VZCZCXRO0642
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DE RUEHAH #0299/01 0641251
ZNR UUUUU ZZH
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FM AMEMBASSY ASHGABAT
TO RUEHC/SECSTATE WASHDC PRIORITY 2413
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE PRIORITY
RUCNCIS/CIS COLLECTIVE PRIORITY
RUCNMEM/EU MEMBER STATES COLLECTIVE PRIORITY
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RUEHKO/AMEMBASSY TOKYO PRIORITY 2528
RUEHIT/AMCONSUL ISTANBUL PRIORITY 3143
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RUEKJCS/JOINT STAFF WASHDC PRIORITY
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RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUEHRC/DEPT OF AGRICULTURE WASHDC PRIORITY

UNCLAS SECTION 01 OF 03 ASHGABAT 000299 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EEB 
 
E.O. 12958: N/A 
TAGS: PGOV SOCI ECON TX
 
SUBJECT:  TURKMENISTAN: UNEMPLOYMENT STILL THE ELEPHANT IN THE ROOM 
 
¶1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
¶2.  (SBU)  SUMMARY:  Unemployment is still a major problem in 
Turkmenistan.  President Berdimuhamedov's mandates, such as ending 
reductions in personnel in order to pay for wage increases and the 
reinstatement of ten years of schooling, have helped to slow the 
growth of unemployment.  However, Berdimuhamedov has not yet offered 
any concrete ideas for reducing unemployment.  Unemployment appears 
to be especially acute among those aged 16-24 and among rural 
residents.  Locals assess that the government has done little to 
create new jobs, and its modest efforts to help people find jobs has 
been corrupted by opportunism.  Even foreign businesses provide only 
a modicum of largely temporary relief for the problem, which seems 
destined to grow.  Promoting the development of more small- to 
medium-sized private businesses and allowing a more fertile 
environment for them to grow would help ease the stresses that 
unemployed youth could potentially put on this society.  END 
SUMMARY. 
 
GROWING POOL OF YOUNG AND UNEMPLOYED 
 
¶3.  (SBU)  The central government continues to be the most 
significant employer for Turkmenistan's population.  Seventy to 
eighty percent of the employed population is thought to be working 
in the public sector.  Government statements in recent years suggest 
that some twenty percent of the workforce is in the private sector 
or self-employed.  Official unemployment statistics have not been 
published in 13 years, however, making it difficult to evaluate such 
statements.  The last official survey, conducted in 1995, 
implausibly assessed unemployment to be three percent.  A 2006 Asian 
Development Bank report estimated that unemployment in the country 
was more than 50 percent.  Local residents consider the most 
vulnerable category of the population to be the 16-24 year old age 
group in both urban and rural areas.  The Ministry of Education 
reported that some 115,000 students graduated from high school in 
¶2008.  Our Public Diplomacy office, through its work on education 
programs, estimates that about 30,000 are enrolled in universities 
here and abroad annually.  Using these figures, it is possible to 
deduce that some 70,000 young people are entering the country's 
labor pool annually, equipped with a high school education. 
According to a Ministry of Education report presented at the Central 
Asian Republics and Kazakhstan (CARK) Education Forum in Dushanbe on 
June 7-8, 2005, only about 11 percent of 16-24 year olds were 
employed. 
 
GOVERNMENT JOB OFFICES ARE LITTLE HELP 
 
¶4.  (SBU)  Since 1997, the Turkmen government has operated "labor 
exchanges" or employment offices, operating as self-sustained 
entities under local governments.  Although most vacancies in the 
labor exchanges' databases are for unskilled positions, employment 
offices have not been effective in reducing unemployment, according 
to local staff.  Turkmenistan's regulations require that all 
vacancies be shared with interested applicants in such labor 
offices.  The hiring process in state agencies and enterprises is 
not transparent, however, and corruption has undermined the purpose 
and utility of these offices.  Job vacancies are concealed from job 
seekers, and hiring officers reportedly often hold the vacancies for 
their extended family members or sell them like a commodity.  A 
friend of a Pol/Econ local staff member said that she was asked to 
pay a $5,000 bribe to allow her son to apply for a junior staff 
position in a government agency.  The bribe, however, would not 
guarantee the person would get the job before he passed the official 
security and loyalty clearance process. 
 
