awaza project represented an effort to diversify the economy by promoting tourism and attracting foreign investment, signaling a recognition of the need to expand beyond the hydrocarbon sector. Since 2009, Turkmenistan has maintained a fixed official exchange rate for the manat, establishing a rate of US$1 to 2.85 manats. This fixed exchange rate regime was designed to provide stability and predictability for international trade and investment, reflecting the government’s preference for controlling currency fluctuations. However, the official rate often diverged significantly from market realities, as restrictions on currency convertibility and limited foreign exchange availability created conditions for unofficial trading. On 1 January 2015, the government adjusted the official exchange rate to US$1 equaling 3.50 manats, a move that reflected changing economic circumstances and the need to recalibrate the currency’s valuation in line with external pressures. Despite the official fixed exchange rates, a substantial black-market for foreign currency developed, with exchange rates diverging markedly from the government’s official figures. As of February 2021, the black-market exchange rate fluctuated around 29 to 30 manats per US dollar, indicating significant depreciation of the manat in unofficial trading venues. This divergence highlighted the underlying economic challenges, including limited access to foreign currency, inflationary pressures, and the lack of confidence in the official exchange rate regime. By mid-April 2021, the black-market rate had further depreciated, sliding to approximately 40 manats per US dollar, underscoring ongoing currency instability and the persistent gap between official policy and market realities. This situation reflected broader issues within Turkmenistan’s economic management, including the difficulties of maintaining a fixed exchange rate in the face of external shocks and internal economic imbalances.

The government budget of Turkmenistan is formulated and executed in strict accordance with the Law “On Budget System,” which serves as the fundamental legal framework for the organization, management, and operation of the country’s budgetary system. This legislation delineates the principles and procedures governing the preparation, approval, and implementation of budgets across all levels of administrative divisions, thereby regulating the fiscal interrelations between the national, regional, and local budgets. The law ensures a structured approach to fiscal governance, aiming to maintain coherence and coordination within the public financial management system. It establishes clear guidelines for budget planning, execution, and reporting, while also defining the responsibilities of various governmental bodies involved in the budgetary process. The process of budget preparation begins with the government drafting the state budget, which is subject to internal discussions and revisions before being formally submitted to the President of Turkmenistan for approval. This step reflects the centralized nature of fiscal decision-making in the country, where the executive branch plays a pivotal role in shaping the financial priorities and allocations for the upcoming fiscal period. Following presidential approval, the budget draft is then forwarded to the Assembly of Turkmenistan, known as the Mejlis, for further consideration and ratification. This submission occurs at least one month prior to the commencement of the fiscal year, allowing sufficient time for legislative review and debate. The Mejlis holds the authority to adopt the budget, thereby providing a formal legislative endorsement that legitimizes the government’s fiscal plans and expenditure frameworks. The Ministry of Economy and Finance holds primary responsibility for the management of state finances in Turkmenistan. This ministry oversees the formulation of fiscal policy, budget execution, and financial control, ensuring that government resources are allocated and utilized in accordance with approved plans. It coordinates the collection of revenues, manages public expenditures, and monitors compliance with budgetary regulations. The ministry also plays a critical role in economic forecasting and financial planning, providing the government with essential data and analysis needed to make informed policy decisions. Its functions extend to supervising the financial activities of various state institutions and enterprises, thereby maintaining oversight of the country’s overall fiscal health. Despite the formal structures in place, budget statistics in Turkmenistan are widely regarded as unreliable by external observers and analysts. This skepticism primarily stems from the government’s extensive use of extra-budgetary funds, which are not transparently reported or fully integrated into official budget accounts. These off-budget resources, which may include revenues from state-owned enterprises, special funds, and other financial mechanisms, complicate the accurate assessment of the country’s fiscal position. The lack of transparency surrounding these funds undermines confidence in the official budget figures and hampers efforts to evaluate the true scale of government revenues and expenditures. Consequently, the fiscal data published by the government often do not provide a comprehensive picture of the state’s financial operations, limiting the ability of analysts to conduct thorough economic assessments. In terms of concrete fiscal figures, the government budget revenue for the year 2021 amounted to 79.5 billion manats. This represented a decline compared to previous years, with revenues recorded at 84.39 billion manats in 2020 and a significantly higher 103.57 billion manats in 2017. The downward trend in budget revenues over this period reflects various economic challenges, including fluctuations in global commodity prices, domestic economic conditions, and possibly the impact of the COVID-19 pandemic. The decrease in revenue also underscores the volatility and vulnerability of Turkmenistan’s fiscal base, which is heavily reliant on hydrocarbon exports and other state-controlled sectors. Despite the reduction in revenues, the expenditure budget for 2021 was set at 72.1 billion manats, indicating a continued commitment to public spending and investment in various sectors of the economy. According to state media reports from November 2023, the budget for the year 2022 showed a marked increase in both revenue and expenditure compared to 2021. The total revenue for 2022 was reported at 124.299 billion manats, while expenditures were recorded at 117.601 billion manats. This substantial rise in fiscal figures suggests a recovery or expansion in government financial activities, possibly driven by improved economic conditions or increased state revenues from natural resources and other sources. The reported surplus, with revenues exceeding expenditures by approximately 6.7 billion manats, indicates a positive fiscal balance for that year. However, given the concerns about the reliability and transparency of budget data, these figures should be interpreted with caution and considered within the broader context of Turkmenistan’s opaque fiscal environment. The Central Bank of Turkmenistan exercises control over the issuance of the national currency and the overall money supply, playing a central role in the country’s monetary policy. Despite this critical function, the Central Bank does not publicly disclose detailed data regarding the money supply, limiting external analysis of monetary conditions and financial stability. The lack of transparency in monetary statistics hinders the ability of economists and international institutions to assess inflationary pressures, liquidity conditions, and the effectiveness of monetary policy measures. Nonetheless, the Central Bank has actively promoted the adoption of cashless transactions as part of efforts to modernize the financial system and improve payment infrastructure. Between January and April 2020, the volume of cashless transactions conducted using debit cards more than tripled compared to the same period in 2019, reaching just under 1.9 billion manats. This rapid growth in electronic payments reflects a significant shift in consumer behavior and payment practices, driven by government initiatives to encourage digital financial services. The increase in cashless transactions aligns with broader global trends toward electronic payments and financial inclusion. It also suggests an expanding network of banking services and payment terminals, facilitating greater access to non-cash payment methods for individuals and businesses across Turkmenistan. However, the transition from cash-based payments to electronic transactions encountered several challenges. One notable issue was the shortage of cash in automatic teller machines (ATMs), which caused inconvenience for consumers who still relied on cash for everyday transactions. Additionally, the availability of card payment facilities at points of sale remained insufficient, limiting the widespread adoption of electronic payments in retail and service sectors. These infrastructural and logistical constraints slowed the pace of the cashless transition and highlighted the need for further investment in payment technology and financial infrastructure. Despite these hurdles, the government’s push toward digital payments represents a strategic effort to enhance the efficiency, transparency, and security of the national payment system. At least one non-governmental organization has publicly characterized the economy of Turkmenistan as a kleptocracy, a term used to describe a system where those in power exploit national resources and wealth for personal gain at the expense of the public good. This characterization reflects concerns about widespread corruption, lack of transparency, and the concentration of economic control within a narrow elite. Such critiques emphasize the challenges faced by Turkmenistan in establishing accountable governance and effective economic management. The kleptocratic nature of the economy has implications for fiscal policy, as it may influence the allocation of resources, the integrity of budgetary processes, and the overall development trajectory of the country. These assessments contribute to the broader discourse on governance and economic reform in Turkmenistan, highlighting the need for increased transparency and institutional strengthening.

Following the dissolution of the Soviet Union, Turkmenistan’s industrial sector underwent significant structural changes, with a marked shift toward the dominance of fuel extraction and cotton processing industries. This reorientation reflected the country’s abundant natural gas reserves and its longstanding agricultural tradition centered on cotton cultivation. However, the prioritization of these heavy industries came at the expense of the development of light industry, which encompasses the production of consumer goods and textiles unrelated to cotton processing. The emphasis on fuel and cotton processing not only concentrated economic resources and investment into these sectors but also limited diversification within the industrial landscape, thereby constraining the growth of manufacturing industries that could have broadened the industrial base and enhanced employment opportunities in other areas. Between 1991 and 2004, Turkmenistan made substantial efforts to expand its cotton-processing capabilities, a move that was closely tied to the government’s strategic emphasis on maximizing the value-added potential of domestically produced raw cotton. During this period, approximately 14 new cotton-processing plants were established across the country, representing a significant increase in the nation’s capacity to process cotton fiber into yarn, textiles, and other finished products. These facilities were designed to reduce reliance on exporting raw cotton and to foster the development of a more integrated textile industry within Turkmenistan. The expansion of cotton-processing infrastructure was supported by state investments and reflected a broader policy aimed at enhancing self-sufficiency and boosting export revenues through the production of higher-value goods. Despite these advances, the cotton-processing sector remained closely linked to the agricultural cycle and faced challenges related to modernization and market competitiveness. The construction industry in Turkmenistan has been characterized by a predominant reliance on government-led building projects, which have historically shaped the urban and infrastructural landscape of the country. Public sector initiatives have driven the construction of large-scale projects such as government offices, cultural institutions, educational facilities, and public housing complexes, reflecting the state’s central role in economic planning and development. In contrast, the construction of private housing has been accorded relatively low priority, with limited market-driven residential development and minimal encouragement for private investment in this sector. This approach has resulted in a construction industry that is heavily dependent on state funding and directives, often focusing on symbolic or strategically significant projects rather than meeting the broader demand for private residential accommodation. Consequently, the construction sector’s growth has been closely tied to government policy and budgetary allocations, limiting its responsiveness to market dynamics and private sector participation.

Turkmenistan possesses vast natural gas reserves estimated at approximately 50 trillion cubic meters, positioning the country as one of the world’s major holders of natural gas resources. The discovery of significant gas deposits in Turkmenistan dates back to the 1940s and 1950s, primarily in the central and eastern regions of the republic. By the 1980s, Turkmenistan had emerged as the second largest gas producer within the Soviet Union, surpassed only by the Russian Soviet Federative Socialist Republic (SFSR). This rapid development was driven by extensive exploration and exploitation efforts during the Soviet era, which significantly expanded the republic’s production capacity. Throughout the Soviet period, Turkmenistan’s natural gas exports were predominantly directed toward other Soviet republics, forming an integral part of the centrally planned energy distribution system. Export volumes grew substantially over several decades, beginning with approximately 9.2 million cubic meters in 1940. By 1960, exports had increased to around 234 million cubic meters, and by 1975, they had surged to approximately 51 billion cubic meters. Despite these impressive export figures, the revenues generated from gas sales were centrally controlled by the Soviet government. Consequently, most of the income derived from Turkmenistan’s gas exports was absorbed into the Soviet central budget, with limited financial benefits retained by the Turkmen SSR itself. Following the dissolution of the Soviet Union in 1991, Turkmenistan gained full sovereignty over its natural gas resources, including control over exports and revenues. However, the existing infrastructure, primarily composed of Soviet-era pipelines, necessitated that much of the gas continue to be delivered to markets in the Caucasus, Russia, and Ukraine. This dependency on legacy transit routes presented both opportunities and challenges for the newly independent state. During the 1990s, Turkmenistan encountered significant difficulties with payment from many Commonwealth of Independent States (CIS) customers. Numerous buyers delayed payments or resorted to barter arrangements, which undermined Turkmenistan’s ability to generate stable export revenues. As a result, Turkmenistan halted gas deliveries to some CIS countries in the mid-1990s, citing the unprofitability of continuing exports under such conditions. In response to these challenges, the Turkmen government actively sought to diversify its export routes beyond the traditional Soviet pipeline network. Proposals were made to construct pipelines through Iran to Turkey and via Afghanistan to Pakistan and Western Europe, aiming to open new markets and reduce dependence on Russian-controlled transit corridors. However, these ambitious projects ultimately failed to materialize due to a combination of regional security concerns, particularly in Afghanistan, and the high financial costs associated with pipeline construction. The failure to diversify export routes contributed to economic difficulties within Turkmenistan, including rising inflation and budget deficits. Despite these pressures, the government resisted widespread privatization of the energy sector, maintaining state control over natural gas production and exports. By the late 1990s, Turkmenistan renegotiated export contracts and pricing arrangements with Russia’s Gazprom, leading to the resumption of gas deliveries to countries such as Georgia and Ukraine. During this period, Turkmenistan also inaugurated its first pipeline that bypassed Russian territory—the Korpezhe-Kurt Kui Pipeline—marking a strategic effort to reduce reliance on Russian transit routes. This pipeline connected Turkmen gas fields directly with Iran, providing an alternative export corridor and enhancing Turkmenistan’s bargaining position in regional energy markets. A significant milestone in Turkmenistan’s natural gas export strategy occurred on 14 December 2009, with the inauguration of the Central Asia–China gas pipeline. This pipeline enabled Turkmenistan to supply large volumes of natural gas directly to the China National Petroleum Corporation (CNPC), marking the beginning of a major new export relationship. The pipeline system comprises three lines—Lines A, B, and C—with a combined design capacity of 55 billion cubic meters per annum (bcma). Initially, Turkmenistan’s quota on this pipeline was set at 35 bcma, reflecting its substantial contribution to the supply. Over time, Turkmenistan’s share of the pipeline’s capacity increased, and by 2023, the Turkmenistan Ministry of Foreign Affairs reported that the country’s quota had risen to 40 bcma, underscoring the growing importance of China as a key gas export market. By 2015, Turkmenistan was delivering approximately 35 bcma of natural gas to China, effectively offsetting a decline in exports to Russia. Russian imports of Turkmen gas had progressively decreased from about 10 bcma to 5 bcma before ceasing entirely on 1 January 2016. This cessation followed years of strained relations and pricing disputes between Turkmenistan and Russia. Nonetheless, Russian purchases of Turkmen gas resumed in smaller quantities in 2019, indicating a partial restoration of trade ties. Meanwhile, Turkmenistan’s gas exports to Iran, which had been relatively modest at an estimated 12 bcma, were halted on 1 January 2017 due to payment arrears. Ashgabat claimed that Tehran owed approximately $1.8 billion for gas supplies delivered nearly a decade earlier, leading to a suspension of deliveries and further complicating Turkmenistan’s export dynamics. In March 2025, Turkmenistan initiated natural gas sales to Turkey through a swap arrangement involving the Turkmenistan-Iran and Iran-Turkey pipelines. This swap mechanism allowed Turkmen gas to reach Turkish markets indirectly, circumventing some geopolitical and infrastructural challenges. The arrangement targeted shipments of 1.3 billion cubic meters by the end of that year, representing a strategic step toward diversifying export destinations and enhancing regional energy cooperation. Data from the early 2020s reflect Turkmenistan’s substantial natural gas production and export activities. Between January and November 2020, Turkmenistan extracted 62.3 billion cubic meters of natural gas, exporting approximately 31 billion cubic meters according to one source. Official state-controlled media reported that natural gas production for the calendar year 2023 reached 80.6187 billion cubic meters, indicating continued growth in output. However, production and exports experienced notable fluctuations over the preceding decades. Both peaked in 2008 but declined sharply in 2009 due to an explosion in the Central Asia–Center gas pipeline system in April 2009. Turkmenistan attributed the incident to Gazprom, which led to significant disruptions in gas transit and export volumes. Turkmenistan’s natural gas exports currently include pipeline deliveries directly to China and Russia, exports to Azerbaijan facilitated through swap agreements with Iran, and shipments of liquefied petroleum gas transported by rail and truck to Afghanistan. These diverse export channels reflect Turkmenistan’s efforts to navigate complex regional geopolitics and infrastructure constraints. The Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas pipeline project represents a major initiative aimed at further diversifying export routes. The completion of the Turkmen section of the TAPI pipeline marked a significant milestone, symbolizing Turkmenistan’s commitment to expanding its export infrastructure and accessing new markets in South Asia. Statistical data from the BP Statistical Review illustrates trends in Turkmenistan’s natural gas production and consumption over recent years. Production rose from 57.0 bcma in 2005 to a peak of 66.1 bcma in 2008 before dropping sharply to 36.4 bcma in 2009, reflecting the impact of the pipeline explosion and associated disruptions. Production then gradually recovered to reach 63.2 bcma by 2019. Domestic consumption within Turkmenistan increased steadily during this period, rising from 16.1 bcma in 2005 to 31.5 bcma in 2019, indicating growing internal demand for natural gas driven by population growth and industrial development. Exports to Russia exhibited a marked decline, falling from 35.1 bcma in 2005 to 10.7 bcma in 2009 and further down to 9.9 bcma by 2013. In contrast, exports to China began in 2010 at 3.5 bcma and surged to 24.4 bcma by 2013, reflecting the rapid expansion of the Central Asia–China pipeline and increasing Chinese demand. Exports to Iran fluctuated between 4.7 and 10.2 bcma during the 2010–2013 period, highlighting the variable nature of Turkmenistan’s gas trade with its southern neighbor. In February 2022, the European Space Agency’s TROPOspheric Monitoring Instrument identified Turkmenistan as an ultra-emitter of methane, a potent greenhouse gas. The lost methane emissions from Turkmenistan’s natural gas sector were valued at approximately US$6 billion annually, underscoring the environmental and economic challenges associated with gas production and transmission in the country. This finding has drawn international attention to the need for improved methane leak detection and mitigation measures within Turkmenistan’s energy infrastructure.

