ASHGABAT, Turkmenistan — Turkmenistan is a Central Asian country of nearly six million people. It is an isolated nation rich in natural gas reserves. However, there has been a lack of growth in Turkmenistan’s business sector due to the tight hold of the autocratic government led by the late Saparmyrat Niyazov and current President Kurbanguly Berdymurkhamedov. Despite current isolation, potential international trading partners have shown interest in investing in Turkmenistan. The government may start allowing foreign investments in Turkmenistan through these interested parties.
European Interest in Developing Small Businesses
The European Bank for Reconstruction and Development (EBRD) has been working with Turkmenistan to develop small businesses in the private sector. The EBRD invested more than €5 million via the EU into developing small businesses with the Advice for Small Businesses program. It gives advice and training for local businesses to handle supply lines, project management and financial skills.
The program is expected to facilitate growth for the local economy as Turkmen consultants continue to develop their skills to bolster the local market. The program will also develop the agriculture, construction and tourism sectors in Turkmenistan among other developments. The EBRD currently has invested €262 million in private entrepreneurship in Turkmenistan.
The nation made a trade agreement with Singapore in August 2019 in a move to start allowing foreign investments in Turkmenistan. The agreement allows cross-border financial trading and the development of infrastructure and connectivity between the two countries. The agreement also allows Turkmenistan access to “transportation and logistics” from Singapore-based Pacific International Lines.
The deal allows Turkmenistan to develop business sectors outside of the energy industry and build up the country’s economy. Plans to develop construction, chemical trading and transportation have been discussed during the negotiations. On August 26, representatives from 70 companies based in Singapore were involved in agreements with Turkmenistan just prior to the summit in August to develop said industries.
A Major Gas Pipeline
The Trans-Caspian Gas Pipeline has been a long-discussed topic between Turkmenistan and various Asian and European countries. The project was proposed back in the 1990s by Italian engineers who were developing technology to build a deep-sea pipeline. Interest in the project recently was renewed when Azerbaijan agreed to deliver gas to Turkey in 2018. Azerbaijan is currently preparing to send gas to Italy in 2020.
Europe and Azerbaijan have been looking into Turkmenistan’s reserves as potential substitutes for Russian energy supply lines. As of 2012, there were an estimated 292 trillion cubic feet of natural gas reserved within the Caspian Sea, making it a valuable market for Turkmenistan and surrounding countries. Building a shorter pipeline between the two nations would also improve the relationship between Azerbaijan and Turkmenistan.
By allowing foreign investments in Turkmenistan, the country can grow its economy, develop its local small businesses and build its private sector. Developing trade agreements with other nations will help Turkmenistan gain a significant boost in commerce and production in its domestic market. While the proposed pipeline is still in negotiations, getting an agreement made to build it would provide a major boost to Turkmenistan’s economy and take advantage of the natural gas industry in and around the Caspian Sea.
– Henry Elliott