Thoughts on Turkmenistan’s Privatization

Like all the other dozen folks who follow Turkmenistan, I’ve noticed the recent press on its supposed privatization plans. Berdymukhammedov announced that some unspecified state-run companies in the construction, transport, and communications industries would be sold off starting this year.

The big news in the international press was that the government would not sell its most valuable oil and gas assets. This, of course, should come as no news to anyone who follows Turkmenistan.

Still, that Turkmenistan would do anything approaching market reforms may come as a surprise. 

First reaction would be to believe only what we see. Will international companies be involved? Whether they are or not would have importance. 

More importantly, what companies are we talking about? If we are discussing Turkmen Airlines, Railways, the state mobile phone network Altyn Asyr, and the regional state construction companies, we would be talking about central pieces of the command economy. Airways and Railways are notorious money holes, through which millions in state expenditures are passed. Altyn Asyr is one of two national mobile providers, and while dysfunctional, it has significant revenues.

The contracts that are executed by the state construction firms are worth millions. While the most lucrative contracts are executed by Turkish, Chinese, Russian, and French firms, local companies (each close to GMB), have started implementing bigger deals. Local interests connected to GBM may be pressing for control of these assets.

The most obvious candidates for privatization would be the garment factories, particularly those already under Turkish management. For some reason, they don’t seem to be on the list.

If these aren’t the assets that are going to be put to market, then they probably are not worth much.