On 28 June 2019, Turkmenistan commissioned a significant industrial facility in Ovadandepe, marking a major development in the country’s efforts to diversify its hydrocarbon sector by converting natural gas into liquid fuels. The factory represented a substantial investment totaling US$1.7 billion, underscoring the Turkmen government’s commitment to adding value to its abundant natural gas reserves through downstream processing. This initiative aimed to reduce reliance on raw gas exports by producing higher-value petroleum products domestically, thereby enhancing energy security and generating new revenue streams. The construction of the Ovadandepe plant was undertaken by a collaboration between the Turkish construction conglomerate Rönesans and the Japanese engineering firm Kawasaki Heavy Industries. These companies brought together their expertise in large-scale industrial projects to deliver the complex infrastructure required for gas-to-liquid conversion. The technological foundation for the facility’s operations was developed by the Danish company Haldor Topsoe, a global leader in catalysis and process technology. Haldor Topsoe’s proprietary technology enabled the efficient transformation of natural gas into gasoline and other liquid fuels, employing advanced catalytic processes designed to optimize yield and product quality. Designed with a substantial production capacity, the plant was engineered to produce 600,000 tonnes of gasoline annually. This capacity positioned the facility as one of the key contributors to Turkmenistan’s domestic fuel supply and potential export volumes. In addition to gasoline, the plant was configured to produce 12,000 tonnes of diesel fuel each year, thereby broadening the range of liquid fuels derived from natural gas and addressing multiple market segments. The inclusion of diesel production reflected strategic planning to meet both domestic transportation needs and industrial fuel demands. Furthermore, the plant was designed to generate 115,000 tonnes of liquefied petroleum gas (LPG) annually, expanding its product portfolio beyond conventional liquid fuels. LPG, a versatile fuel used for heating, cooking, and as a feedstock in petrochemical industries, represented an important product for both domestic consumption and export. The integration of LPG production within the facility’s operations demonstrated a comprehensive approach to maximizing the utility of the natural gas feedstock. The entire production process relied on an input of approximately 1.7 billion cubic meters of natural gas annually. This volume of raw material reflected the scale of the plant’s operations and the significant portion of Turkmenistan’s natural gas resources dedicated to liquid fuel production. By converting such a large quantity of gas into diversified liquid products, the facility sought to enhance the country’s energy value chain and reduce the export of unprocessed hydrocarbons. Despite the initial optimism surrounding the plant’s commissioning, opposition media reports as of January 2023 indicated that the facility had ceased production of export-grade ECO-93 gasoline. The ECO-93 grade, a high-octane fuel suitable for international markets, was a flagship product intended to position Turkmenistan as a competitive exporter of refined gasoline. The reported halt in production of this premium fuel grade suggested operational challenges that undermined the plant’s export ambitions. The cessation of export-grade gasoline production was attributed to a shortage of catalyzers essential for the conversion process. Catalyzers, or catalysts, are critical components in chemical reactions that facilitate the transformation of natural gas into liquid hydrocarbons. Their absence or degradation can lead to significant disruptions in production efficiency and product quality. The shortage implied logistical or supply chain difficulties, possibly exacerbated by economic sanctions, import restrictions, or internal management issues, which affected the plant’s ability to maintain optimal operations. Following the stoppage of ECO-93 gasoline output, the factory reportedly shifted its focus to producing only lower-quality gasoline intended for domestic consumption. This adjustment reflected a pragmatic response to the catalyzer shortage, allowing the plant to continue operating at a reduced capacity and supply the local market with fuel, albeit of a lesser standard than initially planned. The downgrade in product quality likely impacted the plant’s profitability and the broader strategy of positioning Turkmenistan as a regional exporter of refined fuels. Overall, the Ovadandepe gas-to-gasoline facility represented a landmark project in Turkmenistan’s energy sector, embodying the country’s ambitions to harness its vast natural gas reserves for value-added production. However, operational challenges, particularly related to critical inputs such as catalyzers, have constrained the plant’s ability to fully realize its export potential, leading to a reorientation towards domestic fuel supply with lower-quality products.

Turkmenistan’s principal oil-producing region is situated in the western part of the country, primarily within Balkan Province. This area forms a segment of the South Caspian Basin, an extensive intercontinental depression that is widely recognized for its rich hydrocarbon deposits and significant oil production potential. The South Caspian Basin has long been an important geological formation for oil exploration and extraction, contributing substantially to the energy resources of the region. Within Turkmenistan, the basin’s western territories have thus served as the focal point for the development of the nation’s oil industry. Commercial oil extraction activities on the Turkmen side of the Caspian Sea began in the early 20th century, particularly around the Cheleken Peninsula area. This peninsula, projecting into the Caspian Sea, became one of the earliest sites of oil production in the country. The initial phase of oil extraction was relatively modest and relied on traditional methods. However, the industry saw significant modernization in the 1930s, when more advanced drilling operations commenced near the city of Balkanabat. This period marked the beginning of systematic and mechanized oil production in Turkmenistan, laying the groundwork for subsequent expansion and development of the sector. Over the ensuing decades, several key oil fields were discovered and developed, contributing to the steady growth of Turkmenistan’s oil output. The Gumdag oil field was developed in 1949, representing one of the earliest major onshore fields to be brought into production. This was followed by the development of the Goturdepe field in 1958, which further augmented the country’s oil reserves and production capacity. In 1962, the Ekerem field was also developed, adding to the portfolio of significant oil-producing sites within the country. The 1970s witnessed the initiation of offshore drilling activities, expanding exploration and production efforts beyond onshore fields into the Caspian Sea itself. These offshore operations marked a new phase in Turkmenistan’s oil industry, enabling access to additional reserves beneath the seabed. Turkmenistan’s major onshore oil fields encompass a diverse array of sites that have played critical roles in the nation’s energy sector. Among these are Çeleken, Goñurdepe, Nebitdag, Gumdag, Barsagelmez, Guýujyk, Gyzylgum, Ördekli, Gögerendag, Gamyşlyja, Ekerem, Çekişler, Keýmir, Ekizek, and Bugdaýly. Each of these fields has contributed varying volumes of crude oil, reflecting the geographical spread and geological diversity of Turkmenistan’s hydrocarbon resources. The development and exploitation of these fields have involved a combination of domestic and foreign investment, technological advancements, and infrastructural improvements, all aimed at maximizing production efficiency and output. In terms of financial investment, the Turkmen government demonstrated a significant commitment to the oil sector in 2019, with capital investment totaling 3.29 billion manats. This substantial allocation of funds underscored the strategic importance of oil production to the national economy and the state’s intent to enhance exploration, extraction, and processing capabilities. Such investment facilitated modernization of equipment, expansion of drilling operations, and development of associated infrastructure, thereby supporting increased production levels and the potential for export growth. During the period from January to November 2020, Turkmenistan produced approximately 8.7 million tonnes of oil and condensate. In addition to crude oil, the country also produced 231,000 tonnes of liquid petroleum gas (LPG), reflecting the diversity of hydrocarbon products extracted from its oil and gas fields. These production figures indicate the ongoing operational capacity of the oil sector despite global market fluctuations and challenges posed by the COVID-19 pandemic during that year. The combined output of oil, condensate, and LPG contributed significantly to the country’s energy supply and export revenues. Official state media reported that in the calendar year 2023, Turkmenistan’s oil production reached 8.3167 million tonnes. This figure reflects a slight decrease compared to previous years but remains indicative of the country’s sustained role as a notable oil producer in the region. The reported production volume highlights the continued exploitation of both onshore and offshore fields and the government’s efforts to maintain output levels amid evolving market conditions and technological developments. Historical data from the BP Statistical Review provides a detailed overview of Turkmenistan’s oil production and consumption trends from 2002 to 2019. In 2002, the country produced 183,000 barrels per day (equivalent to 9.0 million tonnes per year), while domestic consumption stood at 3.9 million tonnes annually. By 2005, production had increased modestly to 193,000 barrels per day (9.5 million tonnes per year), with consumption rising to 4.3 million tonnes per year. This upward trajectory continued in 2008, when production reached 208,000 barrels per day (10.3 million tonnes per year) and consumption climbed to 5.1 million tonnes annually. In 2009, production further increased to 211,000 barrels per day (10.4 million tonnes per year), despite a slight decrease in consumption to 4.6 million tonnes per year. The following year, 2010, saw production rise to 217,000 barrels per day (10.7 million tonnes per year), while consumption remained relatively stable at 4.5 million tonnes annually. In 2011, production held steady at 217,000 barrels per day (10.7 million tonnes per year), with consumption increasing slightly to 4.7 million tonnes per year. The year 2012 marked a further increase in production to 222,000 barrels per day (11.0 million tonnes per year), with consumption at 4.8 million tonnes annually. Production continued to grow in 2013, reaching 231,000 barrels per day (11.4 million tonnes per year), while consumption remained stable at 4.8 million tonnes per year. A significant rise occurred in 2014, when production increased to 263,000 barrels per day (12.9 million tonnes per year), accompanied by a consumption increase to 6.5 million tonnes annually. This growth trend persisted in 2015, with production at 271,000 barrels per day (13.2 million tonnes per year) and consumption steady at 6.5 million tonnes per year. In 2016, production slightly decreased to 270,000 barrels per day (13.2 million tonnes per year), while consumption remained unchanged at 6.5 million tonnes annually. In 2017, production was recorded at 271,000 barrels per day (13.1 million tonnes per year), with consumption consistent at 6.5 million tonnes per year. The following year, 2018, saw a decrease in production to 261,000 barrels per day (12.6 million tonnes per year), while consumption increased to 6.7 million tonnes annually. In 2019, production rose slightly to 264,000 barrels per day (12.5 million tonnes per year), with consumption further increasing to 7.1 million tonnes per year. These data illustrate the general pattern of gradual production growth over the period, punctuated by minor fluctuations, alongside a steady rise in domestic consumption, reflecting both expanding industrial demand and population growth within Turkmenistan.

Oil refining in Turkmenistan is primarily concentrated at two major facilities: the Türkmenbaşy oil refinery and the Seydi oil refining complex. The Türkmenbaşy refinery, located in the western part of the country near the Caspian Sea, stands as the largest and most significant refining installation in Turkmenistan. As of May 2016, this refinery had a refining capacity exceeding 10 million tons of crude oil per year, making it a critical hub for the nation’s petroleum processing industry. The refinery’s extensive capacity allows it to handle a broad spectrum of crude oil inputs and produce a diverse array of petroleum products to meet both domestic demand and export requirements. The product slate of the Türkmenbaşy refinery is notably varied, reflecting its advanced processing capabilities and the strategic importance of supplying multiple sectors of the economy. Among its outputs are unleaded gasoline, which fuels the country’s transportation sector, and petroleum coke, a carbon-rich solid material used in industrial applications. The refinery also produces asphalt, essential for road construction and infrastructure development, as well as laundry detergent, which indicates the facility’s integration with petrochemical derivatives beyond traditional fuels. Additionally, hydro-treated diesel and lubricating oils are manufactured, serving both transportation and machinery maintenance needs. This broad product range underscores the refinery’s role not only in energy provision but also in supporting industrial and consumer goods sectors within Turkmenistan. A particularly noteworthy aspect of the Türkmenbaşy oil refinery is its status as the largest producer of liquid petroleum gas (LPG) in Turkmenistan. The facility accounts for approximately two-thirds of the country’s total LPG production, with an annual output of about 300,000 tonnes. LPG, a mixture of propane and butane, is widely used for heating, cooking, and as a fuel for vehicles, making it a vital energy source for both urban and rural populations. The refinery’s substantial contribution to LPG supply highlights its strategic importance in ensuring energy security and meeting the diverse fuel needs of Turkmenistan’s population and industries. In contrast to the Türkmenbaşy refinery’s large-scale operations, the Seydi oil refining complex operates on a smaller scale but remains a significant component of Turkmenistan’s refining infrastructure. In the first quarter of 2020, the Seydi refinery processed approximately 135,500 tonnes of oil, and from January to November 2020, it handled a total of 441,200 tonnes. These figures suggest an estimated annual processing capacity of about half a million tonnes for the year 2020, which is considerably lower than its original design capacity of 6 million tonnes. This disparity between design and actual throughput points to operational challenges or shifts in supply and demand dynamics affecting the refinery’s utilization. During the first eight months of 2021, the Seydi refinery produced a range of petroleum products, including 135,200 tonnes of gasoline, 77,600 tonnes of diesel fuel, 22,800 tonnes of heavy gas oil, and 19,500 tonnes of asphalt. This output distribution reflects the refinery’s continued focus on generating fuels essential for transportation and industrial applications, as well as materials like asphalt used in infrastructure development. The production volumes indicate a moderate level of activity relative to its capacity, suggesting that while the refinery remains operational and contributes to the national petroleum product supply, it does not operate at full capacity. The Seydi refinery’s origins trace back to the Soviet era, during which it was constructed to process crude oil sourced from Siberia. This historical context explains the refinery’s initial design parameters and capacity, which were aligned with the Soviet Union’s integrated oil production and distribution network. Following the dissolution of the Soviet Union in 1991, the Seydi refinery underwent a significant transition in its supply chain. Instead of relying on Siberian crude, the facility began processing hydrocarbons extracted from Turkmenistan’s domestic oil fields, including Gokdumalak, Yashyldepe, Yoloten, and Kerwen. This shift not only reoriented the refinery’s operations toward supporting national energy independence but also necessitated adjustments in processing techniques to accommodate the characteristics of local crude oil. Despite these efforts to maintain and adapt refining operations, the Turkmen government has expressed concerns regarding the performance and output levels of its petroleum processing enterprises. In October 2020, President Gurbanguly Berdimuhamedow publicly criticized the low production volumes from the country’s refineries. He pointed out that oil extraction growth had stagnated, even though approximately half of the oil produced was being exported. This situation suggested inefficiencies in domestic processing capacity and underutilization of available resources. The president’s remarks underscored the need for improved operational efficiency and increased refinery throughput to maximize the value derived from Turkmenistan’s hydrocarbon reserves. President Berdimuhamedow further highlighted that the processing enterprises were operating at suboptimal levels, with refinery utilization rates lingering at approximately 40% for an extended period. Such low utilization rates indicate that a significant portion of refining capacity remains idle, which can lead to economic inefficiencies, reduced profitability, and missed opportunities for value addition within the country’s energy sector. The president’s critique served as a call to action for enhancing refinery performance, optimizing production processes, and potentially investing in modernization efforts to raise utilization closer to design capacities. Addressing these challenges is critical for Turkmenistan to fully capitalize on its oil resources and strengthen its position in regional and global energy markets.

China has emerged as the principal importer of Turkmenistan’s natural gas, with official trade data from both countries indicating import volumes consistently ranging between 32 and 35 billion cubic meters per annum (bcma). This significant demand from China has been a cornerstone of Turkmenistan’s energy export strategy, reflecting the deepening economic ties and the strategic importance of the Central Asia–China gas pipeline. Initially, Turkmenistan’s quota on this pipeline was established at 35 bcma, aligning with the volume of natural gas that could be reliably transported and sold under existing agreements. However, in August 2023, the Turkmenistan Ministry of Foreign Affairs announced an increase in this quota to 40 bcma, signaling an expansion in Turkmenistan’s export capacity and a strengthening of its energy partnership with China. Despite the official quota, Turkmen media reported that China imported as much as 43.2 billion cubic meters (bcm) of natural gas via the Central Asia–China pipeline in 2022. This figure exceeded the previously established quota, although the exact volume of this total that originated specifically from Turkmenistan was not explicitly detailed in the media reports. Subsequent clarifications from press sources provided a more precise figure, stating that Turkmenistan’s natural gas exports to China in 2022 amounted to 34.09 bcm. This discrepancy between reported pipeline throughput and Turkmenistan’s share highlights the complexity of regional gas flows and the involvement of multiple suppliers feeding into the pipeline network. In addition to China, Russia’s Gazprom has been a purchaser of Turkmen pipeline gas, albeit in smaller quantities compared to Chinese imports. Gazprom’s purchases from Turkmenistan totaled 4 bcm in 2019 and increased slightly to 4.7 bcm in 2020. The volume further rose to approximately 10 bcm in 2021, reflecting a gradual uptick in Turkmen gas sales to Russia. Some of the gas acquired by Gazprom was subsequently resold to Uzbekistan, indicating a degree of regional gas trade integration and the use of Turkmen gas to meet demand in neighboring Central Asian markets. In June 2019, Russia and Turkmenistan formalized their energy cooperation by signing a five-year agreement that stipulated annual deliveries of 5.5 bcm of natural gas from Turkmenistan to Russia. This agreement underscored the continuing, albeit limited, role of Russia as a market for Turkmen gas amidst the latter’s pivot towards Asian markets. Turkmenistan’s pipeline gas exports to Iran experienced a significant disruption in 2017 when sales ceased due to a dispute over arrears. This interruption halted a flow of natural gas that had been part of Turkmenistan’s diversified export portfolio. However, relations between the two countries improved, and in the summer of 2023, pipeline gas exports to Iran resumed with test shipments of 10 million cubic meters (mcm) per day. This resumption marked a critical step in restoring energy trade ties between Turkmenistan and Iran. Furthermore, a new deal signed in June 2023 envisioned Turkmenistan exporting up to 20 mcm per day of natural gas to Iran, signaling an intention to significantly increase the volume of gas supplied and to solidify Iran as a key regional customer. In November 2021, Turkmenistan, Iran, and Azerbaijan announced an agreement to facilitate a natural gas swap arrangement involving up to 2 billion cubic meters per year. Under this deal, Turkmen gas would flow southward into Iran, while Iranian gas would be delivered to Azerbaijan, effectively creating a triangular energy exchange that leveraged the geographic proximity and infrastructure of the three countries. This swap arrangement aimed to optimize regional gas utilization and improve supply security. Iran’s oil minister, Javad Owji, expressed readiness to expand the gas swap volume substantially, suggesting an increase to 15 bcma, which would represent a major escalation in the scale of this trilateral energy cooperation. By August 2023, media reports indicated that the volume of gas swapped between Turkmenistan and Iran had already increased from an initial 4.5 mcm per day to 8 mcm per day. This growth in swap volume reflected the strengthening operational capacity and mutual benefits realized by both countries through this arrangement. The incremental increase also underscored the potential for further expansion, in line with Iran’s stated ambitions and the evolving dynamics of regional gas markets. According to BP’s Statistical Review of World Energy 2021, Turkmenistan’s natural gas exports in 2020 were distributed among several destinations within the Commonwealth of Independent States (CIS) and China. The data indicated that Kazakhstan imported a modest 0.1 bcm, Russia received 3.8 bcm, and other CIS countries collectively imported 0.5 bcm. The largest share of Turkmenistan’s natural gas exports, amounting to 27.2 bcm, was delivered to China. These figures totaled 31.6 bcm for the year, illustrating the dominant role of China as a consumer of Turkmen gas and the comparatively smaller, though still significant, export volumes to neighboring CIS countries. This distribution pattern reflects Turkmenistan’s strategic emphasis on expanding its gas exports to Asian markets while maintaining traditional ties with regional partners.

