Turkmenistan currency

Turkmenistan Economic Policy and Structural Problems


The country’s currency is the New Turkmenistan Manat (ISO-4217 code: TMT). One TMT corresponds to 100 teňňe. In January 2009, the TMT replaced the previously valid Turkmenistan manat at a rate of 1 to 5,000. The exchange rate to the US dollar is fixed by the state and has been exactly 3.41 TMT per US dollar since 01/01/2015. On the black market, the US dollar can currently be exchanged for 4 to 7 TMT, depending on the region (and negotiating skills).

According to healthinclude, the Turkmenistan economic system is still largely state-run. The state is the only supplier of inputs to companies and is the only buyer of finished goods and products at the end of the production chain. The state-owned companies and companies have no access to the world market and are obliged to sell their products at the prices set by the state. Numerous products and services are highly subsidized by the Turkmenistan government or given to the population free of charge.

Turkmenistan currency

According to official information, this system of state economy is extremely successful. According to this, the real economic growth is at least 10% annually and thus reaches one of the highest values in the world every year. In 2016, for example, Turkmenistan would have been the third fastest growing economy in the world after Qatar and Mongolia. Independent verification of these numbers is difficult, but observers believe that government reports are not always reliable and the actual growth rates can be up to 20 percentage points below those officially announced. This observation leads to the unhelpful conclusion that Turkmen’s economic growth in recent years has probably been between minus two and plus> 20%.

If the trend continues to deteriorate, Turkmenistan is currently still considered the most investment-hostile country in the world, behind countries such as North Korea, East Timor and Myanmar.

Beyond such information, some peculiarities of the Turkmenistan economic system can also be identified:



Turkmenistan is one of the most corrupt countries in the world. Corruption is accordingly one of the greatest obstacles to sustainable economic development. This determines almost every area of economic life and makes foreign involvement considerably more difficult. Accordingly, the country has been in the bottom of the corruption index published by Transparency International for years (167th place out of 180 in 2018) as well as in the index of economic freedom published by the Heritage Foundation (164th place out of 180 in 2018). The anti-corruption legislation is in line with its role in securing power largely ineffective. Its main purpose is to serve as a template for the dismissal of unpopular people. The country ranks worst in the world in numerous sub-categories of the index. Ultimately, the government finds itself in the dilemma of having to rely on a comprehensively corrupt system to secure its rule on the one hand, and at the same time making progressive economic development significantly more difficult or even completely stifling it through corruption affecting all areas of life. Officials employees expect financial compensation for making contact in standard bureaucratic procedures. Other reports also describe the level of corruption in Turkmenistan as widespread. See that explicitly. The US State Department widespread corruption in all areas of public life and the Turkmenistan economic system, and at the same time recognizes a reluctance of the Turkmenistan government to fight it effectively.

The International Institute for Political Expertise comes to a similar assessment in its extensive report on the opportunities and risks of foreign direct investment in Turkmenistan. The detailed and mostly correct representations of the report offer a comprehensive analysis of the essential potentials and risks of foreign direct investments in Turkmenistan and should therefore be of considerable interest, especially for medium-sized foreign companies.


Another problem is the outdated infrastructure in many areas(Country overview – infrastructure). This affects the transport infrastructure and the pipeline network as well as, for example, the gas and water pipes to the end consumers. For the most part, this dates back to the time of the large Soviet investments during the 1950’s to early 1970’s and, in the gas sector, especially to the 1960’s to late 1970’s. Since then, plants have only been modernized or newly built (mostly with Chinese support) in isolated cases. And only in a few prestigious areas (e.g. airports and prestigious factories) as well as in the vicinity of the capital was increased investment in modern infrastructure. In particular, the new Ashgabat Airport is considered to be a prime example of the government’s fondness for building ” White Elephants ” due to the construction costs”. The construction costs of the airport are estimated at around 2.25 billion US $. The capacity of the airport is around 1,600 passengers per hour or around 17,000,000 arrivals and departures per year. In the opening speech the President gave the im As a reference, he pointed out that Turkmenistan has the potential to become the future hub for global freight and passenger flows, provided that adequate infrastructure is in place around 105,000 people in Turkmenistan, around 80,000 of whom used the airport for arrival and departure, making the occupancy a little less than 5%.

In general, with regard to the Turkmenistan infrastructure, there is predominantly talk of potentials, the realization of which, due to the economic policy prioritization, lags far behind the actual possibilities with regard to both the infrastructural hardware and its usability.

More detailed information on individual aspects of the Turkmenistan infrastructure can be found on thematically focused websites. This applies, for example, to aspects of the Turkmenistan gas industry or the country’s water pipes and irrigation systems.