HITCHES TO GOVERNMENT EMPLOYMENT 
 
¶5.  (SBU)  The government employment clearance process includes a 
criminal background check of the candidate, as well as members of 
his immediate and extended family, both alive and deceased.  Checks 
are also performed to ensure that neither the candidate nor any of 
his relatives were ever involved in any questionable activity that 
 
ASHGABAT 00000299  002 OF 003 
 
 
would put his political loyalty in doubt.  The security check is 
conducted by the Ministry of National Security (MNB) and can take 6 
months, according to local staff.  Upon successful completion of the 
clearance process, the candidate then signs a six-month labor 
contract.  Renewing this labor contract is dependent upon an 
employee's work performance and the loyalty he has demonstrated to 
his superiors.  Local staff report that it is common for corrupt 
managers to abuse this authority by pressuring employees to pay 
bribes to have their labor contract extended.  The relative of one 
local staff person who has been a secondary school teacher for over 
15 years, reported that the school's principal demands a $50 bribe 
from the teacher every time her contract must be extended.  (NOTE: 
The government introduced a 6-month labor contract system in 2005. 
The intention was to make it easier for government agencies to 
dismiss unwanted personnel after former President Niyazov ordered 
government entities to reduce their staffing.  His plan had been to 
apply the savings acquired through firings to pay for wage increases 
for everyone else.  This strange contract system is still in place. 
END NOTE.) 
 
GOVERNMENT EMPLOYMENT STRATEGIES NOT IDEAL 
 
¶6.  (SBU)  In the mid-1990s, ostensibly to help reduce unemployment, 
former President Niyazov built two textile complexes, each of which 
was to employ up to 3,000 people, as well as cotton mills that would 
employ 500 people in each of the five provinces.  In more recent 
years, however, due to low crop yields and ever-decreasing cotton 
production, these factories have all cut their labor force by some 
50 percent, according to local staff.  Today, a variety of factories 
and industrial complexes are appearing on the Turkmen landscape. 
Before a factory is even commissioned, however, the jobs they 
represent are often passed by provincial authorities to their 
extended family members, according to local staff.  Those without 
family connections might, however, get a factory job by paying a 
bribe of $300, but this is a significant amount of money for a 
provincial resident to come up with. 
 
¶7.  (SBU)  The government now requires that foreign businesses 
operating in Turkmenistan be staffed with at least 70 percent 
Turkmen citizens.  Foreign construction companies, in particular, 
are employing significant numbers of Turkmen, especially in and 
around Ashgabat.  However, employment with construction firms is 
short-term, and the average salary of $100 per month is low for 
unskilled laborers, considering the demanding nature of the work as 
well as the ten-hour days and six-day workweeks that are required. 
Nonetheless, local staff report that a significant number of 
unskilled laborers are migrating from northern and eastern rural 
regions to land one of these jobs.  The official hiring process for 
permanent positions requires that an employee be a registered 
resident of Ashgabat.  The lack of registration, therefore, can 
limit one's employment options even more.  Local staff report, 
however, that the Ashgabat residence requirement can be overcome by 
paying a bribe to the proper people.  Because of construction's 
temporary nature, those who migrate from the provinces to work in 
construction do not have the residency requirement.  (NOTE:  This 
likely makes unskilled construction work more alluring for rural 
residents.  END NOTE.) 
 
PRIVATE SECTOR OPPORTUNITIES HAVE THEIR LIMITS 
 
¶8.  (SBU) Employment opportunities in the private sector include 
jobs in the restaurant business, retail sales and private 
transportation and shipping services, as well as in the offices of 
diplomatic and international entities.  The jobs are often filled by 
people of a certain age and gender.  For example, restaurant and 
retail businesses hire only females 18-25 years old, and private 
security agencies hire only young men who completed their military 
service and are under 30.  Owners of private shipping companies 
prefer to hire experienced, middle-aged drivers.  However, in 
Turkmenistan's private sector, company owners and managers first 
offer available jobs to extended family members, according to local 
staff.  Self-employment is also very common.  This includes private 
 
ASHGABAT 00000299  003 OF 003 
 
 
cab drivers, food vendors, private caterers, seamstresses, 
hairdressers, welders, and plumbers.  People with post-secondary 
education often tutor schoolchildren as well. 
 
¶9.  (SBU)  COMMENT:  Although much of this is anecdotal, and there 
are no solid statistics, it does paint a picture of a labor 
environment with rigid employment regulations and a lack of 
transparency that has provided additional opportunities for 
corruption to those who wield any modicum of authority.  Regarding 
the number of high school-educated youth entering the labor force 
annually, this is an alarming concept to consider, in that societies 
with growing pools of unemployed youth without prospects tend to 
experience social and criminal stresses as a result.  Giving the 
private sector a little more room to grow, and promoting the 
development of more small to medium-sized businesses would likely 
help ease these stresses.  END COMMENT. 
 
MILES