In 2021, Turkmenistan generated significant revenue from its natural gas exports to China, earning approximately $6.79 billion according to Chinese sources. This figure underscores the importance of the Chinese market as a primary destination for Turkmen natural gas, reflecting the deepening energy ties between the two countries. The export relationship continued to strengthen into the following year, as evidenced by Chinese Customs statistics, which reported that from January through November 2022, China imported natural gas from Turkmenistan valued at $9.28 billion. This substantial increase in the value of imports over the preceding year highlights the growing demand for Turkmen gas in China and the expanding volume of trade between the two nations. Beyond China, Turkmenistan also supplied natural gas to Azerbaijan, albeit on a smaller scale. In the calendar year 2022, Azerbaijan imported 857 million cubic meters (mcm) of natural gas from Turkmenistan, with the total value of these imports exceeding $130.63 million. This trade relationship, while modest compared to the volumes exported to China, illustrates Turkmenistan’s efforts to diversify its export markets and strengthen regional energy cooperation within the Caspian and Central Asian regions. In June 2021, a significant development in Turkmenistan’s hydrocarbon sector was announced through the awarding of a tender to the CNPC Chuanging Drilling Engineering Company, Ltd., a subsidiary of the China National Petroleum Corporation (CNPC). The contract involved drilling gas wells in the Galkynysh gas field, one of the world’s largest gas reserves and a cornerstone of Turkmenistan’s energy production capacity. The agreement was notable not only for its strategic importance but also because the payment for the drilling contract was arranged in kind rather than in cash. Under the terms of the deal, CNPC was to receive 17 billion cubic meters (bcm) of natural gas delivered over a three-year period as compensation for its drilling services. This arrangement reflects Turkmenistan’s approach to leveraging its natural gas resources to attract foreign investment and technical expertise while managing financial outlays. The first gas well drilled under this contract was commissioned in January 2023, marking a milestone in the ongoing development of the Galkynysh field. The commissioning of this well signified the operationalization of the drilling project and underscored the continued expansion of Turkmenistan’s gas production capabilities. The successful completion of the initial well also demonstrated the effective collaboration between Turkmenistan and CNPC, further solidifying the role of Chinese companies in the development of Turkmenistan’s hydrocarbon sector. Examining Turkmenistan’s hydrocarbon exports over the period from 2015 to 2019 reveals fluctuating volumes and values across natural gas, petroleum products, and crude oil. In 2015, the country exported 40.3 billion cubic meters of natural gas, which was valued at $8,406.7 million. Alongside natural gas, Turkmenistan exported 2.8 million tonnes of petroleum products valued at $1,038.3 million, and 4.1 million tonnes of crude oil with a value of $1,466.8 million. This year represented a peak in natural gas export volume within the five-year span, accompanied by robust petroleum and crude oil export figures. The following year, 2016, saw a decline in natural gas exports to 37.9 billion cubic meters, with the total value dropping significantly to $4,327.8 million. Petroleum products exports also decreased slightly to 2.6 million tonnes, valued at $796.2 million, while crude oil exports increased to 4.9 million tonnes but experienced a decrease in value to $1,210.8 million. The reduction in natural gas export value despite a relatively modest decline in volume suggests a drop in global or regional gas prices during that period, impacting Turkmenistan’s export revenues. In 2017, natural gas exports increased marginally to 38.2 billion cubic meters, with the value rising to $5,031.7 million, indicating a partial recovery in gas prices or improved contract terms. Petroleum products exports remained steady at 2.6 million tonnes but saw an increase in value to $1,000.7 million. Conversely, crude oil exports declined sharply to 1.9 million tonnes, with the value falling to $612.8 million. This shift may reflect changes in production priorities or market conditions affecting crude oil output and export strategies. The year 2018 witnessed a stabilization in natural gas exports at 37.8 billion cubic meters, with a notable increase in value to $6,428.0 million, suggesting a rebound in gas prices or more favorable contract negotiations. Petroleum products exports rose to 2.9 million tonnes, valued at $1,430.1 million, while crude oil exports surged to 6.4 million tonnes with a substantial increase in value to $2,634.4 million. This marked growth in crude oil exports and their value indicated an expansion of Turkmenistan’s oil production capacity or improved access to international markets. In 2019, natural gas exports slightly decreased to 37.6 billion cubic meters, but the export value increased to $6,942.1 million, continuing the trend of rising gas prices or enhanced contract conditions. Petroleum products exports further increased to 3.1 million tonnes, valued at $1,297.1 million, while crude oil exports decreased to 3.8 million tonnes with a value of $1,671.5 million. These fluctuations in crude oil volumes and values reflect ongoing adjustments in Turkmenistan’s hydrocarbon export portfolio, influenced by both domestic production dynamics and external market factors. Overall, Turkmenistan’s hydrocarbon export profile during this period highlights the dominant role of natural gas in the country’s economy, with petroleum products and crude oil serving as complementary sources of export revenue. The variations in export volumes and values across these commodities illustrate the sensitivity of Turkmenistan’s energy sector to global market trends, pricing fluctuations, and strategic partnerships, particularly with major consumers such as China. The country’s efforts to develop its vast gas reserves, exemplified by projects like the Galkynysh drilling contract with CNPC, demonstrate a continued commitment to expanding its export capacity and securing long-term energy trade relationships.

In 2019, Turkmenistan’s total electrical energy generation was reported to be 22,521.6 million kilowatt-hours, equivalent to 22.52 terawatt-hours. This figure reflected a notable decline from previous years, illustrating fluctuations in the country’s power production over the latter half of the decade. Between 2015 and 2019, electrical power generation in Turkmenistan experienced variable trends; in 2015, the output stood at 23,284.5 million kilowatt-hours, which then increased to a peak of 24,903.9 million kilowatt-hours in 2017 before subsequently decreasing to the 2019 level of 22,521.6 million kilowatt-hours. These fluctuations underscored the dynamic nature of Turkmenistan’s energy sector, influenced by factors such as infrastructure development, fuel availability, and export demands. Alongside changes in domestic power generation, electricity exports from Turkmenistan also varied significantly during the 2015 to 2019 period. In 2015, the country exported 3,215.3 million kilowatt-hours of electricity, which rose to a peak of 3,751.4 million kilowatt-hours in 2016. However, by 2019, exports had decreased sharply to 1,803.5 million kilowatt-hours. This decline in export volume may be attributed to shifting regional demand, changes in bilateral energy agreements, or internal consumption priorities. The export capacity of Turkmenistan’s power sector has historically played a crucial role in regional energy markets, particularly in supplying neighboring countries such as Afghanistan and Iran. As of 2013, Turkmenistan operated a total of ten electrical power plants, which were equipped with 32 turbines comprising different technologies. These included 14 steam-driven turbines, 15 gas-powered turbines, and 3 hydroelectric turbines. The diversity of turbine types reflected the country’s reliance on a mix of thermal and hydroelectric power generation methods, with a predominant focus on gas-powered plants due to Turkmenistan’s abundant natural gas reserves. The steam-driven turbines were typically associated with combined cycle plants or older thermal facilities, while hydroelectric turbines capitalized on the country’s river systems to contribute a smaller but strategic portion of the energy mix. Looking further back, in 2011, Turkmenistan’s power output was recorded at 18.27 billion kilowatt-hours, with 2.5 billion kilowatt-hours of this production exported to neighboring countries. This export volume represented a significant share of the total output, highlighting Turkmenistan’s role as a regional energy supplier even at that time. The steady growth in power generation capacity and export volumes since 2011 reflected ongoing efforts to modernize and expand the country’s electrical infrastructure. According to a report published by the Asian Development Bank in October 2018, Turkmenenergo, the State Energy Corporation, functioned as the country’s vertically integrated power utility. Turkmenenergo was responsible for the generation, transmission, and distribution of electricity across Turkmenistan. In 2017, the corporation produced over 23 terawatt-hours of electricity, of which approximately 15 percent was exported to neighboring countries. This export percentage underscored the strategic importance of electricity sales in Turkmenistan’s energy economy and its integration into regional energy networks. To bolster electricity generation and support export ambitions, Turkmenistan undertook the construction of new power plants in key locations including Mary, Ahal province, and the Çärjew District of Lebap province. These projects were part of a broader strategy to enhance generation capacity, improve energy security, and increase export potential. The Mary-3 combined cycle power plant, commissioned in 2018, was a flagship project in this expansion. Built by the Turkish conglomerate Çalık Holding and equipped with General Electric turbines, the Mary-3 plant had a capacity of 1.574 gigawatts. Its design specifically targeted the expansion of electricity exports to Afghanistan and Pakistan, reflecting Turkmenistan’s efforts to deepen energy ties with South Asian markets. Another significant development was the Zerger power plant located in the Çärjew District. Constructed through a collaboration between Japanese companies Sumitomo, Mitsubishi, Hitachi, and the Turkish firm Rönesans Holding, the Zerger plant was commissioned in September 2021. It featured a design capacity of 432 megawatts, generated by three gas turbines each rated at 144 megawatts. The primary purpose of the Zerger facility was to facilitate electricity exports, thereby reinforcing Turkmenistan’s position as a regional energy exporter. The plant’s fuel supply came from the Üçajy Gas Field, known in Russian as Учаджинского газодобывающего месторождения, which was connected to the power station via a 125-kilometer high-pressure natural gas pipeline. This direct pipeline ensured a reliable and efficient fuel delivery system critical to the plant’s operation. In addition to these large-scale projects, the Ahal power plant was constructed with a capacity of 650 megawatts to meet the electricity needs of Ashgabat, the capital city. This plant was particularly important for supplying power to the Olympic Village and other urban infrastructure, supporting the city’s growing demand for reliable electricity. The focus on urban power supply highlighted the government’s commitment to improving living standards and supporting major national events through enhanced energy infrastructure. The Derweze State Electrical Power Station, known in Turkmen as Derweze Döwlet Elektrik Stansiýasy, was another key facility in Turkmenistan’s power generation portfolio. Constructed by Çalık Enerji in 2015, this plant had a capacity of 504.4 megawatts and was situated near Ovadandepe. The Derweze station contributed significantly to the regional power supply and represented one of the modern thermal generation assets developed during the mid-2010s. In March 2023, the Turkmen government announced plans to build a new natural gas-fired combined cycle power plant in Balkan Province with a capacity of 1,574 megawatts. This announcement marked a continuation of the country’s strategy to expand power generation capacity, particularly through combined cycle technology that offers higher efficiency and lower emissions compared to traditional thermal plants. Subsequently, in October 2023, the contract for the construction of the Balkan Province power plant was awarded to Çalık Enerji, the same Turkish company involved in previous projects such as Mary-3 and Derweze. The project was slated for completion by May 2027, indicating a multi-year construction timeline aligned with the scale and complexity of the facility. National Leader Gurbanguly Berdimuhamedow stated in November 2023 that the new Balkan Province power plant was intended primarily to export electricity to Azerbaijan. This declaration emphasized Turkmenistan’s ongoing efforts to strengthen energy cooperation with regional partners and diversify its electricity export markets. The Balkan Province plant was thus positioned as a strategic asset in Turkmenistan’s energy diplomacy and economic development plans. Complementing generation capacity expansion, Turkmenistan embarked on a national grid strengthening project supported by the Asian Development Bank. This initiative aimed to enhance the country’s electricity transmission infrastructure to improve reliability, efficiency, and integration. The project included the construction of four new power substations and the installation of high-voltage direct lines designed to interconnect disparate parts of the national grid. Notably, the project featured a 500-kilovolt transmission line linking Balkan province and Dashoguz, as well as a 200-kilovolt line connecting Buzmeyin and Balkanabat. These upgrades were intended to create an interconnected national transmission grid, thereby facilitating more stable energy distribution, reducing losses, and enabling better management of supply and demand across Turkmenistan. The national grid strengthening project represented a critical component of Turkmenistan’s broader energy strategy, which sought to modernize infrastructure, support increased generation capacity, and expand export capabilities. By improving transmission networks, the country aimed to enhance the overall reliability of electricity supply for domestic consumers and export partners alike, while also fostering greater energy efficiency and sustainability within its power sector.

The United States Geological Survey (USGS), a scientific agency of the United States government, compiled and published an extensive dataset titled “Turkmenistan: Production of Mineral Commodities,” which is publicly accessible and provides detailed annual mineral production figures spanning from 2014 through 2018. This comprehensive table serves as a critical resource for understanding the scale and trends in Turkmenistan’s mineral sector during this period, offering quantitative insights into the country’s output across a diverse array of mineral commodities. The data, reported through 20 May 2019, includes both officially recorded and estimated figures, with estimates rounded to no more than three significant digits. Some values have been revised or estimated, as indicated in the original source, reflecting the challenges in obtaining precise production statistics for certain minerals. Iron and steel rolled products demonstrated a modest but steady increase in production over the five-year period. In 2014, Turkmenistan produced 135,000 metric tons of these materials, which rose to 144,000 metric tons by 2017 and maintained that level through 2018. This upward trend suggests a gradual expansion in the country’s metallurgical capabilities and possibly reflects growing domestic demand or enhanced industrial capacity. The consistency in production at 144,000 metric tons during the final two years indicates a stabilization phase following incremental growth. Bromine production in Turkmenistan remained stable at 500 metric tons annually from 2014 through 2016. However, no data was available for bromine output in 2017 and 2018, which may imply either a lack of production, reporting gaps, or confidentiality surrounding this commodity. Bromine’s consistent production in the earlier years highlights its role as a minor but steady component of Turkmenistan’s mineral portfolio. Hydraulic cement production experienced a continuous and notable increase throughout the period under review. Starting at 2.9 million metric tons in 2014, production rose steadily each year, reaching 3.8 million metric tons by 2018. This significant growth reflects the expansion of construction and infrastructure projects within the country, as cement is a fundamental material in building and development. The nearly one million metric ton increase over four years underscores the sector’s importance in Turkmenistan’s economy and its potential as a driver of industrial activity. Bentonite clay powder production showed a gradual upward trend, increasing from 400 metric tons in 2014 to 450 metric tons in 2018. Alongside this, the production of other unspecified bentonite clay types also rose, from a revised figure of 7,387 metric tons in 2014 to an estimated 9,000 metric tons in 2018. Bentonite clays are valued for their absorbent properties and are used in various industrial applications, including drilling mud, foundry sands, and as binders. The incremental growth in both powder and other bentonite clay production suggests a steady demand and possibly the development of mining and processing facilities dedicated to these materials. Gypsum mine production remained remarkably stable at approximately 110,000 metric tons annually throughout the five-year span. This consistency indicates a balanced supply and demand dynamic within the gypsum market in Turkmenistan, with no significant expansion or contraction in mining activities. Gypsum is widely used in construction for plaster and wallboard production, so this steady output aligns with ongoing construction needs without dramatic shifts. Iodine production was steady at 500 metric tons from 2014 to 2016, followed by a slight increase to 510 metric tons in 2017, before declining to 400 metric tons in 2018. This fluctuation may reflect changes in extraction efficiency, resource availability, or market demand. Iodine is an important element used in medical, industrial, and chemical applications, and the production variations suggest some volatility in the sector during the latter years. Lime production in Turkmenistan showed a consistent upward trajectory, increasing from 19,400 metric tons in 2014 to 23,000 metric tons in 2018. Lime, primarily used in construction, agriculture, and various industrial processes, saw a steady rise that likely correlates with the country’s broader industrial and infrastructural development. This gradual increase indicates an expanding capacity or growing consumption within domestic markets. The production of nitrogen-containing compounds, specifically ammonia and urea, also experienced growth over the period. Ammonia production rose from 293,000 metric tons in 2014 to an estimated 340,000 metric tons in 2018, while urea output increased from 344,000 metric tons in 2014 to an estimated 400,000 metric tons in 2018. These chemicals are essential components of fertilizers, underscoring Turkmenistan’s role in agricultural inputs production. The upward trend in both ammonia and urea production suggests a strengthening of the chemical manufacturing sector, possibly driven by both domestic agricultural needs and export potential. Potash production, measured in terms of potassium oxide (K2O) content, was nonexistent from 2014 through 2016. However, production commenced in 2017 with an estimated output of 25,000 metric tons, followed by a slight decrease to 24,000 metric tons in 2018. The initiation of potash production marks a diversification of the mineral sector and indicates the development of new mining operations or processing capabilities. Potash is a vital fertilizer component, and its emergence in Turkmenistan’s mineral production profile may enhance the country’s agricultural chemical industry. Salt production increased from 91,700 metric tons in 2014 to a stable 100,000 metric tons annually from 2015 through 2018. This rise and subsequent stabilization suggest an expansion followed by a consistent output level, reflecting either saturation of domestic demand or steady export activity. Salt remains a fundamental mineral commodity with applications in food processing, chemical industries, and de-icing. Sodium sulfate production experienced a peak of 70,000 metric tons in 2015, followed by a sharp decline to 26,000 metric tons by 2017, where it remained through 2018. This significant reduction may be attributed to resource depletion, changes in market demand, or shifts in production priorities. Sodium sulfate is used in detergents, glass manufacturing, and paper production, so the decline could impact related industrial sectors. Sulfur production, measured by sulfur content, was 506,000 metric tons in 2014 and increased to 600,000 metric tons in 2015. However, it then underwent a sharp decrease to 200,000 metric tons by 2017, maintaining that level in 2018. The initial increase followed by a steep decline suggests substantial changes in extraction or processing activities, possibly linked to the availability of natural gas and petroleum byproducts, as sulfur is often recovered from these sources. The stabilization at the lower production level indicates a new equilibrium in sulfur output. Natural gas production in Turkmenistan showed slight fluctuations during the period. Starting at 67 billion cubic meters in 2014, production peaked at 69.6 billion cubic meters in 2015 before declining to an estimated 62 billion cubic meters in 2018. These variations reflect the dynamics of Turkmenistan’s extensive natural gas industry, influenced by factors such as reservoir management, export contracts, and domestic consumption. Natural gas remains a cornerstone of the country’s energy sector and export economy. Crude petroleum production, including condensate, increased from 87.2 million 42-gallon barrels in 2014 to a peak of 96.96 million barrels in 2016. Subsequently, production declined to 85 million barrels by 2018. This pattern indicates an initial expansion phase followed by a contraction, which may be related to reservoir depletion, investment cycles, or shifts in global oil markets. The inclusion of condensate, a valuable light hydrocarbon, highlights the complexity of Turkmenistan’s petroleum output. Petroleum refinery output steadily decreased over the five years, falling from 57.1 million 42-gallon barrels in 2014 to an estimated 44 million barrels in 2018. This decline suggests a reduction in domestic refining capacity or a strategic shift toward exporting crude oil rather than processed products. The decreasing refinery throughput could also reflect changes in domestic demand for refined petroleum products or infrastructure challenges. The USGS table also notes that certain minerals—barite, bench gravel, coal, dolomite, epsomite, and kaolin—may have been produced in Turkmenistan during this period; however, reliable production data for these commodities was unavailable. This lack of data underscores the challenges in comprehensive mineral reporting and suggests that while these minerals are present and potentially exploited, their production volumes are either minimal, unreported, or confidential. In a more recent development, in January 2023, the Deputy Prime Minister for Industry and Construction of Turkmenistan announced the discovery of iron oxide deposits near Çagyl, situated in the Türkmenbaşy District of Balkan Province. This discovery represents a significant addition to the country’s mineral resource base and may have implications for future mining and metallurgical activities. The identification of iron oxide deposits could bolster Turkmenistan’s iron and steel sectors and contribute to the diversification of its mineral economy.

