EWD Publications TURKMENISTAN

December 2007 News East-West Debt

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From the December 2007 publication: TURKMENISTAN

TURKMENISTAN: Niyazov's heritage.
Turkmenistan's long time president, Saparmurat Niyazov died last December which set the country free after a medieval, cruel reign of over twenty years. Niyazov was often described as a madman with a severe personality disorder which is said to stem from his deprived childhood.

Niyazov was born in 1940 and became an orphan at the age of 8. He grew up in Leningrad (now St. Petersburg) and graduated in engineering. He also received a political and ideological education at the Communist party school. He pursued a career in engineering and was a dedicated member of the communist party until he was named head of Turkmenistan's Communist party in 1985.
Niyazov was himself of ethnic Turkmen descend and could rely on the support of his own Tekke clan. This is one of the reasons that he remained in power after the collapse of the Soviet Union.
Turkmenistan declared independence shortly after the collapse in 1991 and together with the support of his tribesmen and the extremely tough Turkmen KGB, Niyazov retained power over the country. He was the only Central Asian leader to be able to do so after the Soviet Union seized to exist.

The country has an enormous natural wealth in the form of gas and oil reserves but in stead of using this huge potential Niyazov failed horribly in exploiting any of these possibilities to develop the country.
Turkmenistan is now even more impoverished than it was under Soviet reign. When Turkmenistan declared independency it was a success story waiting to happen. The oilfields were already developed by the Soviets whom had also put a pipeline to Russia in place, furthermore cotton was growing in abundance.
Many major international companies proceeded to court Turkmenistan's president for lucrative oil and gas deals but after years gave up trying to negotiate with Niyazov. High ranked officials in the US have stated that the man was impossible to work with and plainly mad. Instead of building Turkmenistan a flourishing economy mister Niyazov continued to rob the countries revenues to finance a bizarre personality cult.
Mister Nayazov was also nicknamed "Mr 33% " because of all the bribes he took from foreign business man trying to do deals in Turkmenistan. He is believed to have stolen enormous amounts of monies belonging to the state which are supposedly placed in foreign bank accounts.

Last year Deutsche Bank, Germanys biggest bank, was under pressure over claims it was holding billions of dollars in accounts formerly controlled by Niyazov. The president had full discretionary control of the Turkmen central bank, apparently without any appropriate regulation or transparency.
De facto this means that he could use all the countries disposable funds completely at his own leisure. Several international human rights groups have called it an outrage that international banks have maybe, involuntary facilitated the theft of Turkmen state funds by Niyazov thus depriving the people of Turkmenistan.
Andrei Grozin, an expert on central Asia in Moscow's Institute of the CIS, said it was "naïve" to think European banks would ever return the funds to Turkmenistan.

A new chapter in the future of Turkmenistan is however around the corner with the election of president Gurbanguly Berdymukhammedov. Although he served as minister under the former government and blindly followed the deceased president in some ludicrous policies, the West has high hopes Turkmenistan will now open up for business a last.
This means that another long line of companies and countries trying to court the very eligible maiden and her almost virgin gas and oil reserves have been lining up for a date. One of the first important dates was in September when the new president visited the United Nations General assembly for the first time since taking power.
Rumors are that amongst others Chevron is already playing footsy with Gurbanguly whom is also in serious talks with the Chinese.
In the next year it will become clearer to which parties or countries the new president is taking a shine and whom therefore will be likely to have control over the fourth largest gas reserves in the world and the vast, still largely undeveloped, oil reserves.