Turkmenistan: Businesses Made to Pay $100,000 to Help Ailing Govt

Evidence is mounting that the economic situation is getting grimmer in Turkmenistan, although the government is giving nothing away.

Chronicles of Turkmenistan, a foreign-based news website, reported on a meeting of local businessmen in which attendants were asked to gather money to support the government.

These events took place last month, but details are emerging only now.

The CoT account begins on June 8, when President Gurbanguly Berdmukhamedov met with representatives of the country’s business community. Two days later, the Union of Industrialists and Entrepreneurs summoned a meeting of the same businessmen to make their unusual request. The list of attendees was drawn up by union chairman Alexander Dadayev, who issued the appeal, CoT reported.

“Our deeply esteemed president, speaking before you all, spoke about the global economic crisis, which has led to a sharp drop in prices for energy resources,” Dadayev is quoted as having said by CoT’s unnamed source. “In this difficult time, we members of the national business community should help our country and our dear president.”

Getting down to brass tacks, Dadayev suggested every person present in the room pony up $100,000.

Asked whether the money would be returned, either directly or through future tax breaks, Dadayev apparently said no guarantees could be given. Threats were more forthcoming, however.

“Those that do not pay the sum will have their oxygen cut off. You know that the [Union of Industrialists and Entrepreneurs] has the means to do this,” he reportedly said.

As for regular members of the public, they are now having more trouble getting their hands on money sent to them from abroad.

RFE/RL Turkmen service, Radio Azatlyk, has reported that since June 26, authorities have slapped new restrictions on services provided by the Western Union cash-wiring service.

A unnamed bank worker told Azatlyk that recipients of cash will now need to provide documents proving that they are related to the sender. Evidence of how the money was earned must also be given, the broadcaster reported.

“All transactions related to the transfer and receipt of money are under control. Everything is recorded: who sent the money, who receives it, and where to and where from the money is going,” the bank employee said.

Moreover, if the amount of money being sent exceeds the monthly salary shown in documents required for the transaction, the cash will not be issued.

And worst of all, once all the hoops have been jumped through, the cash is given in Turkmen manat, not dollars. Since the official exchange rate is only 3.5 to the dollar, rather that the black market rate of 5.6-6 to the dollar, getting money through wire companies implies a huge loss.

It is evident that cash shortages are becoming even more intense, despite earlier draconian measure to fix the problem.

Starting last August, citizens were limited to exchanging $1,000 each month per person. Tellers at cash exchange points plugged passport details into a computer database to ensure against repeat attempts to change money elsewhere. The $1,000 exchange limit remained in place until November, when it was reduced to a mix of $450 and 500 euros per month.

The government then introduced a ticket system, whereby people hoping to change their cash were obliged to get onto a waiting list before they could hope to be served.

Although these kind of arbitrary rules suggests the government is impervious to public discontent, one major apparent concession indicates otherwise.

The authorities have long been trying to get the population used to the notion that the abolition of generous welfare benefits provided by the state is imminent. The provision of free gas, water and electricity that was introduced in the early post-independence period is a core component of the social contract that ensures quiescence.
Berdymukhamedov has said that the system has long since lost its relevance now the country is supposedly evolving into a market-based economy.

“From an economic point of view this is no longer justifiable and it is preventing the transition to a market economy and imposing an additional burden on the budget,” the president said in April.

But at the June 8 meet with the Union of Industrialists and Entrepreneurs, Berdymukhamedov performed a drastic volte-face, announcing that Turkmenistan could keep all its benefits in place after all. He reassured his listeners that despite everything, Turkmenistan had managed to maintain 6 percent annual growth in its economy, allowing for the benefits to continue being paid out. And that wasn’t all.

"We are building many things costing billions of dollars. We are building new villages, homes, roads, international pipelines and other major infrastructural facilities,” he said.

Claims about economic growth are completely unverifiable, and are in fact very likely gross fabrications.

Berdymukhamedov’s talk about building new villages is pretty interesting, by the way, since the trend lately has been for villages in Turkmenistan to disappear, not be built.

At a July 7 Cabinet meeting, it was decreed that 15 villages in the Lebap province would be rubbed out of the list of official “administrative-territorial units” because they were so sparsely populated. Another 16 villages have been merged with neighboring villages, again because of population issues.

This has been going on all across the country.

In May, 16 villages in the Balkan province got the chop. In June, it was the turn Dashoguz province, which lost 11 villages and had another couple dozen absorbed into larger localities. The Mary province will surely be next.

Fewer villages presumably means fewer costs, so this may all be part of a broader expense-cutting exercise.

All this talk of empty villages raises questions about another long-enduring mystery in Turkmenistan: the national census.

It was announced in December 2012 that Turkmenistan completed its census and that details would be made public within two years. But there has been no sign of any of those figures yet.

As Annette Bohr explained in her recent report on Turkmenistan, the census was the first to be carried out since 1995, “despite a UN resolution calling for one to be carried out every 10 years.” The 1995 census listed a population of 4.5 million people.

Why the mystery, who can say?

Turkmenistan: Businesses Made to Pay $100,000 to Help Ailing Govt

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