Turkmenistan’s cement industry is anchored by four principal cement plants, each designed with an annual production capacity of one million tons. These plants are strategically distributed across the country to serve regional construction demands. The Baherden Cement Plant and the Kelete Cement Plant are both situated in Ahal Province, a central region that plays a pivotal role in the nation’s industrial landscape. Meanwhile, the Lebap Cement Plant operates in Türkmenabat, the administrative center of Lebap Province in the east, and the Balkan Cement Plant is located in Jebel, a key industrial area in the western Balkan Province. This geographic dispersion facilitates the supply of cement to various construction projects across Turkmenistan, reflecting the government’s efforts to decentralize industrial production and stimulate regional economies. In response to growing infrastructure needs and the ambition to bolster domestic cement production, Turkmenistan announced plans to construct three additional cement plants. This expansion aims to increase the country’s overall cement output capacity significantly, thereby reducing reliance on imports and supporting the government’s broader economic development goals. The proposed new facilities are expected to incorporate modern production technologies and environmental standards, aligning with Turkmenistan’s ongoing industrial modernization initiatives. These developments underscore the strategic importance of cement manufacturing within the nation’s construction materials sector, which is critical for urban development and national infrastructure projects. Despite the established capacity, the utilization rates of the existing cement plants have varied considerably, as reported by President Gurbanguly Berdimuhamedov in 2019. The Kelete Cement Plant exhibited the lowest operational capacity utilization, functioning at only 8.1% of its design capacity. This underperformance contrasts sharply with the Lebap Cement Plant, which operated at a robust 88% capacity, indicating more consistent demand or more efficient management practices in that region. The Baherden Cement Plant utilized 64% of its capacity, reflecting moderate operational efficiency, while the Balkan Cement Plant functioned at just over 40%. These disparities highlight the uneven performance across the cement sector and suggest potential logistical, managerial, or market challenges affecting certain plants more than others. The low utilization at the Kelete plant, in particular, points to underutilized industrial assets that could be optimized through policy adjustments or infrastructure improvements. Cement production in Turkmenistan experienced a general decline over the five-year period from 2014 to 2019. Production volumes, measured in thousand tonnes, illustrate this downward trend: 3,401.5 in 2014, increasing slightly to 3,549.9 in 2015 and stabilizing at 3,550.0 in 2016, before decreasing to 2,881.4 in 2017, 2,651.4 in 2018, and further dropping to 1,993.2 in 2019. This contraction in output may be attributed to several factors, including fluctuating domestic demand, shifts in construction activity, or operational inefficiencies within the cement plants. The decline also reflects broader economic conditions and potential supply chain constraints that impacted the construction materials sector during this period. The reduction in cement production contrasts with the government’s expansion plans, indicating a complex interplay between capacity, utilization, and market dynamics. In addition to cement, Turkmenistan’s construction materials sector includes a significant glass manufacturing industry. In 2019, the country produced 5.1 million standard square meters of sheet glass with a thickness of 4 millimeters, demonstrating substantial activity in this segment. This level of production supports both domestic construction needs and export opportunities, contributing to the diversification of Turkmenistan’s industrial base. The glass manufacturing sector has seen considerable modernization, highlighted by the inauguration of a major float glass and glass container plant on 14 February 2018. This facility, constructed at a cost of $375 million by the Turkish construction company Tepe Inşaat, is located in Ovadandepe, north of Ashgabat, the capital city. The new plant replaced an older Soviet-era glass factory that was previously situated in central Ashgabat, marking a significant upgrade in production technology and capacity. The establishment of the Ovadandepe glass plant represents a strategic investment in modern industrial infrastructure, enabling Turkmenistan to produce higher quality glass products more efficiently. The facility’s capabilities encompass both float glass, which is essential for windows and facades, and glass containers, which serve packaging needs. This diversification within the glass sector enhances the country’s ability to meet a wide range of construction and industrial demands. The modernization also reflects Turkmenistan’s broader efforts to transition from Soviet-era industrial facilities to contemporary enterprises that comply with international standards. Turkmenistan’s glass exports further illustrate the sector’s growing economic significance. In 2019, the value of glass exports, as reported by international trading partners, reached US$9.5 million. This figure indicates that Turkmenistan not only satisfies domestic consumption but also participates in regional and international markets. The export revenue generated by glass products contributes to the country’s foreign exchange earnings and supports the government’s objective of expanding non-hydrocarbon exports. The export performance also underscores the competitive quality of Turkmenistan’s glass products and the effectiveness of recent investments in upgrading production facilities. Steel production forms another critical component of Turkmenistan’s construction materials industry. The Türkmen Demir Önümleri Döwlet Kärhanasy, or Turkmen Iron Products State Enterprise, operates a steel smelter located near Ovadandepe, positioned at kilometer 22 along the Ashgabat-Dashoguz Automobile Highway. This facility primarily processes scrap metal, converting it into rebar and channel iron, which are essential materials for reinforcing concrete and structural applications in construction. The use of scrap metal as raw material reflects an emphasis on recycling and resource efficiency within the steel production process. The smelter’s proximity to major transportation routes facilitates the distribution of steel products across the country, supporting various infrastructure and building projects. The steel smelter’s focus on producing rebar and channel iron aligns with the construction sector’s demand for durable and standardized materials. These products are fundamental to ensuring the structural integrity of buildings, bridges, and other infrastructure. By maintaining domestic production capabilities, Turkmenistan reduces its dependence on imported steel products, thereby strengthening its industrial self-sufficiency. The operation of the Türkmen Demir Önümleri Döwlet Kärhanasy also contributes to employment and skill development in the metallurgical sector, fostering industrial expertise within the national workforce. The Ceramic Products Plant in Bäherden, inaugurated in 2025, represents a significant advancement in Turkmenistan’s production of ceramic construction materials. This facility manufactures approximately 3.3 million square meters of ceramic tiles annually, alongside 120,000 units of sanitary ware. The plant utilizes local raw materials, capitalizing on Turkmenistan’s natural resources to produce high-quality ceramic products. The scale of production positions the plant as a key supplier for both residential and commercial construction projects, contributing to the modernization of building finishes and sanitary installations across the country. Equipped with advanced technology supplied by the Italian company SACMI, the Bäherden Ceramic Products Plant adheres to Industry 4.0 standards, incorporating automation, digitalization, and smart manufacturing processes. This technological integration enhances production efficiency, quality control, and environmental sustainability. The plant is designed to be environmentally friendly, minimizing waste and emissions in line with contemporary industrial best practices. The facility provides employment for 460 workers, supporting the local economy and fostering the development of skilled labor in ceramic manufacturing. The establishment of this plant reflects Turkmenistan’s commitment to upgrading its construction materials industry through innovation and sustainable practices.

As of 2019, Turkmenistan maintained an extensive chemical industry infrastructure comprising nine chemical plants dedicated primarily to the production of nitrogen and phosphorus fertilizers. These facilities collectively possessed a substantial output capacity, capable of producing approximately 700,000 tons of fertilizers annually. The development of this sector was closely tied to the country’s abundant natural gas reserves, which provided a critical feedstock for the synthesis of ammonia and other nitrogenous compounds essential for fertilizer manufacture. The strategic emphasis on nitrogen and phosphorus fertilizers reflected Turkmenistan’s efforts to support both domestic agricultural needs and export potential, thereby contributing to the diversification of its economy beyond hydrocarbon exports. Beyond fertilizer production, these chemical plants also engaged in the manufacture of a variety of other industrial chemicals, including sulfuric acid, nitric acid, iodine, bromine, and several mineral salts. Sulfuric acid and nitric acid, both fundamental to numerous industrial processes, were produced in significant quantities to support the fertilizer industry as well as other chemical manufacturing operations. The production of iodine and bromine underscored Turkmenistan’s exploitation of its mineral resources, as these halogen elements have important applications in pharmaceuticals, photography, and flame retardants. The mineral salts produced were utilized in various sectors, ranging from agriculture to water treatment, further illustrating the chemical plants’ role in supplying essential raw materials to multiple industries within the country. In 2019, Turkmenistan achieved a notable position in the global chemical market by ranking as the world’s third largest producer of iodine. This ranking highlighted the country’s significant contribution to the international supply of this vital element, which is used extensively in medical antiseptics, nutrition, and industrial processes. The prominence in iodine production was largely attributable to the exploitation of iodine-rich brine deposits and the development of specialized extraction and refining technologies within the chemical sector. Turkmenistan’s iodine output not only served domestic requirements but also positioned the country as a key player in global iodine markets, enabling it to engage in export activities that generated valuable foreign exchange earnings. This status reinforced the strategic importance of the chemical industry within Turkmenistan’s broader economic framework, emphasizing its role in enhancing the country’s industrial diversification and integration into international trade networks.

Turkmenistan’s petrochemical industry centers around the production of urea (carbamide) and polymers, with three major urea plants located in Tejen, Mary, and Garabogaz primarily serving export markets. These facilities represent critical components of the country’s strategy to capitalize on its abundant natural gas reserves by converting feedstock into value-added chemical products. The Garabogaz urea plant, the largest of the three, was constructed at an investment of approximately $1.3 billion. This facility was developed through a collaboration between Japan’s Mitsubishi Heavy Industries and GAP İnşaat, a subsidiary of the Turkish conglomerate Çalık Holding. Officially inaugurated on 18 September 2018, the Garabogaz plant was designed with an annual production capacity of 1.16 million tonnes of urea, positioning it as a significant player in the regional fertilizer market. Prior to Garabogaz, the Mary ammonia and urea plant was commissioned on 17 October 2014, marking another major milestone in Turkmenistan’s petrochemical expansion. The project cost totaled around US$650 million, and construction was carried out by a consortium comprising Turkey’s Rönesans Holding alongside Japanese firms Kawasaki and Sojitz. This plant was engineered to produce 400,000 tonnes of ammonia and 640,000 tonnes of urea annually, reflecting a dual focus on both ammonia and nitrogenous fertilizer production. The Mary facility’s integration of ammonia synthesis alongside urea production allowed for greater operational flexibility and efficiency in converting natural gas derivatives into fertilizers. The earliest of the three urea plants, the Tejen facility, was inaugurated on 18 March 2005 with an investment of $240 million. It was designed to produce 350,000 tonnes of urea per year, serving as a foundational element in Turkmenistan’s efforts to develop its petrochemical sector. Despite the strategic importance and substantial capacities of these three plants, reports indicate that none have consistently operated at their full design capacities. Various factors, including technical challenges, maintenance issues, and market dynamics, have contributed to underutilization of production potential across the facilities. Production data from January to October 2019 illustrate the operational realities faced by Turkmenistan’s urea sector. During this period, the Garabogaz plant produced approximately 392,000 tonnes of urea, a figure significantly below its design capacity. Of this output, around 261,000 tonnes were exported, underscoring the plant’s role in generating foreign exchange through fertilizer sales. In aggregate, total nitrogenous fertilizer production in Turkmenistan for the calendar year 2019 amounted to 550,500 tonnes on an active ingredient basis, reflecting the combined output of all operational urea and ammonia plants. This volume, while substantial, still fell short of the theoretical maximum output implied by the plants’ installed capacities. In addition to its focus on nitrogenous fertilizers, Turkmenistan expanded into the production of polymers with the inauguration of the Kiyanly Polymer Factory (Gyýanly Polimer Zawody) on 17 October 2018. This facility was designed to produce 381,000 tonnes of polyethylene and 81,000 tonnes of polypropylene annually, representing a significant diversification of the country’s petrochemical product range. The polymer plant was constructed at a cost of approximately US$3.4 billion, reflecting the scale and complexity of the project. The development consortium included South Korean and Japanese engineering and construction firms—LG International, Hyundai Engineering, and Toyo Engineering—working alongside the Turkish company Gap İnşaat. The plant’s production process utilized methane and ethane cracking technologies to convert natural gas liquids into polymer feedstocks, enabling the manufacture of high-density polyethylene (HDPE) and polypropylene (PP) resins for domestic use and export. Despite the ambitious design capacity, the Kiyanly Polymer Factory’s actual production in the first ten months of 2019 was markedly below expectations. During this period, the plant produced only 67,900 tonnes of polyethylene and 12,700 tonnes of polypropylene, representing a fraction of its intended output. This shortfall highlighted operational difficulties, including technical challenges related to the complex cracking and polymerization processes, as well as potential issues with feedstock supply and market conditions. The underperformance of the polymer plant raised concerns about the viability and sustainability of large-scale petrochemical investments in Turkmenistan. By January 2023, reports indicated that the Kiyanly Polymer Factory had ceased operations entirely and had not resumed production as of January 2024. This extended shutdown suggested significant unresolved technical or economic problems that prevented the plant from operating profitably or reliably. Opposition media sources reported in May 2024 that the polymer plant remained closed, with Hyundai Engineering engaged in conducting an audit to assess the extent of refurbishment and repairs necessary to restart production. The audit aimed to identify critical equipment failures, process inefficiencies, and infrastructure degradation that had accumulated during the plant’s idle period. The estimated cost to repair and restart the Kiyanly Polymer Factory was reported to be approximately one billion U.S. dollars, a substantial figure that underscored the severity of the plant’s deterioration and the scale of investment required to bring it back into operation. This repair estimate represented nearly one-third of the original construction cost, reflecting the financial challenges associated with maintaining and rehabilitating large petrochemical complexes in Turkmenistan’s industrial environment. The ongoing closure of the Kiyanly facility has implications for the country’s ambitions to become a regional petrochemical hub and diversify its economy beyond raw natural gas exports.

In March 2017, Turkmenistan inaugurated the Garlyk Mining and Enrichment Combinate, a significant industrial facility dedicated to the production of potash fertilizer. This development marked a major step in the country’s efforts to diversify its chemical industry beyond hydrocarbons. The construction of the Garlyk facility was undertaken by Belgorkhimprom, a Belarusian company specializing in chemical production infrastructure, and the project required an investment of approximately US$1.1 billion. The plant was engineered with the capacity to produce 1.4 million tonnes of potash fertilizer annually, with the primary export markets targeted being China and India, two of the largest consumers of agricultural fertilizers globally. Despite this ambitious design capacity, reports indicated that the Garlyk plant operated at a significantly reduced output, functioning at only 2 to 7 percent of its rated capacity. This underperformance suggested challenges related to either operational inefficiencies, market demand fluctuations, or logistical constraints that limited the plant’s ability to reach its full production potential. Turkmenistan’s chemical industry also includes a network of factories dedicated to the production of iodine, a critical element used in various industrial and medical applications. The country hosts three such iodine production facilities, located in the cities of Balkanabat, Hazar, and Bereket. Among these, the Bereket iodine plant was designed with an annual production capacity of 150 tonnes of iodine, contributing to the country’s supply of this valuable chemical. Plans for modernization and expansion were underway at the Balkanabat plant, where renovations aimed to increase its design capacity to 250 tonnes of iodine per year. In addition to iodine, the upgraded Balkanabat facility was projected to produce 2,400 tonnes of bromine annually, reflecting an integrated approach to extracting and processing halogen elements. Similarly, the Hazar plant was set to undergo upgrades that would raise its design capacity to 300 tonnes of iodine and 4,500 tonnes of bromine per year. These enhancements were part of a broader strategy to boost Turkmenistan’s output of non-hydrocarbon chemicals and to strengthen its position in international markets. By 2019, the total iodine production across these facilities reached 681.4 tonnes, underscoring the sector’s growing contribution to the national economy. In May 2025, the president of Turkmenistan issued a decree authorizing the state chemical company Türkmenhimiýa to enter into a contract with Daewoo Engineering & Construction Co., Ltd., a South Korean firm known for its expertise in industrial construction projects. This contract pertained to the construction of a new fertilizer plant in Türkmenabat, a city situated in the eastern part of the country. The planned Türkmenabat fertilizer facility was designed to have an annual production capacity of 350,000 tonnes of superphosphate and 100,000 tonnes of ammonium sulfate. These fertilizers play a crucial role in supporting agricultural productivity, both domestically and for export purposes. The establishment of this plant was expected to enhance Turkmenistan’s chemical manufacturing capabilities, diversify its fertilizer product range, and contribute to the country’s economic development by fostering greater self-sufficiency and expanding export potential in the non-hydrocarbon sector.

