Economy of Turkmenistan

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Turkmenistan is largely desert country with nomadic cattle raising, intensive agriculture in irrigated oases, and huge gas and oil resources. One-half of its irrigated land is planted in cotton, placing the country in the top 10-15 producers.[2] It also possesses the world's fourth largest reserves of natural gas and substantial oil resources. Until the end of 1993, Turkmenistan had experienced less economic disruption than other former Soviet states because its economy received a boost from higher prices for oil and gas and a sharp increase in hard currency earnings. As in the Soviet era, central planning and state control pervade the system, and the Niyazov government (in power 1991–2006) consistently rejected market reform programs. The state subsidizes a wide variety of commodities and services.


Fiscal Policy

The budget making process and its implementation goes according to the Law “On Budget System”. The law fixes legal foundations of organizing management and operating budget system, regulates interrelations between budgets of all levels. The Government of Turkmenistan discusses the State budget draft and submits it to the President of Turkmenistan. Prior to one month of the beginning of the financial year the President of Turkmenistan submits to the Medjlis of Turkmenistan (Parliament) the State budget draft for consideration and adoption Budget statistics are unreliable because the government spends large amounts of extra-budgetary funds. In 2004 official expenditures totaled US$3.05 billion, and revenues totaled US$3.05 billion, creating a balanced budget. The government also reported a roughly balanced budget for 2005, at an undisclosed level of revenue and expenditure. In an effort to increase revenues, the tax code was streamlined in 2004.

Monetary policy


Since 1991 – the last year of existence of the USSR – up to 1993 – the last year of rouble zone existence – the rate of inflation was measured in tens, hundreds and even thousands per cent per year. However the price growth continued and by November 1996 the total price level in Turkmenistan had increased tens of thousands times in comparison with December 1991. Simultaneously with the price growth the currency (dollar) exchange rates dropped. First it was rouble rate (1991)and later on, with the launching of the national currency. The Turkmen national currency – manat – was launched on November 1, 1993. The official exchange rate was established as $1equal to 2 manats.

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