The latest desperate measures by Turkmenistan’s government to alleviate pressure on the national currency have reportedly sparked panic among the population and prompted many to begin stockpiling food.
Alternative News of Turkmenistan (ANT) website reported last week that the Central Bank had suspended currency convertibility for private enterprises, including those trading in food and similar basic items.
The website on July 26 cited its sources as saying that President Gurbanguly Berdymukhamedov would be personally granting permission to individual companies to buy and sell foreign currencies.
With companies in Turkmenistan unable to secure foreign cash, they are unable to pay suppliers, causing a shortage of imported goods on the local market. As ANT notes, similar restrictions were introduced in October but were not extended to companies dealing in food goods and industrial materials.
Some entrepreneurs should theoretically be able to draw on bank accounts in foreign denomination to continue their transactions, but ANT cited an unnamed government official as saying that only a handful of companies had positive balances on the dollar accounts.
“We have returned back to the days [of former president Saparmurat Niyazov],” the source told ANT.
Without referring to the ANT reports, the Central Bank this week tried to inject a note of reassurance by noting in a statement that it was creating all conditions necessary for currency convertibility.
“The private sector, as well as citizens, can without interference convert foreign currencies as established under the law,” the statement said.
The excess ambition of that reassurance, however, compels the reader to suspect the veracity of anything in the statement. Exchanging cash for regular Turkmens has been problematic for the longest time now, so claims of normality on the market are knowingly misleading.
The Central Bank then qualifies its statement by saying that parts of the private sector engaged in production would be given full access to foreign cash — an indication that importers may get less preferential treatment. That would be bad news for regular citizens.
There are multiple reports of price increases across the board for everyday items like sugar, oil, instant coffee, meat, animal feed, washing powder and medicine. Currency hiccups are being blamed in part, but so is the recent announcement that government salaries, welfare benefits and student stipends are to be hiked by 10 percent from the start of next year. This concession was clearly intended to have a reassuring effect, but it could well be encouraging some retailers to gradually hike their prices in anticipation.
Even small-scale shuttle trading from Turkey has been taking a hit recently as a result of unscrupulous customs officials demanding a cut.
“None of the customs officials will move a finger until they get their cut from the imported goods. Requisitioning is an established practise among Turkmen customs staff. But now they’ve added a new vice: out and out theft. Shuttle traders open containers and boces with their goods, only to find that the contents do not match the attached inventory,” one businessperson told ANT.
Again, the burden of all this malfeasance ends up being borne by regular Turkmens, many of whom are patently struggling to make ends meet. Authorities must hope that their usual recipe of intimidation and dwindling welfare handouts will prevent the population from growing too restive.
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