Cotton cultivation in Turkmenistan dates back to the 1880s, coinciding with the region’s incorporation into the Russian Empire. During this period, Turkmenistan emerged as a significant cotton producer within the Russian imperial economy, primarily focusing on the cultivation and export of raw cotton. The raw cotton harvested in Turkmenistan was largely shipped to Russia, where it was processed and spun into yarn and textiles. This export-oriented agricultural model persisted throughout the late 19th and 20th centuries, with Turkmenistan serving as a supplier of raw cotton rather than a producer of finished textile goods. The emphasis on raw cotton export continued until the dissolution of the Soviet Union in 1991, after which Turkmenistan embarked on a path toward industrial diversification and self-sufficiency in textile manufacturing. Following its independence in 1991, Turkmenistan undertook substantial investments aimed at developing a domestic textile industry capable of producing finished goods rather than merely exporting raw materials. Over the subsequent decades, the government allocated approximately $2 billion toward the establishment of a comprehensive network of manufacturing facilities. These investments facilitated the creation of around 70 plants and factories specializing in the production of cotton yarn, textiles, and garments. The scope of these facilities extended beyond traditional textiles to include the manufacture of various garment-related products such as shoes, reflecting a strategic effort to build an integrated textile and garment sector. This industrial expansion was part of a broader national policy to add value to the country’s raw cotton output and to stimulate economic growth through industrialization. Among the 70 textile-related enterprises established in Turkmenistan, 13 were designated as large-scale industrial operations, encompassing ginning, spinning, and textile mills. These facilities represented the core of the country’s textile manufacturing capacity, equipped with modern machinery and technology to process raw cotton into yarn and fabric at an industrial scale. The presence of large ginning mills ensured efficient separation of cotton fibers from seeds, while spinning mills converted these fibers into yarn. Textile mills subsequently wove or knitted the yarn into various types of fabric. The classification of these 13 plants as large-scale operations underscored Turkmenistan’s commitment to developing a robust textile industry capable of competing in regional and international markets. By 2019, Turkmenistan’s textile sector had demonstrated significant growth in both production and export performance. In that year, the country exported cotton textiles valued at $123.6 million, signaling an important milestone in the development of its textile manufacturing and export capabilities. This export figure reflected the increasing sophistication and capacity of Turkmenistan’s textile industry, as well as its ability to produce finished goods that met international market standards. The expansion of textile exports contributed to diversifying the national economy and reducing dependence on raw cotton exports, aligning with government objectives to enhance industrial output and foreign exchange earnings. The production of cotton yarn in Turkmenistan also reached substantial levels in 2019, totaling 118,600 tonnes. This volume of yarn production indicated a well-established spinning industry capable of processing large quantities of raw cotton into yarn suitable for a wide range of textile applications. The availability of domestically produced yarn provided a critical input for the country’s textile mills and garment factories, enabling vertical integration within the textile production chain. This integration facilitated the manufacture of diverse textile products while reducing reliance on imported raw materials. Fabric production in Turkmenistan during 2019 was notably extensive, with a total output of 209.4 million square meters. The majority of this fabric consisted of cotton textiles, which accounted for 192.9 million square meters, underscoring cotton’s central role in the country’s textile industry. In addition to cotton fabric, the production included 14.9 million square meters of terrycloth, a fabric commonly used for towels and bathrobes, and 1.4 million square meters of silk fabric, reflecting a degree of diversification into luxury and specialty textiles. The production of terrycloth and silk fabrics alongside cotton demonstrated the industry’s capacity to manufacture a variety of textile types catering to different market segments. Beyond fabric production, Turkmenistan’s garment manufacturing sector exhibited significant output in 2019. The country produced 40.9 million pairs of stockings, a figure that highlighted the scale and specialization of hosiery manufacturing within the textile industry. Stockings, as a garment category, require specific knitting technologies and materials, indicating the presence of advanced textile machinery and skilled labor. The large volume of stocking production suggested both domestic demand and export potential for these products. Furthermore, the production of knit items reached 5.5 million units in the same year, illustrating the diversity of garment types manufactured domestically. Knitwear encompasses a broad range of apparel, including sweaters, t-shirts, and other clothing items, and its production contributed to expanding the textile sector’s product portfolio. The integration of footwear manufacturing into Turkmenistan’s textile and garment industries was also evident in 2019, with the production of 1.5 million pairs of shoes. This output demonstrated the country’s efforts to develop complementary sectors related to garment production, such as shoemaking, which relies on textile materials for components like uppers and linings. The inclusion of footwear manufacturing within the textile industrial complex reflected a strategic approach to creating a more comprehensive and self-sufficient garment industry. The production of shoes alongside textiles and garments contributed to employment generation and economic diversification. In addition to the production of yarn, fabric, garments, and footwear, Turkmenistan manufactured 3,400 tonnes of knitted fabric in 2019. Knitted fabric, which differs from woven fabric in its construction and properties, is essential for producing a wide range of apparel items, particularly those requiring stretch and flexibility. The output of knitted fabric supported the garment manufacturing sector by providing a domestic source of this material, reducing the need for imports. This production volume further illustrated the breadth of Turkmenistan’s textile industry and its capability to supply various fabric types for different applications within the garment sector. Collectively, these production figures from 2019 underscored the significant progress Turkmenistan had made in developing a multifaceted textile and garment industry since its independence.

The government of Turkmenistan exercises centralized control and funding over all major construction projects within the country, reflecting a state-directed approach to infrastructure development and urban planning. This centralized system ensures that large-scale projects align with national priorities and strategic economic goals, with the state assuming full financial responsibility for their execution. By maintaining direct oversight, the government coordinates resources, labor, and materials to achieve rapid progress on key initiatives that contribute to the country’s modernization and development agenda. As of January 2021, official government reports indicated that more than 2,500 large-scale construction projects were actively underway across Turkmenistan, collectively representing an estimated investment of approximately $37 billion. This extensive portfolio of projects spans various sectors, including residential, commercial, governmental, and infrastructural developments. The sheer volume and financial scale of these undertakings underscore the government’s commitment to accelerating urban growth, enhancing public amenities, and expanding the nation’s physical infrastructure to meet the demands of a growing population and evolving economy. In the year 2020 alone, the government financed the construction of roughly two million square meters of new residential housing, a substantial increase in the country’s housing stock achieved entirely through state funding. This large-scale residential development effort was aimed at addressing housing shortages and improving living conditions for citizens, reflecting a policy focus on social welfare and urban expansion. The government’s investment in residential construction also served to stimulate the domestic construction industry, providing employment opportunities and fostering economic activity within related sectors such as materials manufacturing and real estate services. Alongside residential projects, the government also prioritized the construction of significant public and administrative buildings during 2020, completing 45 structures categorized as “important government” facilities. These buildings typically include administrative offices, cultural centers, and other state institutions essential for governance and public service delivery. The direct government funding of these projects highlights the emphasis placed on strengthening institutional infrastructure and enhancing the operational capacity of government agencies throughout Turkmenistan. In 2021, construction efforts culminated in the completion of five major facilities in the capital city of Ashgabat, marking a milestone in the city’s ongoing urban transformation. These projects comprised a new State Tribune, designed to host official ceremonies and public events, the Arkadag Hotel, which offers luxury accommodations and conference facilities, two new headquarters buildings for prominent banks, and a modern Congress Center intended to serve as a venue for large-scale meetings and international conferences. Together, these facilities contribute to Ashgabat’s profile as a political, economic, and cultural hub, supporting both domestic functions and international engagement. All five of these significant Ashgabat projects were constructed by the French multinational construction company Bouygues, which has established a substantial presence in Turkmenistan’s construction sector. Bouygues’ involvement reflects the government’s strategy of partnering with experienced foreign firms to ensure high-quality standards, advanced engineering techniques, and timely completion of complex projects. The collaboration between the Turkmen government and Bouygues exemplifies the integration of international expertise within the country’s development framework, facilitating the transfer of technology and best practices. The combined expenditure for these five major projects in Ashgabat reached approximately $1.5 billion, illustrating the scale of investment required to realize such landmark developments. This substantial financial outlay underscores the government’s prioritization of urban infrastructure and its willingness to allocate significant resources toward enhancing the capital’s built environment. The investment not only improves the city’s physical landscape but also aims to boost its attractiveness for business, tourism, and diplomatic activities. Among the most ambitious ongoing construction endeavors is the development of the city of Arkadag, which has been designated as the new capital of Ahal province. This project carries a budget of $4.8 billion and represents a comprehensive urban planning initiative intended to create a modern, well-equipped city from the ground up. Arkadag is envisioned as a symbol of Turkmenistan’s future-oriented development, featuring residential, commercial, administrative, and cultural facilities designed to accommodate a growing population and foster regional economic growth. The scale and scope of the Arkadag project highlight the government’s commitment to decentralization and balanced regional development. In addition to urban construction projects, significant investments have been directed toward transportation infrastructure, exemplified by the allocation of $2.3 billion for the construction of the Ashgabat-Turkmenabat motorway. This major highway project aims to enhance connectivity between the capital and Turkmenabat, one of the country’s key industrial and commercial centers. Improved road infrastructure is expected to facilitate trade, reduce travel times, and support economic integration across regions, thereby contributing to national development objectives. The Ashgabat-Turkmenabat motorway project is being executed by a consortium of four Turkmen construction firms, reflecting a strategic emphasis on utilizing domestic expertise and resources for critical infrastructure projects. This consortium approach promotes capacity-building within the national construction industry and encourages collaboration among local companies. By entrusting such a significant project to Turkmen firms, the government fosters the growth of the domestic construction sector and ensures that economic benefits, including employment and skill development, remain within the country.

Turkmenistan has historically occupied a strategic position as a crossroads within Central Asia, serving as an integral segment of the ancient Silk Road trade network. This historic role facilitated the movement of goods, culture, and ideas across vast distances, linking East and West through a series of interconnected land, sea, and air routes. The country’s geographic location enabled it to function as a vital transit corridor for cargo, leveraging its extensive transportation infrastructure to support trade flows that have persisted into the modern era. Over centuries, Turkmenistan’s transport routes have connected the resource-rich regions of Central Asia with markets in Europe, South Asia, and beyond, underscoring its longstanding importance in international commerce. Ashgabat International Airport, situated in the capital city of Turkmenistan, has emerged as a significant aviation hub within this transit network. It operates as a key stopover and transfer point for air passengers traveling between India and England, specifically connecting the Indian cities of Amritsar and New Delhi with the British cities of London and Birmingham. This role as a transfer hub facilitates efficient passenger movement along these routes, providing a convenient layover location that supports both business and leisure travel. The airport’s strategic positioning allows airlines to optimize flight paths and schedules, enhancing connectivity between South Asia and Western Europe while leveraging Turkmenistan’s geographic advantage. In addition to its function as a transfer hub for flights between India and England, Ashgabat International Airport also serves as a transit point for flights operating between Frankfurt-am-Main in Germany and Bangkok in Thailand. Under normal operating conditions, this connection enables smooth passenger and cargo transfers, linking major economic centers in Europe with key destinations in Southeast Asia. The airport’s role in this corridor highlights its importance in facilitating international air traffic beyond its immediate regional context, contributing to Turkmenistan’s broader integration into global transportation networks. By accommodating such transit flights, Ashgabat International Airport supports the diversification of air routes that pass through the country, reinforcing its position as a pivotal node in international aviation.

Turkmenistan’s principal seaport, the Turkmenbashy International Seaport, is situated on the eastern shore of the Caspian Sea, serving as the country’s main maritime gateway for both cargo and passenger traffic. This strategically important port has historically played a vital role in Turkmenistan’s trade and transportation infrastructure, linking the nation to regional and international markets across the Caspian basin. Recognizing the need to enhance its capacity and modernize its facilities, the Turkmen government initiated a comprehensive expansion project for the seaport that spanned from 2013 to 2018. This ambitious development, executed by the Turkish construction company Gap Inşaat, involved an investment totaling approximately $2 billion, reflecting Turkmenistan’s commitment to boosting its maritime capabilities and economic connectivity. The expansion significantly increased the port’s operational capacity, allowing it to handle a total of 25 million tonnes of dry cargo annually. This capacity is divided between the newly constructed section, which can process 17 million tonnes, and the original port area, which retains a handling capacity of 8 million tonnes. The augmentation of cargo handling facilities included the installation of advanced loading and unloading equipment, expanded storage areas, and improved logistical infrastructure, all designed to streamline operations and accommodate larger volumes of goods. These enhancements positioned Turkmenbashy International Seaport as one of the most capable maritime hubs on the Caspian Sea, facilitating the efficient movement of commodities such as grain, construction materials, and manufactured products. In addition to cargo throughput, the port’s expansion also addressed passenger and vehicular traffic, enabling it to accommodate up to 300,000 passengers annually. This capacity supports the growing demand for maritime travel and transport services within the region, particularly for ferry connections that link Turkmenistan to neighboring countries. The port is equipped to manage the transit of approximately 75,000 freight trucks each year, reflecting its role as a critical node in overland trade routes that intersect with maritime shipping. Furthermore, the port’s container handling capabilities were enhanced to process up to 400,000 containers annually, underscoring its importance in facilitating containerized cargo movement and integrating Turkmenistan into global supply chains. Among the key maritime services operated from Turkmenbashy International Seaport are regular ferry routes to Baku, Azerbaijan. These ferry services provide an essential transport link across the Caspian Sea, supporting both passenger travel and the movement of goods between the two countries. The ferry connection not only fosters bilateral trade and tourism but also serves as a component of broader regional transport networks that connect Central Asia with the Caucasus and beyond. The operation of these services requires the port to maintain specialized terminals and infrastructure capable of handling roll-on/roll-off vessels, ensuring efficient loading and unloading of vehicles and passengers. Beyond the general cargo and passenger terminals, the Turkmenbashy International Seaport also administers three dedicated oil loading terminals known as Kenar, Alaja, and Ekerem. These facilities are integral to Turkmenistan’s hydrocarbon export infrastructure, enabling the transfer of crude oil and petroleum products onto tankers for shipment across the Caspian Sea. Each terminal is equipped with specialized pipelines, storage tanks, and loading arms designed to safely and efficiently handle large volumes of oil. The presence of these terminals underscores the port’s dual role in supporting both general trade and the energy sector, which is a cornerstone of Turkmenistan’s economy. While Turkmenbashy International Seaport remains the country’s primary maritime hub, Turkmenistan also maintains several other seaport facilities, albeit on a more limited scale. These additional ports primarily consist of loading terminals associated with industrial factories located at Kiyanly (also spelled Gyýanly) and Garabogaz. These terminals serve specific industrial purposes, facilitating the export of products manufactured or processed at the adjacent factories. Unlike Turkmenbashy, these sites do not operate as full-service seaports and are focused on the logistical needs of their respective industrial complexes. Their existence highlights the integration of maritime infrastructure with Turkmenistan’s broader industrial and economic activities. In addition to these factory-linked terminals, Turkmenistan operates an oil loading terminal at Hazar, which stands as the country’s only other oil loading facility apart from those managed at Turkmenbashy. The Hazar terminal plays a crucial role in the export of hydrocarbons, supporting the transport of crude oil extracted from offshore and onshore fields in the Caspian region. This facility complements the oil export capacity of the Turkmenbashy terminals, providing additional throughput and logistical flexibility for the energy sector. The presence of multiple oil loading terminals along Turkmenistan’s Caspian coastline reflects the strategic importance of maritime infrastructure in the country’s efforts to develop and diversify its energy export routes.

Turkmenistan’s air transportation infrastructure comprises a network of airports that facilitate both domestic and international passenger and cargo services, reflecting the country’s strategic emphasis on connectivity and economic development. The nation is served by five major airports that provide regular domestic passenger flights, namely Ashgabat, Dashoguz, Mary, Turkmenabat, and Turkmenbashy. These airports act as critical nodes in the domestic air travel network, linking various regions of Turkmenistan and enabling efficient movement of people across the country. Ashgabat International Airport, located in the capital city, stands out as the principal hub for both domestic and international flights, offering the most extensive range of services and facilities. Dashoguz, Mary, Turkmenabat, and Turkmenbashy airports complement Ashgabat by serving regional centers, thereby enhancing accessibility to remote areas and supporting regional economic activities. In June 2021, Turkmenistan expanded its airport infrastructure by commissioning a sixth international-class airport at Kerki, situated in the Lebap Province. This new facility was designed to meet international aviation standards and was scheduled to commence regular domestic passenger service in January 2022. The establishment of Kerki International Airport reflects the government’s ongoing efforts to modernize the country’s aviation sector and improve connectivity in the eastern regions. Its commissioning aimed to alleviate congestion at existing airports and provide a more direct air link for passengers and cargo in the area, fostering regional development and integration. Apart from these six airports, a seventh airport located in Balkanabat operates exclusively for special flights rather than regular passenger services. Balkanabat Airport’s role is specialized, catering primarily to non-scheduled flights that may include government, military, or charter operations. This distinction underscores the varied functions that airports in Turkmenistan fulfill, ranging from commercial passenger transport to specialized aviation activities. The presence of such an airport in Balkanabat highlights the strategic importance of the region and the need for dedicated aviation facilities to support specific operational requirements. Under normal circumstances, Ashgabat International Airport remains the only airport in Turkmenistan offering regular international passenger flights. This exclusivity positions Ashgabat as the primary gateway for international travelers entering and leaving the country. The airport’s facilities are equipped to handle a range of international carriers and destinations, serving as a critical link between Turkmenistan and the global aviation network. The concentration of international passenger traffic at Ashgabat reflects both the city’s status as the capital and the centralization of international air services within the country’s aviation policy framework. Turkmenbashy International Airport, located on the Caspian Sea coast, primarily serves international cargo flights rather than regular passenger services. The airport has developed a reputation as a key logistics hub for freight transport, with Cargolux, a prominent international cargo airline, being the chief operator utilizing this facility. The focus on cargo operations at Turkmenbashy International Airport aligns with Turkmenistan’s strategic economic interests, particularly in facilitating the export and import of goods through air freight. This specialization supports the country’s trade ambitions and complements its broader transportation infrastructure, including maritime and rail links. The sole domestic airline operating within Turkmenistan is the state-owned Türkmen Howa Ýollary, also known internationally as Turkmenistan Airlines. As the national carrier, Türkmen Howa Ýollary holds a monopoly over domestic air travel, providing scheduled passenger and cargo services across the country’s airport network. The airline’s operations are integral to maintaining connectivity between Turkmenistan’s regions, supporting both business and tourism sectors. Turkmenistan Airlines also manages international routes, although the volume of international passenger flights remains concentrated at Ashgabat International Airport. In 2019, Turkmenistan Airlines transported approximately 12 thousand tonnes of cargo and carried 2.5 million passengers, achieving a total of 2.98 billion passenger-kilometers flown. These figures illustrate the scale of the airline’s operations and its significance within the national transportation system. The volume of passengers and cargo handled by the airline reflects steady demand for air travel and freight services in Turkmenistan, highlighting the importance of air transport in the country’s economy. The passenger-kilometer metric, which combines the number of passengers with the distance flown, provides insight into the airline’s operational reach and efficiency during that year. Beyond the major airports, several minor airports exist in smaller cities and towns within the Balkan Province, including Balkanabat, Etrek, Garabogaz, Hazar, and Jebel. These smaller facilities primarily serve regional air traffic needs, offering limited passenger services and supporting local economic activities such as oil and gas exploration, which is prominent in the province. The presence of these airports enhances regional accessibility and provides critical infrastructure for emergency services, government operations, and occasional commercial flights. Their strategic locations contribute to the overall resilience and flexibility of Turkmenistan’s air transportation network. In Mary Province, a former military airfield located at Galaýmor is planned to be converted for civil aviation use. This planned conversion represents an effort to repurpose existing military infrastructure to support civilian air travel and regional development. The adaptation of the Galaýmor airfield aims to expand the capacity for domestic flights and potentially facilitate cargo operations, thereby contributing to the diversification of the province’s transportation options. Such initiatives reflect broader trends in Turkmenistan to optimize the use of available assets in enhancing the civil aviation sector. Additional small landing strips are located at Aeroport village and Gäwers in Ahal Province, serving as auxiliary airfields that support local aviation activities. These landing strips are typically used for light aircraft operations, emergency landings, and agricultural or governmental purposes. Although they do not offer regular commercial passenger services, their existence underscores the dispersed nature of Turkmenistan’s aviation infrastructure and the importance of maintaining multiple points of access across the country. These smaller airfields contribute to the overall safety and operational flexibility of the national airspace system.

