Turkmen leader pledges investment for troubled economy

Turkmenistan's autocrat leader today pledged tens of billions of dollars towards the country's flagship oil and gas sector, which has been battered by low global prices and collapsing demand from Russia.

Speaking at a meeting of the Council of the Elders -- an unelected consultative body that offers no real check on Gurbanguly Berdymukhamedov's vast powers -- the strongman pledged to pour 159 billion manats into the sector over seven years.

At the official exchange rate that would equal some USD 45 billion (38 billion euros) but the sum would only fetch around half that amount on the black market, which is thought to better reflect the real value of the tightly controlled currency.
 

"In the next seven years we will make investments (in the economy) of 240 billion manats. In the oil and gas complex we will invest 159 billion manats," Berdymukhamedov said.

Turkmenistan, which sits on the world's fourth largest gas reserves, has grown strongly dependent on sales to China after Russia ceased purchases of Turkmen gas at the beginning of 2016.

Falling global prices have seen the government impose tight restrictions on currency exchange and led to a spike in the cost of imported goods.

But Berdymukhamedov struck an upbeat tone at the Monday meeting of the council, where he was regularly applauded and serenaded with chants of "hail the protector".

The strongman, who is honoured with a golden statue in the capital Ashgabat, promised to begin production of electric vehicles to help diversify the hydrocarbon-dependent economy.

Berdymukhamedov also vowed to carry out an earlier pledge to slash generous state subsidies introduced under totalitarian predecessor Saparmurat Niyazov in order to boost government revenues.

Berdymukhamedov said "the time has come to save and use state funds effectively."

The popular subsidies introduced in the 1990s had effectively granted citizens of the repressive ex-Soviet republic free gas, water and electricity.