The experience of Western businesses operating in Turkmenistan, specifically their access to the internet, helps underscore the reluctance of Turkmen leader Saparmurat Niyazov's to permit unfettered competition and the free flow of information.

Niyazov's totalitarian tendencies have hampered the development of civil society in Turkmenistan, an arid, but oil and gas rich nation of 4.7 million people [for background see EurasiaNet's Environment archive]. At the same time, some observers suggest Niyazov's leadership style is restraining the country from fulfilling its economic potential. It is also fueling the frustration of some foreign businessmen in Turkmenistan.

According to Wayne Merry, a Senior Fellow at the Atlantic Council in Washington, DC, recent moves to restrict internet access in Turkmenistan appear consistent with Niyazov's efforts to "isolate the country from the modern world and prevent what he would see as subversive influences, particularly from the West, and particularly from manifestations of globalization from penetrating Turkmenistan.

"The internet is something very new, very hard to control. [It] appeals to youth and opens up the outside world," Merry added.

Turkmenistan possesses the world's fourth largest natural gas reserves, and is a key player in the proposed Trans-Caspian Pipeline. [For additional information see EurasiaNet's Business and Economic archive]. The potential for large profits have lured over 50 major US companies to Turkmenistan -- including Coca-Cola, Arthur Andersen, Halliburton, and UPS. However, a communications upgrade commensurate with the corporate influx has yet to occur.

Given the distances and time differential, the Internet would seem to be the most convenient means of communication. But instead of allowing the Internet to grow, Niyazov has done his best to stifle it. Predrag Zezelj, a public relations officer at Ford Motor Co., says that communications have always been very difficult in Turkmenistan. "It took ages to get a good phone line, [and] as for e-mails, one could never tell whether they had reached the addressee or not."

The Internet arrived in Turkmenistan in 1996, through a government agreement

with MCI. Only about 2,000 people – mostly those from the diplomatic and business communities -- are regular users. Turkmenistan had six Internet service providers (ISPs) -- four private and two state-run -- at the start of 2000. Even though the internet had not made significant inroads in Turkmenistan, recent actions by the Ministry of Communication indicated that officials perceived the new technology as a threat to their economic and political authority.

The first independent ISP -- Ariana, LTD -- started operations with the help of USAID. Within three years, Ariana had attracted about 350 subscribers, and had established a reputation for dependable customer service, according to its founder Vagif Zeynalov. Meanwhile, Ariana's main rival, the state-run Turkmen Telecom, struggled to compete.

Ariana's success prompted a government backlash. Trouble for the independent ISPs began last February, when authorities approved a new provision requiring all ISPs holding operating licenses to re-register. Then, on May 25, the Ministry of Communications suddenly shut down all non-state ISPs for allegedly falsifying information about the technical and structural details of their services in mandatory reports.

ISPs and independent watchdog groups say the real reason for the shutdown was to destroy successful competition to Turkmen Telecom control of the market. A Western businessman, who spoke on condition of anonymity, suggested the move follows a pattern of government behavior.

"There are many in the government who believe that if a sector is profitable, then they should monopolize that sector or business," the businessman said.

The restriction of competition has resulted in a deterioration of service, some business representatives report. For example, after switching from Ariana to Turkmen Telecom, some experienced delays in downloading company e-mails.

Others, however, have adapted to the vagaries of the post-Soviet business environment. Jay Phebus, Vice President of American Machinery Co., which has been operating in Turkmenistan since 1994, says he no longer "expects a logical conclusion to anything," when dealing with former Soviet bureaucrats.

The disappointment experienced by some in the business community may be in part the result of unrealistic expectations. Vladislav Gourin, who represents Lockheed Martin, says that more patience and cultural understanding is needed. "The Turkmen market is a difficult one and implies a traditional Asian approach," he said in an electronic interview. "The time factor plays a totally different role compared with European or US markets and sometimes may even be totally disregarded."