The domestic rail system in Turkmenistan is operated by Türkmendemirýollary, the state-owned company also known as Turkmen Railways. As the principal entity responsible for the management, maintenance, and development of the country’s rail infrastructure, Türkmendemirýollary oversees an extensive network that serves as a vital component of Turkmenistan’s transportation sector. The company’s operations encompass both passenger and freight services, ensuring connectivity across the nation’s major urban centers and facilitating the movement of goods within Turkmenistan and beyond its borders. The centralized control under a state-owned enterprise reflects Turkmenistan’s broader approach to strategic infrastructure management, emphasizing state oversight in key economic sectors. Despite the presence of an operational rail network, there is no scheduled international passenger rail service available in Turkmenistan. This absence of cross-border passenger trains means that travelers seeking to move between Turkmenistan and neighboring countries must rely on alternative modes of transportation such as air travel, road vehicles, or informal arrangements. The lack of international passenger rail connections may be attributed to a combination of geopolitical factors, infrastructure limitations, and the prioritization of domestic and freight rail services. Consequently, the rail system primarily serves internal mobility needs, focusing on linking cities within Turkmenistan rather than facilitating international passenger transit. Within the country, domestic passenger rail service plays a crucial role in connecting major cities and regional centers, thereby facilitating internal travel for both business and personal purposes. The rail network links key urban hubs such as Ashgabat, Turkmenabat, Mary, and Dashoguz, among others, providing an affordable and reliable means of transportation for the population. These services cater to a diverse range of passengers, including daily commuters, long-distance travelers, and those accessing remote areas that may lack extensive road infrastructure. The availability of passenger trains supports socioeconomic integration across Turkmenistan’s vast territory, enabling mobility that underpins economic activity and social cohesion. In addition to passenger services, freight rail operations constitute a significant aspect of Turkmenistan’s railway system, serving both domestic transport needs and international cargo movement. The freight network facilitates the transportation of a wide variety of goods, including industrial products, raw materials, agricultural commodities, and energy resources such as natural gas and oil derivatives. By linking production centers with ports, industrial zones, and border crossings, the railway system supports Turkmenistan’s role as a transit country in Central Asia. International freight services enable the export and import of goods, connecting Turkmenistan to regional markets and global supply chains, which is essential for the country’s economic diversification and trade expansion efforts. In 2019, Turkmenistan’s rail system transported a total of 23.8 million tonnes of freight, underscoring the substantial volume of goods moved by rail within and beyond the country. This figure reflects the importance of rail freight as a backbone of Turkmenistan’s logistics and supply chain infrastructure, accommodating a wide range of cargo types and volumes. The capacity to handle such significant freight tonnage demonstrates the operational scale of Türkmendemirýollary and its ability to meet the demands of both domestic industries and international trade partners. The freight throughput also highlights the strategic role of rail transport in supporting Turkmenistan’s economic activities, particularly in sectors reliant on bulk and heavy cargo movement. During the same year, Turkmen Railways handled 5.44 million passengers on its domestic rail network, indicating a robust level of usage by the population for internal travel. This passenger volume reflects the railway’s function as a key mode of transportation, particularly in a country characterized by vast distances and varying terrain. The number of passengers served illustrates the reliance on rail services as an accessible and cost-effective option for mobility, complementing other forms of transport such as buses and private vehicles. The sustained passenger traffic also points to the ongoing relevance of rail infrastructure in meeting the mobility needs of Turkmenistan’s citizens, contributing to regional connectivity and economic participation. The total passenger traffic volume in 2019 amounted to 2.53 billion passenger-kilometers, a metric that quantifies the extent of passenger rail usage by combining the number of passengers with the distances traveled. This substantial figure reflects not only the volume of passengers but also the average length of journeys undertaken on the rail network, highlighting the system’s capacity to facilitate long-distance travel across Turkmenistan’s expansive geography. Passenger-kilometers serve as an important indicator of the railway’s operational performance and its role in national transportation. The high volume of passenger-kilometers underscores the critical function of rail transport in linking distant regions, supporting economic integration, and providing an essential public service in Turkmenistan.

As of 2011, Turkmenistan’s road network extended over a total length of approximately 13,700 kilometers, reflecting the country’s efforts to develop its transportation infrastructure. Of this extensive network, around 12,300 kilometers were paved, indicating a substantial proportion of roads suitable for all-weather travel and heavy vehicular traffic. The predominance of paved roads facilitated more reliable and efficient transportation across various regions, which was critical for both passenger travel and freight movement. This infrastructure development played a pivotal role in connecting urban centers, rural areas, and key economic zones, thereby supporting Turkmenistan’s broader economic activities. By 2019, road transport had become the dominant mode of passenger transportation within Turkmenistan, accounting for a total of 27.1 billion passenger-kilometers. This figure represented approximately 83 percent of the country’s total passenger traffic, underscoring the centrality of road networks in daily mobility and long-distance travel for the population. The high reliance on road transport for passenger movement can be attributed to the extensive reach of the road network, which connected major cities, towns, and remote areas, offering flexibility and accessibility that other transport modes, such as rail or air, could not match. The widespread use of road transport for passengers also reflects the country’s demographic distribution and the geographic dispersion of its population. In terms of freight transportation, motor vehicles played a similarly crucial role. In 2019, trucks and other road freight vehicles transported a staggering 448.9 million tonnes of cargo across Turkmenistan, constituting 85.5 percent of the total cargo volume moved within the country. This dominant share highlights the importance of road freight in supporting Turkmenistan’s economy, particularly in sectors such as agriculture, manufacturing, and resource extraction, where timely and flexible delivery of goods is essential. The reliance on road transport for freight movement also points to the limitations or complementary nature of other transport infrastructures, such as railways or pipelines, in handling the diverse and often regionally dispersed cargo needs. Freight movement by motor vehicles was further quantified in terms of tonne-kilometers, a measure that combines the weight of cargo transported and the distance covered. In 2019, motor vehicles accounted for 14.2 billion tonne-kilometers, indicating not only the volume of goods moved but also the extensive distances over which these goods were transported. This metric reflects the logistical challenges and the geographic scale of freight operations within Turkmenistan, where goods often need to be moved across vast stretches of territory to reach domestic markets or international borders. The high tonne-kilometer figure underscores the critical role of road transport in linking production centers with consumption areas and export points. Among the key components of Turkmenistan’s road infrastructure is the M37 highway, a major arterial route that serves as a vital corridor for both domestic and international traffic. The M37 highway connects the seaport city of Türkmenbaşy, located on the Caspian Sea, with the border town of Farap, which lies adjacent to Uzbekistan. This highway facilitates the movement of goods and passengers between Turkmenistan’s maritime gateway and its northeastern neighbor, thereby supporting trade and regional integration. The strategic importance of the M37 highway lies in its function as a backbone for east-west transit across the country, linking ports, industrial centers, and border crossings in a continuous corridor. Another principal route within the national road network is the Ashgabat-Dashoguz Highway, which links the capital city, Ashgabat, situated in the south, with Dashoguz in the northern part of the country. This highway plays a crucial role in connecting two of Turkmenistan’s most significant urban centers, facilitating economic activity, administrative coordination, and social interaction between the northern and southern regions. The Ashgabat-Dashoguz Highway supports the movement of passengers and freight, contributing to regional development and integration within Turkmenistan. Its maintenance and modernization are essential for sustaining the flow of goods and people across the diverse landscapes that characterize the country. The P-7 highway is another significant roadway within Turkmenistan’s transport network, serving as an important international corridor. This highway connects the M37 highway at the city of Tejen with the border crossing at Sarahs, which leads into Iran. The P-7 facilitates cross-border trade and travel between Turkmenistan and Iran, enhancing economic ties and regional connectivity. Given its role in linking major routes and international borders, the P-7 highway is integral to Turkmenistan’s efforts to diversify its trade routes and strengthen its position within Central Asia’s transport and logistics networks. The highway’s condition and capacity directly impact the efficiency of goods and passenger movement between the two countries, influencing bilateral commerce and cooperation.

The financial system of Turkmenistan has historically operated under full state control, embodying a centralized approach to the management of economic resources. This structure reflects the country’s broader economic model, which emphasizes state ownership and oversight across key sectors. The banking system, in particular, experienced significant contraction following the 1998 financial crisis, which led to a reduction in the number of operational banks. As a result, the banking landscape currently consists of nine national banks, each playing a distinct role within the state-directed financial framework. Among these institutions is Rysgal Bank, which stands out as a nominally private entity. Despite its private designation, Rysgal Bank is owned by the Union of Industrialists and Entrepreneurs, an organization closely linked to the state apparatus. This ownership structure illustrates the limited scope for truly private banking operations within Turkmenistan’s predominantly state-controlled economy. Another notable institution is the Turkmen-Turkish Bank, which functions as a joint venture between Dayhan Bank, a domestic financial institution, and Ziraat Bankası, a Turkish state-owned bank. This partnership represents one of the few instances of international cooperation within Turkmenistan’s banking sector, reflecting a cautious approach to foreign participation. The organizational structure and division of responsibilities within Turkmenistan’s banks largely mirror the Soviet-era system, a legacy that continues to influence operational practices and regulatory oversight. The Central Bank of Turkmenistan plays a pivotal role in supervising these institutions, ensuring compliance with state directives and maintaining control over monetary policy. This centralized oversight extends to lending activities, which have traditionally been limited in scope. Historically, lending operations and household savings have constituted minor functions within the banking system, with the overwhelming majority of credit directed toward state enterprises. For example, in 2005, an estimated 95 percent of loans were extended to state-owned firms, underscoring the banks’ primary role in supporting government economic initiatives rather than serving private consumers or small businesses. Foreign banking presence in Turkmenistan remains limited but strategically significant. Two foreign bank branches operate in the capital city of Ashgabat: the National Bank of Pakistan and Iran Saderat Bank. These institutions provide retail banking services, catering to both local and expatriate populations, and facilitate international financial transactions. In addition to these retail-focused foreign banks, two German banks—Deutsche Bank and Commerzbank—maintain offices in Ashgabat that offer institutional banking services. Their presence highlights Turkmenistan’s selective engagement with global financial markets, primarily through institutional rather than consumer banking channels. As of 1 January 2021, the total assets held by all banks in Turkmenistan amounted to 135.8 billion manats, reflecting the scale of the country’s banking sector within its controlled economic environment. Individual deposits accounted for 3.3 billion manats of this total, divided into 2.8 billion manats in demand deposits and 437 million manats in time deposits. This distribution indicates a preference among depositors for liquidity and immediate access to funds, consistent with the limited development of long-term savings instruments in the domestic market. Business deposits represented a substantially larger portion of banking liabilities, totaling 39.1 billion manats. These were further segmented into 14.6 billion manats held as demand deposits and a significantly higher 53.7 billion manats in time deposits. The composition of business deposits reveals the diverse nature of corporate banking relationships in Turkmenistan. State-owned firms held the largest share, with deposits amounting to 32.5 billion manats, reflecting their dominant role in the national economy. Privately owned firms accounted for 21.1 billion manats in deposits, while individual unincorporated entrepreneurs contributed 7.9 billion manats. This breakdown illustrates the relative scale and banking engagement of different economic actors within the country. Credit extension by Turkmen banks has shown a pattern of steady growth in recent years. In 2019, total credit extended to individuals, firms, and organizations reached 84.1 billion manats, marking an increase from 76.3 billion manats in 2018 and 69.2 billion manats in 2017. This upward trend indicates an expanding role for banks in financing economic activity, albeit within the constraints of the state-controlled system. A significant portion of this credit was denominated in the national currency, the Turkmen manat, with 60.9 billion manats in 2019, 52.1 billion manats in 2018, and 46.7 billion manats in 2017. The predominance of manat-denominated loans underscores the Central Bank’s efforts to maintain monetary sovereignty and reduce reliance on foreign currencies in domestic lending.

Turkmenistan’s financial sector employs a variety of national plastic card systems that serve as the primary instruments for cashless transactions within the country. Among these, the Milli Kart, Altyn Asyr, and Turkmen Kart stand out as the most widely used domestic payment cards. These cards were developed to facilitate secure and convenient electronic payments across multiple sectors, reflecting the government’s efforts to modernize the country’s payment infrastructure and reduce reliance on cash. The introduction and expansion of these national card systems have played a pivotal role in enhancing the accessibility of banking services to a broad segment of the population, thereby supporting the country’s broader economic modernization goals. In 2023, the Central Bank of Turkmenistan reported that the total number of bank cards issued within the country had surpassed 5,177,000 units. This figure underscores the rapid growth and widespread adoption of card-based payment methods among Turkmen citizens. The increasing card issuance reflects both the expansion of banking services into previously underserved areas and the growing consumer preference for electronic payments. The proliferation of bank cards has also been supported by the government’s initiatives to digitize the economy and improve the efficiency of financial transactions, which are crucial for stimulating domestic commerce and integrating Turkmenistan more fully into the global financial system. Several banks in Turkmenistan have introduced cashback services as an incentive to encourage the use of bank cards for everyday transactions. Notably, Halkbank, Daykhanbank, Rysgal Bank, Senagat Bank, Turkmenbashi Bank, Turkmenistan Bank, and the Turkmen-Turkish Joint-Stock Commercial Bank offer cashback rewards to their customers. These programs typically provide cashback percentages ranging from 2% to 3%, which serve as a financial incentive for consumers to prefer card payments over cash. By offering such benefits, these banks aim to increase cardholder engagement, boost transaction volumes, and foster customer loyalty. Cashback rewards also contribute to a broader culture of electronic payments, which is essential for the modernization of the country’s financial infrastructure. Bank cards in Turkmenistan are highly versatile, extending beyond conventional retail purchases to encompass a wide range of payment functions. Cardholders can use their bank cards to settle fees at healthcare institutions, pay utility bills, and cover communication services such as Internet subscriptions. Additionally, these cards facilitate the purchase of transportation tickets, including railway, bus, and air travel. This broad functionality reflects the integration of banking services into everyday life and public services, making electronic payments a convenient and practical option for a variety of needs. The ability to use bank cards across multiple sectors supports the government’s objective of creating a cashless economy and improving the efficiency of public service payments. A significant milestone in Turkmenistan’s payment technology was the introduction of contactless payment systems in 2019. This innovation marked a notable advancement in the country’s payment methods, aligning Turkmenistan with global trends in financial technology. Contactless payments enable faster, more secure transactions by allowing users to simply tap their cards or compatible devices on payment terminals without the need for PIN entry or physical contact. The adoption of this technology has improved the speed and convenience of retail transactions, contributing to enhanced consumer experience and operational efficiency. Since its introduction, contactless payment technology has gradually expanded across various sectors, further embedding electronic payments into the fabric of the Turkmen economy. By 2023, Turkmenistan had developed a substantial infrastructure to support card-based payments, with a total of 2,144 Automated Teller Machines (ATMs) and 42,131 bank payment terminals deployed nationwide. The extensive network of ATMs facilitates cash withdrawals and other banking services, while the widespread presence of payment terminals enables merchants and service providers to accept card payments conveniently. This infrastructure underpins the country’s efforts to promote electronic payments and reduce cash dependency. The deployment of such a large number of terminals also indicates the increasing acceptance of card payments among businesses and consumers, which is essential for sustaining the growth of the digital economy. Digital banking services have seen significant uptake in Turkmenistan, as evidenced by the number of registered users for Internet Bank and Mobile Bank platforms. In 2023, the Internet Bank service had 932,730 registered users, reflecting a strong preference for online banking among the population. Meanwhile, the Mobile Bank service had 60,654 users, indicating the gradual adoption of mobile-based financial management tools. These digital platforms provide customers with convenient access to banking services, including account management, bill payments, and fund transfers, from remote locations. The growth in digital banking users demonstrates the successful integration of technology into the country’s financial system and highlights the potential for further innovation in electronic financial services. Turkmen banks have the capacity to issue internationally recognized payment cards, including those affiliated with Visa, MasterCard, and Maestro networks. This capability enables Turkmen citizens to access global financial services and participate in international commerce more easily. The issuance of such cards aligns with the country’s broader goals of financial integration and modernization, allowing domestic banks to offer products that meet international standards. These internationally accepted cards facilitate cross-border transactions, enhance consumer convenience, and provide access to a wide range of financial services beyond the national market. Citizens of Turkmenistan who hold MasterCard and Visa cards supported by international payment systems benefit from the ability to perform non-cash payments and withdraw cash from ATMs abroad. This functionality is crucial for facilitating international financial transactions, whether for business, travel, or personal purposes. The ability to use these cards globally underscores the importance of Turkmenistan’s connection to the international banking network and provides cardholders with financial flexibility and security when outside the country. This international acceptance also reflects the trust and recognition of Turkmen banks within the global payment ecosystem, contributing to the country’s economic openness and integration.

