The government of Turkmenistan frequently mentions the need for diversification in its policy statements.
What is the concept of diversification from the point of view of Turkmenistan?
From time to time we have spoken to different senior officials in Turkmenistan about their idea of diversification.
Here is what we have learned:
There are four main components of the concept of diversification in Turkmenistan:
- Diversification as part of a holistic approach
Turkmenistan follows a holistic approach – everything is connected with everything else. Diversification is also part of the holistic view. It means that: 1. Diversification cannot happen in isolation; it has to be a part of the whole. 2. Diversification in one area – in this case hydrocarbon sector – will involuntarily trigger diversification in all the other related areas. It is ripple effect.
- Diversification should be in line with the policies of Turkmenistan
Turkmenistan firmly believes that politics and economy should not be mixed. Turkmenistan also examines every policy stance through the prism of its neutrality. Turkmenistan also believes in strong social and ecological responsibilities in every area of decision-making including manufacturing and production. The diversification, whenever and wherever it happens, must satisfy these conditions.
- Diversification as a cluster of approaches connecting markets and products
If a new market is emerging, an existing or new product should be offered to fill it. If an existing product is in surplus or a new product has been developed, a new market should be found for it. This is the basic cycle of demand and supply. Turkmenistan understands and appreciates this mechanism but endorses it with an important caveat: A product should always be under scrutiny with the view to improve it and to refine its production process to comply with the stringent environmental and safety guidelines. The introduction of this qualification divides the process of diversification into two interconnected parts: 1. External diversification for connecting products with the markets, and 2. Internal diversification to introduce, improve, or discontinue a product under the voluntary obligations of social and ecological responsibility.
- Anticipatory diversification
Anticipatory diversification is when the need is still not felt widely but the studies show that there is going to be a need and a product or line of products will be required to fill the need. The birthplace for this kind of diversification is the R&D department, the lab, the think tank, even a work of fiction. As an immediate and directly relevant example, the post-Covid-19 world would demand a comprehensive round of diversification.
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Regardless of how diversification is understood across the industries and spheres of economy, we have reached the threshold of the unknown.
Each foreign partner of Turkmenistan will have their own vision of making use of Turkmenistan’s offer for participation in diversification.
Processing of hydrocarbon resources is just one of the areas that expand the range of potential diversification activities of foreign partners.
We should also keep in view that the private sector is planning a number of major projects in downstream processing. This would add to the stack of possibilities.
The time has arrived to push the horizon. /// nCa, 31 March 2020
To be continued . . .