World Economy

Rumors Rule as Turkmen Crisis Grows

Rumors Rule as Turkmen Crisis GrowsRumors Rule as Turkmen Crisis Grows

Getting reliable economic information out of Turkmenistan is difficult at the best of times, so if the gas-rich country is on the verge of a crisis, the secretive leadership is unlikely to drop any hints.

But a number of recent reports suggest that the effect of falling energy prices is being magnified by limited official information, Eurasianet reported.

Opposition news websites Alternative News Turkmenistan and Chronicles of Turkmenistan have reported long queues stretching out of currency exchange bureaus in recent days. The panic, note both outlets, is based on a rumor that the manat is about to be significantly devalued again.

The manat already fell 19 percent on New Year’s Day, falling from 2.85 to 3.5 manats against the greenback. The rumors point to an alarming 4.5 to the dollar.

According to the Chronicles of Turkmenistan: In recent days queues have been forming at various banks from early in the morning. In the regions, only 40-45 people are able to obtain the dollars at each bank, even though the queues extend to 200 or more people. Then the [people in the queue] are informed that there are no more dollars for the rest of the day.

Passports are required at the point of exchange. Each person can obtain no more than $1,000 in a single day.

There may be nothing to the devaluation rumors, but in a place where information is managed as tightly as it is in Turkmenistan, whispered conjecture can be unnerving.


  Praise & Criticism

On January 30, reporting on its recent mission, the IMF praised Turkmenistan for accumulating sizable reserves, but criticized the government’s reticence.

The IMF urged “stepped-up communication to the public” and that Ashgabat “strengthen governance and transparency, notably for managing hydrocarbon revenues.”

In a rare admission that not everything is absolutely perfect in his hermit kingdom, President Gurbanguly Berdymukhamedov said January 30 on state television that declining international oil and gas prices have “forced us to take certain extraordinary steps such as raising prices for some goods and services as well as lowering the rate of manat against hard currencies” (via BBC monitoring).

The last 12 months have been painful for the region’s currencies, as trading partner Russia’s ruble has lost over half its value due to western sanctions and falling oil revenues. Central Asia’s energy producers – Kazakhstan, Turkmenistan and Uzbekistan – are also feeling lower prices.

Chronicles also reported this week that the state energy sector is cutting jobs and reducing workers’ salaries.

The website noted that the cuts had followed an expanded session of the government on January 9 where Berdymukhamedov spoke of the need for greater economic efficiency in the sector.