In 2019, Turkmenistan’s agricultural sector produced approximately 1.5 million tons of wheat, establishing it as the largest crop by volume for that year. Wheat cultivation occupied the greatest area of agricultural land, with 761 thousand hectares planted, reflecting its central role in the country’s food production and agrarian economy. Cotton followed as the second most significant crop, with a production volume of 582 thousand tons and an area planted of 551 thousand hectares, underscoring its importance as a cash crop and export commodity. Other notable agricultural outputs in 2019 included 356 thousand tons of tomatoes, 315 thousand tons of potatoes, and 263 thousand tons of watermelons, indicating a diverse range of horticultural production alongside staple grains and fiber crops. Further expanding the spectrum of agricultural products, Turkmenistan produced 246 thousand tons of grapes and 245 thousand tons of sugar beet in 2019. Sugar beet cultivation is particularly significant as it serves as a raw material for the production of sugar and ethanol, thus contributing to both the food industry and energy sectors. Additional crop yields for the same year comprised 130 thousand tons of rice, 74 thousand tons of onions, 71 thousand tons of carrots, 66 thousand tons of apples, and 34 thousand tons of apricots, alongside various other fruits and vegetables. This range of outputs highlights the country’s efforts to cultivate a variety of crops, supporting both domestic consumption and potential export markets. The early 2000s marked a period during which the state-run agricultural sector’s contribution to Turkmenistan’s gross domestic product (GDP) increased under close government supervision. This growth was driven by intensified state control and investment in agriculture, reflecting the government’s prioritization of food security and economic stability. Since the dissolution of the Soviet Union, the area planted to grains, predominantly wheat, has nearly tripled, signifying a substantial expansion in cereal cultivation aimed at reducing reliance on imports and achieving greater self-sufficiency. Despite these expansions, the majority of agricultural land in Turkmenistan is characterized by poor soil quality and arid conditions, necessitating extensive irrigation to achieve productive use. The country’s irrigation infrastructure and water-use policies have historically struggled to meet the demands of agricultural land, especially in regions distant from natural water sources such as rivers. The Karakum Canal, which transports water from the Amu Darya River across Turkmenistan to areas near Bereket, serves as the primary irrigation source for these remote agricultural zones. However, the canal has been described as decrepit, indicating aging infrastructure and inefficiencies that limit its effectiveness in supporting large-scale irrigation. In an effort to improve water availability and irrigation efficiency, the Dostluk Dam was inaugurated in 2005 at Sarahs, near the border with Iran. This dam has contributed to increased irrigation water supplies, enhancing agricultural productivity in its vicinity. Furthermore, plans have been proposed to construct a similar dam on the Atrek River, which would further augment irrigation capacity and support the expansion of irrigated agriculture in the region. These infrastructural developments underscore the government’s recognition of water resource management as a critical factor in sustaining agricultural growth. The 2020 agricultural season saw Turkmenistan produce approximately 1.5 million tons of raw cotton, maintaining the crop’s status as a key agricultural product. Prior to October 2018, Turkmenistan exported raw cotton to a diverse array of countries, including Russia, Iran, South Korea, the United Kingdom, China, Indonesia, Turkey, Ukraine, Singapore, and the Baltic states. This broad export market reflected the global demand for Turkmen cotton and the country’s role as a supplier in international textile supply chains. However, following the imposition of a ban on raw cotton exports in October 2018, the Turkmen government shifted its export strategy toward value-added products such as cotton yarn, finished textiles, and garments. This policy change aimed to increase domestic processing and industrialization within the textile sector, thereby capturing greater economic value from cotton production. The cultivation of fruits and vegetables in Turkmenistan is predominantly undertaken by private farmers, who are chiefly responsible for producing crops such as tomatoes, watermelons, grapes, and onions. This private sector involvement contrasts with the state-controlled production of the main cash crops—grain and cotton—where all stages of production remain under government oversight. The dual structure reflects a broader agricultural policy framework in which staple and export crops are centrally managed to ensure strategic economic objectives, while horticultural production benefits from private initiative and market responsiveness. The agricultural sector has faced significant challenges, as evidenced by the grain crop failures of 2006, which precipitated widespread bread shortages and the reinstatement of a rationing system across most regions of Turkmenistan. These failures were attributed to systemic issues, including a culture of falsifying output figures and poor administration within the agricultural sector. Such mismanagement undermined food security and exposed vulnerabilities in the state’s capacity to accurately assess and respond to production shortfalls. Since 2018, independent media reports have highlighted ongoing food shortages in Turkmenistan, with hundreds of people reportedly queuing for hours to purchase bread and flour. These accounts contrast sharply with official government statements that have consistently indicated good harvests and stable food supplies. Independent sources have attributed the low agricultural output to factors such as drought conditions and continued mismanagement, suggesting that environmental stresses and governance challenges persistently affect the sector. The reappearance of flour and bread shortages, as documented by these reports, underscores the fragility of food security in Turkmenistan despite official assurances to the contrary. Collectively, these dynamics illustrate the complexities of Turkmenistan’s agricultural economy, which balances state control with private enterprise, grapples with infrastructural and environmental constraints, and navigates the challenges of achieving food self-sufficiency amid fluctuating production and market conditions. The government’s ongoing efforts to diversify crop production and improve irrigation infrastructure reflect strategic priorities aimed at enhancing agricultural productivity and economic resilience.

Since gaining independence, the government of Turkmenistan has prioritized the modernization of its agricultural sector through substantial investments in the importation of advanced agricultural machinery. Recognizing the critical role of mechanization in improving productivity and efficiency, the state allocated significant funds to acquire a diverse array of equipment, including tractors, harvesters, and various agricultural implements. This strategic focus aimed to transition the country’s predominantly traditional farming practices toward more technologically sophisticated methods, thereby enhancing crop yields and supporting the broader national economy. The modernization efforts reflected Turkmenistan’s commitment to developing a self-sufficient agricultural industry capable of meeting both domestic food demands and export goals. By 2012, the mechanization of Turkmenistan’s agriculture had reached a notable scale, with the country utilizing approximately 7,000 tractors and 5,000 cotton cultivators. In addition to these, around 2,200 seeders and a variety of other agricultural machines were actively employed across the nation’s farms. The majority of this machinery was sourced from Belarus and the United States, countries known for their robust agricultural equipment manufacturing industries. The reliance on Belarusian and American machinery underscored Turkmenistan’s strategic partnerships and procurement policies aimed at securing reliable, high-quality equipment suited to the country’s specific agricultural conditions. This diverse fleet of machinery played a pivotal role in mechanizing key agricultural processes such as soil cultivation, planting, and harvesting, particularly in the cultivation of cotton and grain crops. The introduction of Western agricultural equipment into Turkmenistan marked a significant milestone in the country’s mechanization journey. In 1994, American companies John Deere and Case IH began selling farm machinery within Turkmenistan, thereby introducing advanced Western technology to the local agricultural market. This development represented a departure from the Soviet-era reliance on equipment primarily produced within the former Soviet Union and its allied states. The entry of John Deere and Case IH brought modern innovations in tractor and harvester design, offering Turkmen farmers access to machinery characterized by improved efficiency, durability, and operator comfort. These companies’ presence also facilitated knowledge transfer and technical training, further supporting the country’s agricultural modernization objectives. A major advancement in Turkmenistan’s grain production mechanization occurred in 2011 with the introduction of Claas combines for grain harvesting. Claas, a German manufacturer renowned for its cutting-edge combine harvesters, provided technology that significantly enhanced the efficiency and effectiveness of grain harvesting operations. The deployment of Claas combines represented a strategic investment in mechanized grain production, enabling faster harvesting times, reduced labor requirements, and minimized crop losses during the harvest period. This development was particularly important for Turkmenistan’s efforts to increase grain output and improve food security, as mechanized harvesting is critical to managing large-scale grain production in the country’s arid and semi-arid agricultural zones. Belarus tractors have maintained a prominent position in Turkmenistan’s agricultural machinery landscape since the Soviet era. These tractors remain popular among Turkmen farmers due to their competitive pricing and the extensive familiarity of the local agricultural community with this product line. The longstanding use of Belarus tractors has fostered a well-established maintenance and repair infrastructure within the country, facilitating their continued operational reliability and cost-effectiveness. This familiarity also reduces the learning curve for operators and technicians, making Belarus tractors a practical and accessible choice for many farms. Despite the influx of Western machinery, the sustained preference for Belarus tractors highlights the importance of affordability and local expertise in the country’s agricultural mechanization strategy. In addition to machinery sourced from Belarus and the United States, Turkmenistan also imports cotton harvesters from neighboring Uzbekistan. This diversification of agricultural machinery sources reflects Turkmenistan’s efforts to optimize its equipment procurement by leveraging regional manufacturing capabilities. Uzbekistan’s cotton harvesters are well-suited to the specific requirements of cotton cultivation in Central Asia, offering machinery that is adapted to the climatic and soil conditions prevalent in the region. The importation of Uzbek cotton harvesters complements the existing fleet of machinery and provides Turkmenistan with additional options for mechanized cotton harvesting, thereby enhancing the resilience and flexibility of its agricultural operations. Between 2017 and 2020, Claas significantly expanded its presence in Turkmenistan by delivering a total of 1,000 Tucano 420 grain combines, 800 Axion 850 plowing tractors, and 1,550 Axos 340 tractors. These deliveries represented a substantial enhancement of the country’s mechanized farming capacity, equipping Turkmenistan with some of the most advanced agricultural machinery available on the market. The Tucano 420 combines are known for their high harvesting performance and adaptability to various crop types, while the Axion 850 and Axos 340 tractors offer powerful and efficient solutions for soil preparation and other field operations. This large-scale acquisition underscored Turkmenistan’s ongoing commitment to modernizing its agricultural sector through the adoption of cutting-edge technology, which in turn supports increased productivity and sustainability in farming practices. During the 2017 and 2018 crop years, John Deere supplied Turkmenistan with 440 Model 9970 cotton harvesters, followed by an additional 600 units delivered between 2019 and 2020. These deliveries reflected a continued investment in advanced cotton harvesting technology, aimed at improving the efficiency and quality of cotton production in the country. The Model 9970 harvesters are equipped with state-of-the-art features designed to maximize harvesting speed and minimize crop damage, thereby enhancing both yield and fiber quality. The sustained procurement of these machines from John Deere demonstrated Turkmenistan’s strategic focus on mechanizing its cotton industry, which is a critical sector of the national economy. This ongoing modernization effort contributed to the country’s ability to maintain competitive cotton production in the global market while supporting rural employment and economic development.

Between 2015 and 2019, Turkmenistan experienced notable fluctuations in its export values, measured in millions of US dollars. In 2015, the country’s exports reached a peak of 12,164.0 million USD, but this figure sharply declined to 7,520.1 million USD in 2016. The subsequent year, 2017, saw a slight recovery with exports increasing to 7,787.9 million USD. This upward trend continued more robustly in 2018, when export values surged to 11,650.9 million USD, before experiencing a modest decrease to 11,103.8 million USD in 2019. These variations reflected a combination of global market conditions, commodity price shifts, and evolving trade relationships during the period. Concurrently, Turkmenistan’s import values demonstrated a consistent downward trajectory over the same five-year span. Imports were valued at 14,051.4 million USD in 2015, followed by a slight decline to 13,176.8 million USD in 2016. The reduction became more pronounced in 2017, with imports falling to 10,188.6 million USD. This downward trend accelerated in 2018, when import values dropped sharply to 5,322.9 million USD, and remained relatively stable in 2019 at 5,831.7 million USD. The significant contraction in imports during this period can be attributed to various factors, including adjustments in domestic demand, currency fluctuations, and shifts in trade policy. The cornerstone of Turkmenistan’s export economy is its abundant natural gas reserves, which constitute the principal export commodity. The majority of Turkmen natural gas exports are transported via pipelines to China, reflecting a strategic partnership that has become increasingly significant since the early 2010s. Smaller quantities of natural gas are exported to Russia, maintaining historical trade ties from the Soviet era. Additionally, Turkmenistan engages in a swap arrangement involving natural gas delivered through Iran to Azerbaijan, a mechanism that facilitates regional energy distribution and optimizes pipeline infrastructure utilization. This diversified export strategy underscores Turkmenistan’s role as a key natural gas supplier in Central Asia and beyond. In addition to pipeline exports, Turkmenistan also exports liquid petroleum gas (LPG) to neighboring Afghanistan, utilizing road and rail transport. This mode of delivery caters to Afghanistan’s energy needs and represents an important aspect of Turkmenistan’s trade relations with its southern neighbor. The export of LPG by land routes complements the country’s broader energy export portfolio and reflects efforts to diversify export channels beyond pipeline infrastructure. Data from Chinese Customs illustrates the volatility in Turkmenistan’s natural gas export revenues. In 2019, the value of Chinese imports of natural gas from Turkmenistan stood at approximately US$8.69 billion. However, this figure declined sharply to about US$6.07 billion in 2020. The reduction was primarily attributed to a combination of decreased import volumes and a global decline in hydrocarbon prices during that period. This downturn highlights the sensitivity of Turkmenistan’s export earnings to fluctuations in both demand and international commodity markets, particularly in its largest export destination. Crude oil and refined petroleum products also represent a significant component of Turkmenistan’s export economy. In 2019, these products accounted for approximately US$3 billion in export value. This segment of the energy sector complements the natural gas exports and contributes substantially to the country’s foreign exchange earnings. The oil and petroleum product exports reflect Turkmenistan’s efforts to leverage its hydrocarbon resources beyond natural gas, tapping into global markets for crude and refined fuels. Beyond hydrocarbons, Turkmenistan’s export portfolio includes cotton textiles, which held a value of US$123.6 million in 2019. The textile industry has historically been an important sector for Turkmenistan, given its extensive cotton cultivation. The export of cotton textiles demonstrates the country’s attempts to diversify its export base and develop value-added industries. Although smaller in scale compared to energy exports, the textile sector remains a vital contributor to employment and foreign trade. In terms of imports, Turkmenistan’s major categories in 2019 encompassed a range of industrial and consumer goods essential for domestic consumption and economic development. Machinery imports were the largest category, valued at US$1.5 billion, reflecting the country’s ongoing need for equipment to support infrastructure projects, manufacturing, and energy extraction. Base metals followed closely, with imports totaling US$968.3 million, underscoring the demand for raw materials in construction and industrial activities. Chemicals constituted another significant import category, valued at US$682.3 million, indicating the importance of inputs for agriculture, manufacturing, and other sectors. Vehicle imports amounted to US$453.5 million, supporting transportation and logistics needs, while plastic and rubber products, valued at US$342.9 million, catered to various industrial and consumer applications. Collectively, these imports illustrate Turkmenistan’s reliance on foreign goods to sustain its economic growth and modernization efforts. In March 2023, the Turkmenistan parliament enacted legislation adopting the Harmonized System (HS) of tariff nomenclature. This legislative move aimed to standardize the classification of goods for customs and trade purposes, aligning Turkmenistan’s tariff system with international norms. The adoption of the HS nomenclature facilitates more efficient trade administration, enhances transparency, and supports integration into the global trading system. By implementing this system, Turkmenistan sought to improve customs procedures, reduce trade barriers, and promote foreign investment, thereby strengthening its position in international commerce.

