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UNCLAS SECTION 01 OF 04 ASHGABAT 000298 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN; EEB 
PLEASE PASS TO USTDA DAN STEIN 
COMMERCE FOR HUEPER 
 
E.O. 12958: N/A 
TAGS: PGOV EIND EINV ECON TX
SUBJECT: TURKMENISTAN:  SAMPLING OF SELECTED MONTHLY EARNINGS - NOT 
A FAIR 
DAY'S WAGE 
 
REFS: A) 08 ASHGABAT 0562; B) 08 ASHGABAT 0546; C) 08 ASHGABAT 
01234 
 
¶1.  (U) Sensitive but unclassified. Not for Internet publication. 
 
¶2.  (SBU)  SUMMARY: In January 2009, the Turkmen government 
identified 2008 as 
a banner year in the economic health of the country, and increased 
local wages 
for its employees as well as other benefits by ten percent.  The 
increase, 
however, appears to have done little to ease financial pressures. 
Turkmen 
citizens - even those in government - are still looking for 
additional ways to 
earn money in an effort to keep up with inflation, which they 
believe is 
continually worsening.  Low wages appear to encourage people to 
pursue 
alternative, supplementary sources of income, using their available 
skills and 
resources, likely to the detriment of actual workplace productivity. 
 END 
SUMMARY. 
 
ECONOMY SAID TO BE BOOMING... 
 
¶3.  (SBU)  During the Cabinet of Ministers' annual review session in 
January, 
former Deputy Chairman for Economy and Finance Geldimuradov reported 
on the 
results of Turkmenistan's social and economic development program in 
¶2008. 
According to Geldimuradov, the GDP in 2008 grew 10.5 percent, rising 
to 43.68 
billion redenominated manat (USD 15.3 billion).  Overall economic 
growth was 
spurred by a reported 37.8 percent surge in industrial production 
over the 
course of the year and a 32.5 percent jump in construction activity, 
according 
to Geldimuradov's report.  Both of these areas, he said, were 
boosted by a 
"significant" increase in investment activity in the country. 
Industrial 
production benefited from a reported tripling of foreign investment 
in the 
country's energy sector.  The government claimed that total 
investment in 2008 
amounted to USD 4.5 billion.  Domestically, Turkmen budgetary 
revenues 
reportedly more than doubled in 2008, as compared to 2007. 
 
...BUT GOVERNMENT WAGES AND BENEFITS STILL LOW 
 
¶4.  (SBU)  In September 2008, President Berdimuhamedov instructed 
all state 
institutions and agencies to increase monthly salaries, allowances, 
pensions 
and scholarships by 10 percent beginning with January 2009.  (NOTE: 
The 
government is still the largest employer here, from cabinet chairmen 
to 
pilots, street sweepers to school teachers.  END NOTE.)  With the 
newly- 
adopted salary scale, the average monthly salary of state employees 
is still 
just USD 190, and the maximum pension one could receive is USD 170. 
 
ASHGABAT 00000298  002 OF 004 
 
 
Elderly 
citizens who were employed for less than 25 years (20 for women) are 
eligible 
for a monthly pension of just USD 27.  The minimum monthly pension 
for a 
retiree who worked the full 20 or 25 years, respectively, is USD 39, 
while the 
average pension that Turkmen government retirees earn is reportedly 
USD 116. 
Pensions for World War II veterans range from USD 139 to USD 185. 
In 
addition, the government provides a monthly social benefit of USD 19 
for 
children, USD 50 for handicapped people and USD 77 for widows of war 
veterans. 
Local staffers report that the approximate monthly wages for a 
cross-section 
of state employees are as follows: junior office staff in the oil 
and gas 
ministry - USD 270, drill operators at oil and gas fields - up to 
USD 1200, 
senior accountants at Turkmen Airlines - USD 250, international 
flight 
attendants at Turkmen Airlines - up to USD 1000, junior and 
mid-level law 
enforcement and military personnel - USD 250-270, doctors - USD 210, 
and 
teachers - up to USD 350.  (NOTE:  The higher pay for drill 
operators and 
flight attendants may correspond to the number of hours people in 
these 
professions work - often in excess of 70 hours per week.  END 
NOTE.) 
 
