View the information below regarding the economy of Turkmenistan. The summary and statistics contains
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GDP (2002 est.): Purchasing power parity--$26 billion.
Real growth rate (2002 est.): 6%.
Inflation rate (2002 est.): 5%.
Per capita income (2002 est.): Purchasing power parity--$5,500.
Unemployment rate (2003 est.): 40%.
Agriculture: Products--cotton, grain, livestock.
Industry: Types--natural gas, oil, petroleum products, textiles, food processing.
Trade: Exports (2002 est.)--$2.97 billion: gas 57%, oil 26%; cotton fiber 3%; textiles 2%. Partners--Ukraine, Iran, Turkey, Russia, U.S., Italy, Switzerland. Imports (2002 est.)--$2.25 billion: machinery and equipment 60%, foodstuffs 15%. Partners--Turkey, Ukraine, U.S., Russia, U.A.E., France.
Debt--external (2001 est.): $2.3-$5 billion.
Economy of Turkmenistan
Turkmenistan was an important supplier of raw materials, especially cotton, oil, and natural gas, during the Soviet era. One-half of its irrigated land is planted in cotton, making it at one time the world's 10th-largest producer. However, poor crops in recent years have led to a decline in overall cotton production. Turkmenistan possesses the world's fifth-largest reserves of natural gas as well as substantial oil resources. Until 1993, Turkmenistan experienced less severe economic decline in comparison with other former Soviet states because it was able to sell its natural gas and oil at world prices. In 1994, the Russian Government refused to allow exported Turkmen gas to pass through Russian pipelines to hard currency markets. Industrial production of gas fell sharply, putting the budget into deficit--a deficit which has since continued to rise sharply. Currently, Turkmenistan is heavily dependent on Russian pipelines to reach markets in Europe.
After Russia's refusal to transport Turkmenistan's gas, a difficult investment environment, high rates of inflation, and heavy government regulations made further economic progress unlikely. In the absence of gas revenues, Turkmenistan turned to the export of cotton, but poor harvests have had weak economic returns. In 1996 the economy bottomed out, and inflation rates continued to climb. Although the government avoided privatization, it attempted to fix the situation by creating a stabilization program aimed at a unified and market-based exchange rate, the allocation of government credits by auction, and strict limits on budget deficits. However, partial price liberalization, the end of subsidies from Moscow, and poor control over fiscal and monetary aggregates contributed to the high rates of inflation and significant drops in living standards.
With an authoritarian post-communist regime in power, Turkmenistan has taken a cautious approach to economic reform, hoping to use gas and cotton sales to sustain its inefficient economy. Privatization goals remain limited. Between 1998 and 2002, Turkmenistan has suffered from the continued lack of adequate export routes for natural gas and from obligations on extensive short-term external debt. At the same time, however, the value of total exports has risen sharply because of higher international oil and gas prices. Prospects in the near future are discouraging because of widespread internal poverty, the burden of foreign debt, and the unwillingness of the government to adopt market-oriented reforms. Turkmenistan's economic statistics are closely held secrets, and published GDP and other figures are subject to wide margins of error. Turkmenistan has cooperated with the international community in transporting humanitarian aid to Afghanistan.