Turkmenistan, 2017–2021—Catalyzing Regional Cooperation and Integration, and Economic Diversification

Abstract

Turkmenistan is the 12th-largest natural gas producer in the world with fourth-largest natural gas reserves, and the 10th-largest oil producer in Asia and the Pacific. Its gross domestic product (GDP) grew at 12.3% per year on average during 1998–2016 and the country was classified as upper middle-income in October 2012. Natural gas, oil, and oil-related products consistently averaged close to 90% of annual exports during 2001–2015. Highly concentrated export basket and export markets have made growth susceptible to an adverse external environment, such as low global oil prices and slowdown in the country’s trading partners since mid-2014. As a result, GDP growth fell from 10.3% in 2014 to 6.2% in 2016, with real non-hydrocarbon GDP growing faster than real hydrocarbon GDP. Turkmenistan’s key challenge is how to shift to a growth model anchored on economic diversification. As for the non-hydrocarbon segments, the challenge is to raise productivity in agriculture, which still accounts for 43% of the labor force; ensure that more students who have completed 12 years of basic and secondary education proceed to higher education or technical and vocational education and training (TVET); and increase private sector contributions to the non-hydrocarbon economy.