Turkmenistan on May 2 opened a new $1.5bn cargo and passenger seaport facility on the Caspian Sea. The Turkmenbashi port infrastructure will boost its revenues from handling traffic on North-South shipping routes, tripling the remote Central Asian country’s annual cargo handling capacity to 25mn-26mn tonnes.

The launch of the port facility is in line with China’s huge One Belt One Road initiative, which seeks to transform and group Central Asian territories into a transit hub with modern infrastructure for Chinese exports to Europe and vice versa. The post-Soviet nation has long had its own ambition to become a transit zone and it is already linked to China via a Kazakh railway. The Turkmenbashi facility will play a role in helping Ashgabat extend its transit capacity for Chinese goods.

Its launch is a rare piece of bright economic news for the Turkmen, coming as it does amid pressing budgetary issues. Turkmenistan has been growing rather desperate for additional sources of revenues.

Budget woes
State budgetary pains have emerged from the country’s economic crisis stemming from low oil prices and partly also from a failure to develop gas export routes anything like fast enough. The budget revenues of the hydrocarbon-dependent country are being consumed at an unrealistic rate, it appears.

There have been reports of flour shortages in the Central Asian country in recent months. People have been queuing up hours before stores open in order to buy up enough flour before the stores run out of the vital foodstuff. In a Mary Province location, it was recently reported that a group of women blocked a road, demanding flour. Dashoguz Province saw people protesting in front of administrative buildings.

The Chronicles of Turkmenistan opposition-run news website claimed that the shortages in the tightly controlled country of 5.5mn are not limited to flour, but apply to many other basic goods as well.

Troubles halt construction of toll road
Turkmenistan’s budget troubles lately led to Turkish construction company Polimeks deciding to halt the construction of a toll road from the Turkmen capital Ashgabat to the port city of Turkmenbashi. Polimex and other subcontractors have reportedly not received payments for construction works already commissioned, including on a new $2.3bn international airport in Ashgabat.

Moreover, stretched government finances have prompted Turkmen public sector agencies and organisations to cut their workforces and send remaining employees on unpaid leave.

On a more positive note, a recent visit of an International Monetary Fund (IMF) team to Turkmenistan concluded that its economy is “continuing to adjust” to “a challenging—although improving—external environment”. Officially reported 6.5% growth in 2017 was “supported by rising natural gas exports, import substitution, and expansionary credit policies”, according to the IMF.

The Turkmen government has adopted multiple desperate measures to rescue the country’s budget including completely suspending Visa cards; ending the era of discounted gas, water and electricity prices for citizens; making contributions to Turkmenistan’s Pension Fund by business owners mandatory from 1 January; and even imposing more fines on car owners and Turkmen fortune tellers, whose occult services are popular in the country.

The dubious spending habits of Turkmen President Gurbanguly Berdimuhamedov do not help address the economic difficulties. The Turkmen leader cleared the launch of the first golf course in Turkmenistan, which opened last October as a designer 18-hole attraction in a country where golf is virtually unheard of.