EARNING A LIVING--OUTSIDE THE WORKPLACE 
 
¶5.  (SBU)  Despite the government's 2008 wage increase, a 
significant number 
of government employees still seek out additional sources of income 
to cover 
daily expenses.  For example, both unemployed and even 
state-employed car 
owners usually drive their vehicles around Ashgabat and other 
cities, offering 
private taxi services.  It is one of the most popular ways for 
Turkmen to earn 
extra cash to provide for their families.  Others seek to earn extra 
money by 
making use of their skills, qualifications or even posts.  For 
example, 
teachers usually offer extra tutoring for pupils after regular 
school hours, 
while doctors unofficially receive patients in the hospitals where 
they work, 
directing patients willing to pay for better service to bypass the 
cash desk. 
Some people run small commercial shops and sell consumer goods and 
food.  In 
addition, many Turkmen women make and sell baked goods, canned 
fruits and 
vegetables, and embroidery, while men repair and trade new or used 
cars. 
Earnings from these unofficial activities can make a big difference 
in the 
financial well-being of families, often doubling or even tripling a 
person's 
monthly wages. 
 
 
ASHGABAT 00000298  003 OF 004 
 
 
SUBSIDIES ARE DISINTEGRATING 
 
¶6.  (SBU)  "New money - new life!" was the official slogan the 
government that 
appeared on announcements introducing the redenominated manat in 
January 2009. 
Local staff report that the redenomination had a dark side when it 
spurred 
local traders to inflate their prices for food and clothing after 
the first of 
the year.  In 2007 and 2008, the government had already 
significantly cut away 
many subsidies on which citizens relied: the price of gasoline rose 
almost 800 
percent, airline ticket prices rose 100 percent, and even the cost 
of bus 
tickets rose 200 percent (Ref A).  Prices for basic staples have 
continued to 
rise, climbing 30 percent in the course of 2008 for bread, eggs, and 
beef at 
outlets not directly controlled by the government (Refs B and C). 
The 
difference between private vendors and state subsidized outlets is 
most 
visible when it comes to bread.  Lines form at state-owned stores 
for price- 
controlled bread sold for 7 cents a loaf, while no lines are found 
at the many 
private vendors selling the same bread at three to four times that 
price. 
 
RISING PRICES, BUT LIMITED CONTROL 
 
¶7.  (SBU)  The practice of reselling or selling at above the 
"official" price 
had been discouraged in previous years, but locals report that there 
seems to 
be little interest in controlling such activity now.  One Turkmen 
described 
the old system: "The police would come into the bazaar, ask how much 
something 
was, say it was "too much" and demand that the vendor sell it for 
less.  That 
was our price control system."  These days, everyone ignores the 
official 
prices posted at the entrances to bazaars, and the authorities only 
rarely 
come in demanding that vendors keep prices down, according to local 
staff.  In 
January 2009, the government reported that inflation had been 8.9 
percent in 
¶2008.  (NOTE:  The CIA World Factbook estimated it to have been 
about 18 
percent in 2008.  END NOTE)  Turkmen living in Ashgabat, at least, 
are 
skeptical of the official inflation figure, and seem to believe it 
is much 
higher, and on the rise. 
 
¶8.  (SBU)  COMMENT:  Monthly government wages are low across the 
board.  This 
appears to have played a key role in promoting the development of 
alternate 
ways of earning income where people use their skills and resources 
outside 
their official workplace, to the detriment of actual workplace 
productivity. 
There is also little doubt that low pay and the alternate 
 
ASHGABAT 00000298  004.3 OF 004 
 
 
income-earning 
system have both contributed to the culture of corruption that is so 
endemic 
here, because corruption provides another opportunity to fill in 
financial 
gaps.  Any effort to improve institutional capacity and 
functionality, or to 
curb corruption, for that matter, would need to include strategies 
for raising 
wage levels and keeping productivity focused on the workplace, 
rather than on 
the "other job."  END COMMENT. 
 
MILES