Turkmenistan is a country in the Central Asian region with a population of more than 5.5 million and a coastline along the Caspian Sea between Kazakhstan to the north and Iran to the south. Prior to gaining independence in 1991, Turkmenistan was a Soviet republic.
The country is well-endowed with energy reserves including natural gas and oil, and its economy is highly dependent on energy production and exports. In addition, Turkmenistan is rich in cotton, another highly exported commodity. Although 48.2% of the country’s labor force works in agriculture, this sector represents only about 8% of its GDP. Turkmenistan, moreover, continues to grapple with substantial barriers to economic and political progress, subjecting many of its citizens to poverty and other sources of hardship. Here is what you should know about poverty in Turkmenistan.
4 Facts about Poverty in Turkmenistan
- Turkmenistan has made significant progress when it comes to poverty reduction. In 1999, an estimated 58% of the population in Turkmenistan was living in poverty compared to 0.2% in 2012. GDP per capita witnessed a similar kind of improvement over the same period. In 1999, GDP per capita in Turkmenistan was only $1,800. That figure increased to $8,900 in 2012, and in 2017, it reached $18,200, earning the country a rank of 97th highest GDP per capita in the world.
- Turkmenistan is reported to possess the world’s fourth-largest reserves of natural gas. Its heavy reliance on energy exports, however, exposes its economy to sizeable vulnerabilities, including fluctuations in the energy prices. High energy prices in the last decade enabled sensible progress in the form of utility subsidies on the part of the Turkman government since 2014. However, the country’s GDP growth rate has declined to 10.3%, as a result of low energy prices, in 2014 from 14.7% in 2011. In 2015, its GDP growth rate further declined to 6.5%. These setbacks have resulted in cutbacks on government subsidies and infrastructure spending.
- The country’s first political leader, Niyazov, died in 2006 and was succeeded by Berdimuhamedow, who continues to be president today. Under the reign of Niyazov, political dissent was widely suppressed and freedom of movement and travel tightly limited. In 2004 and 2005, moreover, Turkmenistan’s development was significantly hindered when the government cut one year off of secondary school requirements, replaced 15,000 healthcare professionals with military conscripts, and closed all regional hospitals. Political repression and limited civil freedoms continued under Berdimuhamedow. With a transparency index of 154 among 176 countries, corruption on all levels of government has also been a major obstacle to development in Turkmenistan, limiting its potential for foreign investment opportunities.
- Turkmenistan’s economy is heavily regulated by the state. This point is illustrated by the fact that an estimated 90% of agricultural production is controlled by the state. People also report long waiting queues throughout grocery stores that the state owns or controls. Since food items like bread and eggs are subsidized and given that Turkmen farmers are barred from growing unauthorized products, the country’s economy is far from efficient or self-sufficient. This fact is further exacerbated by government control over the foreign exchange rate, thus restricting the private sector’s ability to import the foodstuffs needed to sustain the population.
While official estimates for poverty in Turkmenistan are low, at 0.2%, there are several drawbacks that the country faces in regard to both its economy and its social and political standing. These range from the need to diversify its economic model from its heavy reliance on energy export revenues to the promotion of a more free business and investment climate. In the meantime, international cooperation and coordination ought to strive to ensure that the recent food shortages in Turkmenistan do not escalate into a full-fledged hunger crisis.
– Oumaima Jaayfer