Ashgabat, 9 June 2016 (nCa) — The lingering low prices of oil, the uncertainty in the global banking and finance sectors and the artificially created economic crises authored by certain countries have created formidable obstacles for Turkmenistan.
The country has risen to the challenge.
There is the massive drive to redesign the economy to curtail dependence on the hydrocarbon revenues and make Turkmenistan the net exporter in a number of key areas. The stress is on reducing imports and boosting exports.
There is also the awareness and acknowledgment that the local companies, especially the construction companies, have gained sufficient experience to handle mega projects on their own.
In a breakthrough session Wednesday (8 June 2016), President Berdymuhamedov announced that his administration had decided to award a number of contracts, including some mega projects, to the local companies.
All of the companies for these contracts are members of the UIET (union of industrialists and entrepreneurs of Turkmenistan), an umbrella organization which has some 14500 small and medium enterprises as its members. Established in 2008, UIET serves as the hub for private sector.
Here is the partial list of the projects announced Wednesday:
- Ashgabat-Turkmenabat highway – length 621 km, includes 8 interchanges and bridges, rest stops, shopping areas, restaurants, this is a mega project
- Potash-based products plant – will use the Potash mined from Koytendag area of Lebap province, annual capacity of 3 million tons of non-metallic materials and one million tons of potassium chloride, this is also a mega project
- Cement factory at Jebel area of Balkan province – annual capacity 300000 tons, will provide jobs to 200 people
- Rock salt plant at Koytendag district of Lebap province – annual production capacity 15000 tons, will provide jobs to 50 people, funding by entrepreneurs from own sources
- Gypsum products and dry building mixtures plant at Koytendag – annual production capacity 6000 tons
- Ozokerite (naturally occurring paraffin was, also called earth wax) plant – In Hazar town of Balkan province, annual capacity 1000 tons, will provide 40 jobs, funding by entrepreneurs from own sources
- Two iodine plants in Balkan province – funding by entrepreneurs from own sources
- Two factories for tiles and decorative stones – one in Balkan and one in Ahal province, combined capacity 50 million square meters, will open 50 jobs, funding by entrepreneurs from own sources
- Basalt, basalt fiber plant in Turkmenbashy district – annual capacity 3500 tons, will meet total local demand in this area and also potential for export, funding by entrepreneurs from own sources and bank financing
- Tin and tin products plant at Kipchak area of Ashgabat and Ak Bugday district of Ahal province – will produce 72 million syringes, fully meeting local demand and with export potential
- Cotton yarn mills in Ak Bugday district of Ahal province
- Creation of an international logistics centre to meet the needs of AIMAG 2017, in collaboration with UPS which has the service experience of Beijing Olympics 2008 and London Olympics 2012.
- Bakery and wheat products plant in Ashgabat – will produce 25 kinds of bread
- Assorted shopping and entertainment centres
The business community, showing a sense of duty in times of challenge, vowed to complete most of these projects from their own resources rather than depending on public funding.
Some entrepreneurs, speaking on behalf of the business community of the province they represented, offered to provide funding from own sources for some of the approved projects and also proposed some new projects for which they will not seed public funding:
- Muhammetnurov of Derya Plastic, speaking on behalf of Ahal province – in Goekdepe district a plant for facing tiles and stones with annual capacity 50000 square meters, a plant for production of alcohol in Baharly district with annual capacity of 12000 tons, a plant in Goekdepe district with annual capacity for 50000 tons of wheat flour and 36000 tons of pasta
- Ataev of Hazar Balyk, speaking on behalf of Balkan province – cement plant in Jebal with annual capacity of 300000 tons, Ozokerite plantn in Hazar area with annual capacity of 1000 tons, in Gamyshlyja and Ekerem areas of Esenguly district plants for production of decorative stones and tiles with annual capacity of 50000 square meters, in Gulf of Garabogazgol a venture for production of dry feed for fish with annual capacity of 60 tons, in Turkmenbashy district shopping and entertainment centre Tolkun
- Ahmedov speaking on behalf of Dashoguz province – in Ak Bugday district of Ahal province a bakery and plant for wheat and alcoholic products, in Goekdepe district of Ahal province nursery for cultivation of flowers, seedlings and saplings for fruit and ornamental trees.
- Khudayberdiev of Muradov enterprise on behalf of Lebap province – in Koytendag district a plant for rock salt with annual capacity of 15000 tons, a plant for production of gypsum products with annual capacity 60000 tons.
- Jumamuradova on behalf of Mary province – in Mary district a dairy and milk processing enterprise with annual capacity 50000 tons, a plant in Shatlyk village for production of Glycyrrhizic acid from licorice root.
- Annamammedov, the UIEP rep in China, speaking on behalf of Ashgabat business community – proposal for permanent transfer of land to entrepreneurs on permanent basis for envisaged projects, offered (on behalf of various companies) to build in Ashgabat and suburbs health and beauty centres, shopping and entertainment centres, floriculture centres, bakeries and bread products facilities, housing blocks in Keshi.
Dadaev, the chairman of UIET gave some facts and figures in his speech: UIET members, since its establishment in 2008, have invested Manat 8.1 billion in the national economy. During this period the construction work done by the UIET members amounted to Manat 20.7 billion. Under different government opened 380 new enterprises.
The UIET members established more than 360 enterprises in the agriculture sector including 80 livestock and poultry farms, 78 greenhouses with total covered area of 25 hectares for vegetable and fruit farming.
Currently there are under construction some 270 projects including basalt fiber plant, plastic pipe plant, ceramic tile plant and plumbing products plant.
The private sector provides employment to about 150000 people.
Union of industrialists and entrepreneurs maintains trade offices in China, Kyrgyzstan and Georgia. Work is in hand to open trade rep office in Dubai.
The confectionery products of Turkmenistan are exported to some 7 countries. There are about 70 stores in Afghanistan carrying the confectionery products of Hasar, the top candy and confectionery producer of Turkmenistan.
More than 14500 small and medium enterprises are members of the union of industrialists and entrepreneurs.
UIEP established in March 2008. The Party of industrialists and entrepreneurs, a political party with some representation in the parliament, was launched in 2012.
During the meeting the president approved the list of goods that will be exempt from export duties. He also signed the decree for allocation of land on permanent basis for the designated projects in all the provinces and Ashgabat.
Some enterprises, in collaboration with the ministry of trade and foreign economic relations, are allowed to export their surplus production of eggs.
The private enterprises engaged in fish farming are now exempt from land tax and leasing tax. All of these provisions come into force with effect from 1 July 2016.
The economy of Turkmenistan, despite all odds, has maintained a GDP growth rate of 6% this year and it is expected to improve slightly by the end of the year.