ADB supporting diversification of Turkmen economy

By  Trend

President of the Asian Development Bank (ADB) Takehiko Nakao met with Turkmenistan’s President Gurbanguly Berdimuhamedov to discuss the country’s development priorities and reiterate support for the government’s efforts to diversify the economy, said the ADB in a message.

Nakao’s first visit to Turkmenistan also includes meetings with Deputy Chairmen of the Cabinet of Ministers in charge of foreign affairs, economy and finance, hydrocarbon sector, electricity and construction sectors, and the Chairman of the Board of the Central Bank of Turkmenistan and ADB Governor.

“Policies to expand manufacturing, promote local value chains and integrate them into the global ones are critical to create stronger and more balanced growth in Turkmenistan,” said Nakao. “They will reduce the country’s dependence on the hydrocarbon sector and will help to create jobs for its growing working-age population.”

Turkmenistan’s economy relies heavily on oil and gas, which account for over 85 percent of the country’s exports. The earnings from hydrocarbon exports are expected to remain weak in the medium term due to low global energy prices. Nevertheless, the country’s economic growth is projected to average about 6 percent in 2016–2017.

The ADB has provided strong support for the Turkmenistan–Afghanistan–Pakistan–India (TAPI) Natural Gas Pipeline, serving as the TAPI secretariat since 2003 and as transaction advisor since 2013. Once completed, the pipeline will export up to 33 billion cubic meters of natural gas per year from Turkmenistan to Afghanistan, Pakistan, and India. The pipeline will provide Turkmenistan with a larger market for its gas exports and generate greater revenues to support high value-added economic activities in the country.

For the next phase, the ADB will be pleased to act as financial advisor to mobilize resources from other financial institutions. The ADB will also consider financing shareholder equity in the TAPI project company, and provide non-sovereign loans and credit enhancement. Since 2010,
Turkmenistan has also benefited from the Central Asia Regional Economic Cooperation Program through transport and energy projects.

Since Turkmenistan joined ADB in 2000, ADB’s assistance has focused on modernizing the transport sector and increasing the country’s share of regional trade. The ADB provided $125 million to finance the North–South Railway Project - signalization of 288 kilometers of railway between Chilmammet and Buzkhun - has improved the transport link for regional trade from Turkmenistan to Kazakhstan, Iran, the Persian Gulf countries, Russia, and South Asia.

ADB is in the midst of preparing its new country partnership strategy with Turkmenistan for 2017–2021 to help the country achieve its national development agenda, as reflected in the government’s National Program of Social and Economic Development 2011–2030. To support efforts to diversify the economy the ADB plans operations in regional infrastructure, access to finance and potentially education in the social sectors.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB in December 2016 will mark 50 years of development partnership in the region. It is owned by 67 members – 48 from the region. In 2015, ADB assistance totaled $27.2 billion, including co-financing of $10.7 billion.