In addition, there is a lack of supplier companies in many industrial sectors, so that existing companies are dependent on permanent imports. In fact, large parts of the industry mainly serve to absorb the surplus of labor or to produce prestigious high-end products (such as solar cells). Hence, observers argue that despite the demand for modern machines, for example, it is often pointless was to participate in Turkmenistan fair as an international company. This observation is all the more remarkable as the fact that the production facilities, the know-how and the inputs necessary for production are acquired completely or permanently abroad, so that there is no significant added value in Turkmenistan. In addition, no markets or customer groups could yet be defined for such products. The export of Turkmenistan goods is made even more difficult by the extremely high exchange rate of the new Turkmenistan manat. To make matters worse, the Turkmenistan oil and gas industry is now also affected by the extensive economic crisis.


The Turkmenistan manat is tied to the US dollar. Although the inflation rate in Turkmenistan has been in the double-digit range for many years and may still be (reliable current information is not available), the exchange rate of 3.41 TMT to the US dollar has remained unchanged so far. This results in a relative increase in the price of Turkmenistan products, which additionally worsens their competitiveness. On the other hand, the government benefited from the exchange rate, which hardly reflects the real conditions, since the vast majority of consumer and capital goods have to be imported and can therefore be bought comparatively cheaply. Since the trading companies are without exception in state hands, the government can either reap the exchange rate gains itself or pass it on to consumers in the form of subsidized prices.

Without exception, there are occasional adjustments to the exchange rate. Nothing is known about the motivation for adjustments in one direction or the other. This results in considerable uncertainty on the part of the Turkmenistan population. The most recent unannounced exchange rate adjustment took place on January 1, 2015, when the price for one US dollar was raised from 2.85 manat to 3.41 manat. The roughly 18 percent devaluation of the manat was accompanied by a corresponding increase in the price of imported goods. The mentioned uncertainty is also a reason for rumors can regularly spread rapidly about impending currency appreciations and depreciations. As a result, there are frequent panic buying and selling of the local currency.


The property rights of Turkmens are only protected as long as they do not run counter to the interests of the state. For example, within the framework of infrastructure and construction programs, the (largely) compensation-free expropriation of house and property owners occurs with great regularity.

 White elephants

A considerable (possibly the predominant) part of government expenditure is not investment in the traditional sense, but expenditure on “white elephants”. The Turkmenistan government spends money on prestige objects, which, due to their high construction and follow-up costs, place a long-term burden on the state budget with no recognizable added value. In 2010 and 2011 alone, more than 23 billion US dollars were budgeted for the new construction of hundreds of buildings, mostly clad in white marble.

Reasons for the construction, in addition to the attempt to gain international reputation, are, for example, ensuring a constant order situation for construction companies that are to be integrated into clientelist groups or supplying parts of the population with work. In this sense, homes and factories can also be white elephants if (as in large parts of the capital) they are built without any recognizable need. Such decisions initiated by power politics are accordingly only rarely (or by chance) economically sensible and often produce less output in the long term than they simultaneously need in terms of inputs.

For more than two decades, significantly more money has been spent on symbolizing prosperity than on economic development. It is noteworthy that the sometimes unacceptable living conditions of large parts of the Turkmenistan population offer numerous opportunities for a sensible investment of the pension income. The erection of prestige buildings is therefore not only associated with high costs, but also with high opportunity costs due to the simultaneous waiver of measures for example to develop the infrastructure, to promote the quality of life or to establish a functioning economic basis.

The extent to which construction planning has missed real needs for decades is evident not least from the extremely low traffic density on the up to six-lane traffic axes, the lack of passers-by in malls and amusement parks, the extreme vacancy in the extensive apartment complexes and the sparsely visited parks.

Examples of these prestigious buildings are:

> 5 billion euros:

– ” Golden Age ” lake in the north-west of the country (estimated: € 18 billion)

– the 10-day Asian Indoor and Martial Arts Games in 2017 (estimated: € 5 billion were alone for sports facilities spent € 10 billion more than for the whole event)

– Avaza holiday complex near Turkmenbaschi (2009 estimate: 5 billion US dollars, probably significantly more)

> 1 billion euros:

– Ashgabat Airport (estimated: € 2.25 billion)

> 100 million euros

– the Presidential Palace in Ashgabat (estimated: 350 million US dollars)

– the new zoo in the capital (estimated: two to three-digit million amount)

– the largest octagonal star in the world – Ashgabat TV tower (estimated: 184 million US dollars)

– the wedding palace in Ashgabat (estimated: € 100 million)

<100 million euros

– the largest indoor ferris wheel in the world (estimated: 90 million US dollars)

– Constitutional Monument ($ 60 million)