VZCZCXYZ0000
PP RUEHWEB

DE RUEHAH #0097/01 0211302
ZNR UUUUU ZZH
P 211302Z JAN 10
FM AMEMBASSY ASHGABAT
TO RUEHC/SECSTATE WASHDC 4106
INFO RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUCNCIS/CIS COLLECTIVE
RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHAK/AMEMBASSY ANKARA 6149
RUEHBJ/AMEMBASSY BEIJING 3835
RUEHKO/AMEMBASSY TOKYO 3694
RUEHIT/AMCONSUL ISTANBUL 4393
RUCNDT/USMISSION USUN NEW YORK 1428
RHMCSUU/CDR USCENTCOM MACDILL AFB FL
RUEHVEN/USMISSION USOSCE 4319
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHDC
RHEHNSC/NSC WASHDC
RUEKJCS/SECDEF WASHDC
RUEKJCS/JOINT STAFF WASHDC

UNCLAS ASHGABAT 000097 
 
SENSITIVE 
 
SIPDIS 
 
STATE FOR SCA/CEN; EEB 
ENERGY FOR EKIMOFF/BURPOE/COHEN 
COMMERCE FOR EHOUSE/DSTARKS 
 
E.O. 12958: N/A 
TAGS: ECON EPET PGOV EINV TX
SUBJECT: TURKMENISTAN: GOVERNMENT CLAIMS GDP GROWTH; INCREASED 
INTERNAL CONSUMPTION 
 
¶1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
¶2.  (SBU) SUMMARY:  On January 14, "Neytralniy Turkmenistan" 
newspaper published an article on Turkmenistan's economic 
development during the global financial crisis.  The article 
provides statistical data for 2009 and claims that Turkmenistan 
managed to achieve more than six percent GDP growth during 2009.  It 
emphasized that the country achieved this result by switching from 
raw materials exports to internal consumption.  Turkmenistan's State 
Statistics Committee authored the article, which appeared the day 
before President Berdimuhamedov held a Cabinet meeting dedicated to 
a review of outcomes for 2009.  END SUMMARY. 
 
¶3.  (SBU) The article starts with a short description of events 
leading to the global financial crisis, pointing out that the crisis 
originated in the U.S. as a result of the activity of "certain 
complicated financial structures," which do not exist in developing 
countries as a rule.  The authors did not indicate whether they 
believe that the absence of these "financial structures" in 
developing countries such as Turkmenistan was positive. 
 
¶4.  (SBU) The article also asserts that an IMF mission, which 
visited Turkmenistan December 2-10, 2009, positively assessed 
Turkmenistan's economic policy during the crisis.  The authors cite 
IMF Managing Director Dominique Strauss-Kahn as saying that emerging 
Asian economies are switching from exports to internal consumption 
to support local producers.  The article states that Turkmenistan is 
a good example of an emerging economy that implemented this 
transition during 2009. 
 
¶5.  (SBU) In re-orienting the economy toward "internal consumption," 
the authors refer to projects financed through the country's own 
financial reserves as well as foreign direct investment (FDI).  FDI 
amounted to 30 percent of total investment for 2009.  The article 
did not specify the amount of investment for 2009, but indicated 
that 70 percent of total investment was directed to the production 
sector, while 30 percent went to the service sector.  Among the 
largest projects in the production sector were: the Turkmen section 
of the Central Asia-China gas pipeline project; the Kiyanly Liquid 
Petroleum Gas Terminal; the cotton-spinning factory in Turkmenabat, 
which is the largest in the country with a capacity of 17,700 tons 
of cotton yarn per year; and the Awaza Tourist Zone project. 
 
¶6.  (SBU) According to the article, construction, metal-working, 
chemical industry, textile, agriculture, and transportation sectors 
recorded growth in 2009.  However, the article does not contain any 
information about the energy sector, which obviously declined in 
2009, when gas production fell nearly 50 percent due to the 
suspension of gas exports to Russia. 
 
¶7.  (SBU) The article predicts continued positive economic growth 
for 2010, stating that the global economy will begin to recover. 
The authors assert that energy-exporting countries will have the 
highest growth rates in 2010.  The article also states that the 
Turkmen economy's dependence on energy exports will decrease on the 
account of growth in Turkmenistan's agriculture, transportation, 
communications, construction, and textile sectors.  The article also 
notes that Turkmenistan will invest $12 billion in its national 
economy in 2010. 
 
¶8.  (SBU) COMMENT:  The article tries to show that the Turkmen 
Government managed to keep its economy afloat while the global 
crisis severely hit the outside world.  It is difficult to accept 
the six percent GDP growth reported for 2009, especially since the 
country did not ship gas to Russia for nine months.  The government 
does not release detailed economic statistics and does not disclose 
its statistical methodologies for calculating Turkmenistan's GDP. 
Still, taken on its face, the government acknowledged that economic 
 
 
growth in 2009 dropped below the 2008 level.  Given economic 
conditions in the rest of the world during 2009, even the lower 
growth rate, if accurate, would be an enviable accomplishment.  END 
COMMENT. 
 
CURRAN