Turkmenistan: Economy Officials Shake-Up as Crisis Panacea

The president of Turkmenistan has effected a major revamp among officials running the country’s economy in a desperate bid to emerge from a crisis provoked by low global energy commodity prices.

State media reported on April 10 that Gurbanguly Berdymukhamedov fired the Economy and Development Minister Eldash Sheripov, who had been in his post since July 2015.

Neutral Turkmenistan newspaper reported that other officials dismissed included Trade and Foreign Economic Relations Minister Bayar Abayev and the head of the tax service, Shatlyk Hummedov. They had been in their jobs for five years and two years, respectively.

Berdymukhamedov offered typically vague and ominous motivations for the dismissals.

“There are violations related to unauthorized and non-earmarked spending of budget funds, as well as an unjustifiable expansion in the ranks of management that is slowly evolving in the financial and economic system,” he said.

Without any firm details, it can only be assumed that this is an oblique reference to a problematic cocktail of corruption, nepotism and mismanagement in the departments in question.

In another sign of the grievous state of government’s finances, the long-promised scrapping of generous social benefits is also looming ever closer.

Berdymukhamedov said that the provision of free gas, water and electricity approved in the early post-independence period as a measure to “improve the social condition of the population” had lost its relevance.

“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.

The idea to downgrade the generous welfare system was initially aired by the Council of Elders advisory body in September. It was argued then that it was time for Turkmenistan to embrace market rules. 

Using the Council of Elders to float the proposal was the government’s attempt to convey the implausible notion that scrapping subsidies had come as the result of a grass roots initiative.

The Council of Elders serves as a would-be bridge between representatives of local communities and the central government, but it is evident that it takes its cues from the authorities. 

Legislation on the free provision of electricity, gas, salt and water to the population was first passed in 1993 and designed to expire after 10 years. In 2003, the law was extended to 2020.

In October 2006, two months before former President Saparmurat Niyazov died, the social contract to give free gas, power and water was again renewed to 2030.

In 2014, Berdymukhamedov ordered that gas meters be installed in homes as part of measures to rationalize the usage of gas, which is used by urban households primarily for cooking. That move did little to actually affect standards of living, as the gas remained free for most people.

But people in rural areas, who use gas to heat their homes and the barns where they keep their livestock, felt the pinch. Since 2014, a charge has been levied on all gas consumed beyond the monthly 50 cubic meter allowance per person. The additional gas is charged at $7 per 1,000 cubic meters.

These fresh developments spell an end to the implicit social contract whereby fundamental needs are provided in exchange for quietude among the population. A ruthless and systematic regime of heavy-handed rule has ensured that no broad dissent could ever develop, so even occasional anecdotal accounts trickling out of the country suggest that when discontent does bubble over, it tends to do so in contained and highly localized fashion. There is no strong reason to expect that to change soon, but the authorities will be ill-equipped to know how to tackle any intensification in the frequency of local anger when it arises.
There are also few grounds to believe the panicked rotation among the cadres will lead to any major uptick in economic performance, which remains strong only on paper. (The International Monetary Fund, for one, still expects a remarkable 6 percent growth in gross domestic product in 2016).

And as the exile-run Alternative News of Turkmenistan illustrates in a report on the April 8 Cabinet meeting, firing and hirings appear often detached from firm reasoning.

Another official to be fired was the deputy minister for cultural affairs, Maisa Yazmuhammedova, who was removed from the same position back in February 2012.

Yazmuhammedova is being replaced by Gulshat Mammedova, who has her own troubled history of employment in government. Mammedova was fired as education minister in April 2015, following a number of presidential rebukes dating back as early as as January 2011.

Her dismissal followed an inspection by the Supreme Control Chamber, a government oversight body.

“An inspection of the institutions reporting to [Mammedova’s] ministry has revealed a number of shortcomings in terms of improvement among education and teacher-training activities,” state media said in reports on Mammedova’s firing.

The Alternative News of Turkmenistan goes out on a limb to predict that Mammedova will not last long in her new job.

This particular saga exemplifies the erratic fashion in which the country’s top officials are appointed and removed. Proven inability to do one’s job — or any job for that matter — rarely presents a stumbling block in career advancement.

Conversely, official can face dismissal for failing to prevent trends and mechanisms entirely outside their control. What a fresh team overseeing the economic portfolios will be able to do to reverse the budget shortfalls caused by lower global energy commodity prices is anybody’s guess.

Berdymukhamedov’s recipe for a return to relative prosperity is reliant in greater part on threats and dismissals, surely a sign that ideas are few and far between.

Turkmenistan: Economy Officials Shake-Up as Crisis Panacea

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