In 2019, the labor force in Turkmenistan comprised 666,500 employees engaged in large- and medium-sized enterprises, reflecting the scale of formal employment within the country’s industrial and commercial sectors. Alongside these workers, there were 103,900 individuals employed in non-state enterprises, a category that encompasses private businesses, mixed public-private ventures, and foreign-owned companies. This distribution highlights the coexistence of state-controlled and emerging private sectors within the Turkmen economy, illustrating a gradual diversification of employment beyond traditional state enterprises. The presence of foreign-owned enterprises and joint ventures further indicates Turkmenistan’s efforts to attract external investment and integrate into broader economic networks. The employment structure in 2019 was characterized by a complex composition of various ownership forms and organizational types. Specifically, 25.3% of the workforce was employed in the state sector, underscoring the continued importance of government-controlled enterprises in the national economy. The private sector accounted for the largest share, employing 50.3% of workers, which points to significant growth in private business activities and entrepreneurship. Mixed public-private enterprises provided jobs for 22.0% of employees, reflecting collaborative economic models that combine state oversight with private investment. Smaller proportions of the workforce were engaged in public associations (0.2%) and cooperatives (0.4%), sectors traditionally associated with collective ownership and community-based economic activity. Foreign-owned enterprises, including joint ventures, employed 1.8% of the labor force, demonstrating a modest but notable role of international capital in Turkmenistan’s labor market. Official statistics from 2019 also revealed that 77,474 individuals were employed by individual entrepreneurs, a category that includes self-employed persons and small-scale business operators. This segment of the labor market represents a growing trend toward informal or semi-formal economic activity, where individuals operate independently or in small groups outside the framework of larger enterprises. The rise in individual entrepreneurship reflects broader economic reforms aimed at fostering private initiative and reducing reliance on state employment, although it also points to challenges related to labor market regulation and social protection for these workers. The distribution of employment across economic sectors in 2019 illustrated the structural composition of Turkmenistan’s economy and its labor demands. Agriculture remained the dominant sector, employing 43.5% of the workforce, which underscores the country’s reliance on farming, livestock, and related rural activities. Manufacturing accounted for 9.8% of employment, indicating the presence of industrial production, albeit on a smaller scale relative to agriculture. Education employed 8.4% of workers, reflecting the state’s investment in human capital development and the public sector’s role as a major employer. Trade and vehicle repair services engaged 7.4% of the labor force, highlighting the importance of commerce and maintenance services in the economy. Construction, a sector often linked to infrastructure development and urbanization, employed 5.8% of workers, while transport and storage accounted for 4.3%, indicating the role of logistics and mobility in supporting economic activities. Health and social work employed 3.6% of the labor force, reflecting public health services and social welfare functions. Finally, arts and entertainment sectors engaged 2.9% of workers, pointing to cultural and recreational industries within the economy. The average monthly wage in Turkmenistan experienced significant growth over the early 21st century, reflecting both inflationary pressures and efforts to improve living standards. In 2007, the average wage stood at 507 manats, a figure that nearly doubled to 943.40 manats by 2012. This upward trend continued, with the average monthly wage reaching 1,685.10 manats in 2019. Such increases suggest a combination of nominal wage growth and possible improvements in productivity or government wage policies. However, these figures must be contextualized within the broader economic environment, including inflation rates, cost of living, and the distribution of income across different sectors and regions. Going back to 2004, the labor force in Turkmenistan was estimated to include more than 2.3 million workers, providing a baseline for understanding subsequent employment trends. At that time, nearly half of the workforce—48.2%—was employed in agriculture, reaffirming the sector’s central role in the economy. Services accounted for 37.8% of employment, encompassing a range of activities such as trade, education, health, and public administration. Industry and construction together employed 14% of workers, reflecting the relatively smaller but strategically important industrial base and infrastructural development efforts underway during that period. The predominance of the state in the economy was particularly evident in 2004, when approximately 90% of workers were effectively state employees. This overwhelming state dominance shaped labor relations, wage structures, and employment stability, as most workers were engaged in government-run enterprises or institutions. Such a labor market structure limited the scope for private sector growth and entrepreneurship, while creating a dependency on state employment for livelihood and social benefits. Beginning in 2003, the government initiated a process of workforce downsizing aimed at reducing the size of the public sector. This policy shift was part of broader economic reforms intended to increase efficiency and encourage private sector development. However, the downsizing also had significant social consequences, as it is believed to have contributed to rising unemployment levels in subsequent years. The reduction in government employment opportunities created challenges for displaced workers, many of whom faced difficulties transitioning to private sector jobs or self-employment. By 2014, unemployment in Turkmenistan was estimated at 11%, a figure that contrasted with the traditionally low official unemployment rates reported by the government. This estimate reflected growing labor market pressures and the impact of structural economic changes, including workforce downsizing and shifts in sectoral employment. The official statistics, however, often portrayed a more optimistic picture, with reported unemployment rates remaining below 4%, highlighting discrepancies between independent assessments and government data. In recent years, the economic downturn triggered by falling hydrocarbon prices has had a profound impact on Turkmenistan’s labor market. The country’s heavy reliance on natural gas exports made it vulnerable to global commodity price fluctuations, leading to economic contraction and reduced public revenues. As a result, unemployment estimates have risen dramatically, with some analyses suggesting rates as high as 60%. This stark contrast with official government figures, which continue to report unemployment rates below 4%, points to ongoing challenges in labor market transparency, data reliability, and the capacity of the economy to absorb displaced workers. The high unofficial unemployment rates underscore the need for structural reforms to diversify the economy and create sustainable employment opportunities beyond the hydrocarbon sector.

Between 1994 and the end of 2020, Turkmenistan undertook a significant program of privatization, resulting in the transfer of ownership of 2,628 former state-owned properties to private hands, according to official government statistics. This extensive privatization effort was part of the country’s broader economic reforms aimed at transitioning from a centrally planned economy to a more market-oriented system. The properties that were privatized spanned a wide range of sectors, reflecting the diverse structure of the Turkmen economy. Among these, the wholesale and retail trade sector, including vehicle repair services, accounted for the largest share, with 845 enterprises privatized. This emphasis on trade and repair services highlights the government’s focus on stimulating private sector activity in areas that directly affect consumer goods and services. Manufacturing enterprises were also a notable component of the privatization program, with 143 such entities transferred to private ownership. This sector includes various production facilities that contribute to the industrial base of the country, encompassing the processing of raw materials and the production of finished goods. Real estate operations constituted another key category, with 108 enterprises privatized, reflecting efforts to encourage private investment in property management, development, and related services. The agricultural sector, including forestry and fisheries, saw 95 enterprises privatized, which is significant given Turkmenistan’s reliance on agriculture for both domestic consumption and export. This move aimed to enhance efficiency and productivity in the primary sector by introducing private management and investment. Transportation and storage services also featured in the privatization process, with 51 enterprises transferred to private control. This sector is critical for the movement of goods and people within the country and for maintaining supply chains. Construction enterprises numbered 27 in the privatization tally, indicating a more cautious approach in this capital-intensive and strategically important industry. The hospitality industry, comprising hotels and related services, saw 18 enterprises privatized, which aligns with efforts to develop tourism and improve service quality. The largest single category, however, was “other services,” which included 1,341 enterprises. This broad classification encompasses a variety of service-oriented businesses that support the overall economy and daily life, indicating a widespread dispersal of privatization beyond the core industrial and commercial sectors. In March 2021, a notable development occurred when President Gurbanguly Berdimuhamedow issued a directive to convert the Derýaýollary Production Association into an open joint-stock company. The Derýaýollary Production Association operates as a subordinate unit under the State Service of Maritime and River Transportation of Turkmenistan, known locally as Türkmendeňizderýaýollary. This state agency is responsible for overseeing river and canal transport within the country, managing a critical component of Turkmenistan’s inland waterway infrastructure. The conversion of the association into an open joint-stock company represented a strategic move to introduce corporate governance structures and potentially attract investment, while maintaining state oversight. This transformation was part of a broader trend to modernize state enterprises and improve efficiency through partial corporatization, although full privatization was not pursued in this case. Despite these extensive privatization efforts, one significant aspect of Turkmenistan’s economic framework remained unchanged: all land within the country continues to be owned by the government. This policy maintains the status quo inherited from the Soviet era, where land was considered state property and could not be privately owned or sold. The retention of state ownership of land reflects a cautious approach to economic reform, balancing the introduction of private enterprise with centralized control over key national resources. This arrangement has important implications for investment, development, and property rights, as private entities operate on land leased or otherwise controlled by the state rather than holding freehold title. Consequently, while privatization has expanded the role of private business in many sectors, the government’s monopoly on land ownership remains a fundamental characteristic of Turkmenistan’s economic system.

The Turkmenistan government provided a comprehensive set of official economic indicators for the period spanning from 1993 to 2020 to the International Monetary Fund (IMF). These indicators encompassed a variety of key metrics, including gross domestic product (GDP) measured in billion US dollars at purchasing power parity (PPP), GDP per capita in US dollars at PPP, nominal GDP in billion US dollars, the real GDP growth rate, the inflation rate expressed as a percentage, and government debt as a percentage of GDP. This data series offers a longitudinal perspective on Turkmenistan’s macroeconomic performance over nearly three decades, reflecting the country’s economic trajectory during its post-Soviet transition and subsequent development phases. In 1993, Turkmenistan’s economy was characterized by a GDP of 10.9 billion US dollars PPP, while the GDP per capita stood at 2,975 US dollars PPP. The nominal GDP for the same year was reported at 15.9 billion US dollars. However, the country faced significant economic challenges, as evidenced by a real GDP growth rate of negative 10.0 percent, indicating a substantial contraction in economic output. Inflation was extraordinarily high, reaching 3,102.4 percent, signaling severe macroeconomic instability and hyperinflationary pressures in the immediate post-independence period. Data on government debt for 1993 was not provided, leaving the fiscal position during this initial phase less clear. By 1995, the economic situation had further deteriorated, with GDP declining to 8.9 billion US dollars PPP and GDP per capita dropping to 2,070 US dollars PPP. The nominal GDP also decreased to 12.7 billion US dollars. The real GDP growth rate remained negative at minus 7.2 percent, reflecting continued economic contraction. Inflation, although reduced from the previous hyperinflationary peak, remained extremely high at 1,005.2 percent, indicating persistent instability in price levels. Similar to 1993, government debt data for 1995 was not available, which limited comprehensive fiscal analysis for this period. The turn of the millennium marked a notable shift in Turkmenistan’s economic indicators. In 2000, GDP increased to 11.6 billion US dollars PPP, and GDP per capita rose to 2,554 US dollars PPP. The nominal GDP was recorded at 16.8 billion US dollars. The real GDP growth rate surged dramatically to 18.6 percent, signaling a robust economic recovery and expansion phase. Inflation dropped significantly to 23.6 percent, reflecting a stabilization of the monetary environment and improved macroeconomic management. Government debt was reported at 44 percent of GDP, indicating a relatively high fiscal leverage at the time, which may have been a legacy of the economic difficulties experienced in the previous decade. By 2005, Turkmenistan’s economy had more than doubled in size compared to the year 2000, with GDP reaching 27.5 billion US dollars PPP and GDP per capita climbing to 5,755 US dollars PPP. The nominal GDP increased substantially to 39.9 billion US dollars. The real GDP growth rate remained strong at 13.0 percent, demonstrating sustained economic expansion. Inflation had decreased further to 10.7 percent, suggesting continued macroeconomic stabilization and improved control over price levels. Government debt fell sharply to 5 percent of GDP, reflecting a significant reduction in fiscal vulnerabilities and an enhanced fiscal position. Between 2006 and 2008, Turkmenistan’s GDP continued its upward trajectory, rising from 31.4 billion US dollars PPP in 2006 to 41.9 billion US dollars PPP in 2008. Correspondingly, GDP per capita increased from 6,509 to 8,478 US dollars PPP over the same period. Nominal GDP also grew from 45.6 billion US dollars to 60.9 billion US dollars. Real GDP growth rates during these years ranged between 11.0 percent and 14.7 percent, indicating robust economic performance. Inflation fluctuated between 6.3 percent and 14.5 percent, reflecting some variability in price stability but generally moderate inflationary pressures. Government debt remained low, ranging between 2 percent and 3 percent of GDP, underscoring a strong fiscal position and limited reliance on external borrowing. In 2009, the economy showed signs of slowing growth with GDP at 44.8 billion US dollars PPP and GDP per capita at 8,954 US dollars PPP. Nominal GDP was reported at 65.0 billion US dollars. The real GDP growth rate decelerated to 6.1 percent, reflecting the global economic slowdown following the 2008 financial crisis. Inflation turned negative, registering at minus 2.7 percent, indicating deflationary pressures during this period. Government debt remained low at 2 percent of GDP, maintaining fiscal prudence despite the challenging economic environment. From 2010 to 2014, Turkmenistan’s GDP exhibited steady growth, increasing from 49.6 billion US dollars PPP in 2010 to 82.5 billion US dollars PPP by 2014. GDP per capita rose significantly from 9,740 to 15,093 US dollars PPP during this timeframe. Nominal GDP also expanded from 76.5 billion US dollars to 94.1 billion US dollars. Real GDP growth rates were consistently strong, ranging from 9.2 percent to 14.7 percent, highlighting a period of rapid economic development. Inflation remained moderate, fluctuating between 4.4 percent and 6.8 percent, indicating relative price stability. Government debt fluctuated between 4 percent and 20 percent of GDP, reflecting some variability in fiscal policy and borrowing during this period. Between 2015 and 2016, GDP continued to grow from 88.8 billion US dollars PPP to 95.5 billion US dollars PPP, while GDP per capita increased from 15,952 to 16,922 US dollars PPP. However, nominal GDP slightly decreased from 93.8 billion US dollars to 90.5 billion US dollars. The real GDP growth rate slowed to approximately 6.2 percent, indicating a moderation in economic expansion. Inflation declined from 7.4 percent to 3.6 percent, suggesting improved price stability. Government debt rose from 22 percent to 24 percent of GDP, indicating increased fiscal borrowing during this period. In 2017 and 2018, Turkmenistan’s GDP experienced a decrease to 81.8 billion US dollars PPP in 2017 before rebounding to 88.9 billion US dollars PPP in 2018. GDP per capita followed a similar pattern, falling to 14,324 US dollars PPP in 2017 and then rising to 15,048 US dollars PPP in 2018. Nominal GDP increased from 100.0 billion US dollars to 103.3 billion US dollars over the two years. Real GDP growth remained relatively steady, ranging between 6.2 percent and 6.5 percent. Inflation, however, rose sharply from 8.0 percent in 2017 to 13.3 percent in 2018, indicating increasing inflationary pressures. Government debt also increased, reaching 31 percent of GDP, reflecting a growing fiscal burden. During 2019 and 2020, Turkmenistan’s GDP rose to 96.2 billion US dollars PPP in 2019 and further to 99.3 billion US dollars PPP in 2020. GDP per capita increased to 15,766 US dollars PPP in 2019 and slightly to 15,810 US dollars PPP in 2020. Nominal GDP was approximately 101.6 billion US dollars in 2019 and 99.9 billion US dollars in 2020. However, real GDP growth slowed significantly to 1.8 percent in 2020 from 6.3 percent in 2019, reflecting economic challenges possibly linked to global economic disruptions. Inflation fluctuated between 5.1 percent and 8.0 percent, indicating moderate price volatility. Government debt remained relatively stable, hovering around 31 percent to 33 percent of GDP. Despite these official statistics, the accuracy and reliability of Turkmenistan’s economic data have been questioned by various external observers. In 2006, the Asian Development Bank expressed skepticism regarding the official GDP figures released by Turkmenistan, suggesting that actual economic growth was likely much lower than the government’s reported estimates. The Bank noted a historical tendency of the Turkmen government to overstate growth figures, casting doubt on the veracity of the official data. Similarly, the United Kingdom government’s 2021 Overseas Business Risk report highlighted the unreliability of Turkmenistan’s economic data, emphasizing that official figures submitted to international financial institutions often did not correspond with observable economic conditions within the country. This discrepancy raised concerns about transparency and the accuracy of macroeconomic reporting. External observers have also expressed skepticism about the official inflation rates reported by Turkmenistan. Given the country’s history of volatile inflation and limited independent verification mechanisms, many analysts question the credibility of the government’s inflation statistics. This skepticism is compounded by the lack of open access to comprehensive economic data and the opaque nature of Turkmenistan’s statistical reporting practices. Reflecting these challenges, the World Bank’s June 2021 Global Economic Prospects report excluded Turkmenistan from its analysis due to the absence of reliable and adequate quality economic data. This exclusion underscores the difficulties faced by international organizations in assessing Turkmenistan’s economic performance and prospects, given the limited transparency and questionable reliability of official statistics. On 11 March 2021, Turkmenistan’s Cabinet of Ministers disclosed that the country had accumulated over 14 billion US dollars in foreign exchange loans in recent years. As of 8 March 2021, the outstanding amount of these foreign exchange loans stood at 5 billion US dollars. This revelation highlighted the extent of Turkmenistan’s external borrowing and raised questions about the country’s external debt sustainability and fiscal management. In March 2021, a televised chart presented by Turkmen state media indicated that the country’s external debt was 1.3524 billion US dollars. Opposition media outlets used this figure, combined with statements from Central Bank Chairman Rahimberdi Jepbarov, who asserted that external debt equaled 11 percent of GDP, to estimate Turkmenistan’s GDP at approximately 12.3 billion US dollars. This estimation starkly contrasted with the official GDP figures reported to international organizations, illustrating the discrepancies and opacity surrounding Turkmenistan’s economic data. In June 2021, official Turkmen state media reported that debts owed to China related to the construction of natural gas pipelines had been fully repaid. This announcement signified the completion of a major financial obligation linked to the country’s energy infrastructure development and suggested a degree of fiscal consolidation in managing external liabilities associated with strategic projects.

During the initial years following Turkmenistan’s declaration of independence in 1991, the official exchange rate of the Turkmen manat against the United States dollar experienced a pronounced increase, signaling a significant depreciation of the national currency. This depreciation reflected underlying economic challenges, including inflationary pressures and structural adjustments as Turkmenistan transitioned from a centrally planned economy to a more market-oriented system. The official exchange rate movements were indicative of the manat’s declining purchasing power on the international stage, which in turn affected import costs, foreign investment, and overall economic stability. Simultaneously, the black-market exchange rate for the Turkmen manat depreciated at an even more accelerated pace compared to the official rate. This divergence arose from limited convertibility of the manat, government-imposed currency controls, and a lack of confidence in the official exchange mechanisms. The black-market rate eventually stabilized at approximately 24,000 to 25,000 manats per US dollar, a figure that starkly contrasted with the official exchange rate and underscored the existence of a parallel currency market. This substantial gap between the official and black-market rates highlighted the challenges faced by the Turkmen government in managing currency valuation and controlling inflation, while also reflecting the broader economic uncertainties during the post-Soviet transition period. Detailed records of the official manat to dollar exchange rates illustrate the trajectory of currency depreciation over the latter half of the 1990s. In January 1996, the official exchange rate stood at 2,400 manats per US dollar, a rate that already represented a significant decline from the manat’s initial post-independence valuation. By January 1997, this rate had nearly doubled to 4,070 manats per dollar, signaling continued inflationary trends and economic adjustments. The depreciation persisted into the late 1990s, with the official rate reaching 5,350 manats per dollar by January 1999. Interestingly, by January 2000, the official exchange rate slightly improved to 5,200 manats per dollar, suggesting a momentary stabilization or government intervention aimed at curbing further currency devaluation. These official rates, however, remained substantially disconnected from the black-market valuations, which continued to reflect the true market pressures on the Turkmen manat. The widening gap between the official and black-market exchange rates during this period had significant implications for Turkmenistan’s economy. It affected the pricing of imports and exports, complicated foreign trade transactions, and contributed to economic inefficiencies. Furthermore, the existence of a thriving black market for currency exchange indicated limited trust in official economic policies and the manat’s stability. This dual exchange rate system also posed challenges for policymakers attempting to stabilize the economy, control inflation, and attract foreign investment. The experience of the Turkmen manat in the 1990s thus serves as a critical example of the complexities faced by post-Soviet states in managing currency valuation amidst economic transition and uncertainty.