Is Turkmenistan the Next Central Asian Tiger?
While we are long accustomed to hearing about the prowess of Kazakhstan’s oil-driven economy, or Uzbekistan’s assertiveness as the self-anointed regional leader, Turkmenistan rarely makes any news, except in the negative. Indeed it has a reputation, earned mainly under former President Separmurad Nyazov, as an authoritarian fortress insulated from the outside world. However, Turkmenistan is shaping into a country whose potential is unparalleled in the region, thanks to a series of fortunate measures adopted in recent years. Ashgabat is seeking to develop today its energy and transport potential and modernize the economy by introducing selected reforms, in a way not dissimilar to what other regional countries have done much earlier.
Energy
Ashgabat’s approach has three pillars: pipelines, extraction of hydrocarbons, and electricity generation.
While until 2009 the country depended on Russia almost exclusively, Turkmenistan today enjoys the most diversified set of pipelines in the region, with three different export routes. The first remains the Central Asia-Center pipeline to Russia and Europe. A second route links it to Iran thanks to the Korpezhe-Kurt Kui and since 2010 the Dauletabad-Sarakhs-Kargan line. The two pipelines reach a combined capacity of 20 billion cubic meters (bcm) of gas per year. But the third and most important route is the China-Central Asia Pipeline, destined to supply more than 40 percent of China’s gas by 2020 – the equivalent of 80 bcm per year. Its first two lines became operational in 2009 and 2010 respectively, and the third line started pumping in June 2014. Line D, the fourth section, is scheduled to be ready by 2016/17.
A (long-delayed) fourth route – the 1,735 km TAPI pipeline for a cost of $7.6 billion – is making progress coordinated by the Asian Development Bank (ADB). Turkmenistan will begin work on its section in 2015 and the pipe should be online by 2017/18. On top of that, Ashgabat is also completing a domestic East–West pipeline, to carry up to 30 bcm of gas to the Caspian Sea, for shipment to Azerbaijan and, from there, to Turkey and Europe through the Baku-Tbilisi-Ceyhan pipeline.
