Jacopo Dettoni in Almaty -
Turkmenistan has a proven track record for stifling any sort of discontent at home. But it appears more vulnerable to those threats it cannot control originating in the international oil market or on the other side of the Afghan border.
Falling oil prices have stoked tensions in hydrocarbon-rich Turkmenistan. The value of the country’s exports of hydrocarbons, its major driver of economic growth and source of foreign currency, are set to decrease to $13,954mn in 2015, from $18,535mn in 2014, the IMF estimates.
Turkmenistan produced over 76bn cubic metres (cm) of natural gas in 2014, and exported 45bn cm, whereas 2015 production should increase to 80bn cm, according to figures from the Petroleum and Mineral Resources Ministry. Most of Turkmen gas exports go to China through the Central Asia-China gas pipeline, which is currently able to handle as much as 55bn cm of gas per year. An additional 25bn cm/y of capacity through Tajikistan is slated to come online at the end of 2017.
Yet the IMF believes the country is better equipped than its neighbours to withstand the challenges stemming from lower oil prices.
“With large international reserves, Turkmenistan seems to be in a stronger position than many of its neighbours to cope with the challenges, such as uncertainty about energy prices," the IMF wrote in a note in February. "If needed, the country can use some of these financial reserves to support its budget expenditure and imports." The IMF estimated Turkmenistan’s international foreign reserves at 22 months of imports at the end of December 2014.
Authorities have already adjusted to the likely decreasing inflow of foreign currency by devaluing the manat by 22% in January, tightening up fiscal spending for 2015 and pushing through a number of additional measures such as tariff hikes for utilities and transport. The government hopes this is enough to preserve the country’s monetary and fiscal equilibrium and keep the economy growing at around 10% also in 2015.
However, the new measures are fostering discontent among the population. Local authorities detained as many as 80 people in the southern city of Tejen back in February, Chronicles of Turkmenistan, one of the rare local independent news outlet, reported. Charges of links with Taliban and Islamic State representatives were officially brought against the detainees, although Chronicles of Turkmenistan reports they were organising protests against the recent tariff hikes pushed through by the government and the economic woes affecting the population.
At the same time, the government approved a law that bans the organisation of rallies by “any parties, groups or religious organisations whose activities have been suspended or are banned by the laws of Turkmenistan”, as well as any rallies within 200 metres of government buildings.
“This law, combined with the reported crackdown in Tejen, could indicate that Ashgabat is becoming increasingly concerned about the possibility of demonstrations or unrest in the current economic climate,” US-based geopolitical intelligence firm Stratfor wrote in a country analysis on March 31.
The Turkmen government also looks worried by escalating tensions along the 744km Turkmen-Afghan border, as both the Taliban and Islamic State militants are reportedly increasing their control over the tribal areas scattered along the Afghan side of the border.
The Turkmen government approached US authorities and “expressed the desire to acquire US military equipment and technology to address threats to their security along their southern border with Afghanistan,” US General Lloyd Austin told the US Congress in March. Chronicles of Turkmenistan also reported on the presence of Uzbek and Russian troops helping Turkmen forces guard the border.
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