Turkmen president sacks gas and banking chiefs

By bne IntelliNews January 13, 2014

bne -

Turkmenistan's president has sacked the head of the national gas company and the central bank governor as part of a reshuffle of key economy officials. The changes come a month after parliamentary elections.

At a televised government meeting on January 10, President Gurbanguly Berdymukhamedov criticised Kakageldy Abdullayev, who has headed Turkmengaz - which manages the country's vast gas reserves - for just one year, for allowing the sector to underperform. In particular, the official was lambasted for failing to diversify the country's gas industry.

"State concern Turkmengaz should take effective measures to implement the industry's export potential," Berdykukhamedov complained, according to state news agency TDH. "For example, you can increase the volume of production and sales of liquefied gas and other products that are in high demand in the global markets."

Abdullayev's replacement is Charymuhammed Hommadov, whom Turkmen state media describes as "a person with great experience of work in the gas sector", Reuters reports. The performance of state oil company Turkmennebit also came in for criticism from Berdymukhamedov, who frequently berates ministers and other top officials on state television.

The decision to sack Abdullayev comes despite economic growth of 10.2% in 2013, driven mainly by increased gas exports to China. Turkmenistan has become China's largest gas supplier since the launch of the Central Asia - China gas pipeline in 2009.

Exports to China from the world's second largest gas field, Galkynysh, began in September, and Ashgabat plans to boost exports to the Chinese market to 65bn cubic metres a year by 2020. Meanwhile, Turkmenistan is keen to diversify the markets it serves. It is pushing to build the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline, which would deliver gas from the Caspian to south Asia.

However, it's not just the energy sector that has the president in a tizzy. Berdymukhamedov also sacked Governor Tuvakmammet Japarov from the Central Bank of Turkmenistan, as well as the heads of state banks Presidentbank and Dayhanbank. Gochmirat Myradov, the former chairman of state-owned Turkmenistan Bank, will take over the running of the central bank.

Ashagabt has taken some steps to reform the state-owned financial sector, including the introduction of International Financial Reporting Standards (IFRS). However, a report from the International Monetary Fund (IMF) in August insisted "bold reforms" are still needed.

"Efforts should now focus on allowing market-based mechanisms in the determination of interest rates and lending activities, improving banking supervision and risk management practices, and introducing corporate governance standards in banks," the report said.

The reshuffle comes less than a month after parliamentary elections, which for the first time saw more than one party fielding candidates. The Party of Industrialists and Entrepreneurs of Turkmenistan, which was launched in August 2012, ran alongside the ruling Democratic Party of Turkmenistan in the election, but with both parties backing Berdymukhamedov there was no real choice for voters.

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