Turkmenistan’s OBOR Contributions – Gas, Tourism & Light Trade Potential

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By Dezan Shira & Associates

Turkmenistan’s position in China’s OBOR initiatives remains somewhat off the radar. It is remote, harbors a long and dangerous border with Afghanistan, and is the only Central Asian country not to have presented itself as a candidate to join the WTO. It is a strong willed nation, proud, and determined to follow its own “National Way of Development”, which essentially means an adherence to the old Soviet Union style of operations. The country has made little attempts to modernize its economy, and as a result has the worst record of economic and trade liberalization among the former republics of the Soviet Union.

But slowly, things may be changing. China needs energy, and Turkmenistan is sitting on top of the Galkynysh gas field, which has the second-largest volume of gas in the world after the South Pars field in the Persian Gulf. Gas remains the backbone of its domestic economy, which has generated much wooing from China, and has resulted in the development of the Central Asian Gas Pipeline (pictured above), which accesses the Galkynysh fields, traversing Uzbekistan and Kazakhstan, and then entering China at its Western Xinjiang Province. As a result of this, Turkmenistan has indicated its plans to boost its gas output to 230 billion cubic meters and annual gas exports to 180 billion cubic metres by 2030.

These pipelines are bringing with them other initiatives. Although 70 percent of Turkmenistan is desert, the country remains suitably enigmatic and is attracting Chinese tourists. Acknowledging that mainland Chinese visitors are unlikely to question the political methodology of its own government, tourism facilities are now being built to better accommodate the Chinese market. This includes VAT  breaks for foreign investors in this sector, and includes the special tourism area at Avaza, on the Caspian Sea which has also been billed as “the Central Asian Las Vegas.”

In terms of other trade potential, Turkmenistan requires support to bolster its new found appetite for tourism – with visitors from both the Middle East and Asia being targeted as potential customers. The country also has a small, but good standard cotton producing industry.

Information concerning investment into Turkmenistan can be found from the website of the Turkmenistan Ministry of Foreign Affairs.

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Dezan Shira & Associates provide business intelligence, due diligence, legal, tax and advisory services throughout the Asian and Eurasian region. We maintain offices throughout China, South-East Asia, India and Russia. For assistance with OBOR issues or investments into any of the featured countries, please contact us at silkroad@dezshira.com or visit us at www.dezshira.com

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