Last Updated on 03/23/2023 by Sophia
Turkmenistan Financial Policies
Turkmenistan has a trade-dependent economy which it seeks to diversify. For a long time, Turkmenistan’s economic development has been dependent on the export of natural resources and cotton. Due to the economic crisis experienced due to the fluctuation of natural gas prices, the country has sought to move away from an economy dependent on the export of natural resources(United States Department of State [USDS], 2019). However, little has been achieved due to weak financial policies that keep financial investors away. Here are some of the things that Turkmenistan can do to improve its financial policies.
Turkmenistan has rich natural gas fields that many investors would wish to explore and mine. However, investors kept off because only investors linked to the president’s family have access to mine in these fields (USDS, 2019). To change its financial policies, the country needs to diversify the investors who can mine in their field. Having investors from different countries would save the country from fluctuations in natural gas prices in certain countries. Traders who have invested in the country have left the country due to non-payment of orders completed. This has kept potential investors, and the country needs to rectify it. In doing so, the country needs to set up new contract laws and abide by them in all situations (USDS, 2019). This will make the country’s transacting technique with investors more stable, and it will earn investors’ trust.
The country also needs to move from an exchange process controlled by the government to one that goes with the changes in the markets. Previously, investors have had a hard time converting local money into hard cash to send their profits back home. This is a bad track record of hosting investors (USDS, 2019). The country needs to be more open and transparent on the exchange rate. Ownership laws also need to be restructured. As currently comprised, all land belongs to the government, and other ownership forms are also limited. As a result, FPI in this country is almost impossible, and companies have to operate on government property, which can be taken away at any time. Investors need an assurance that they can invest in Turkmenistan’s property without fear of it being taken back, which can only be assured through the restructuring of ownership laws.
United States Department of State. (2019, August 29). Turkmenistan. https://www.state.gov/reports/2019-investment-climate-statements/turkmenistan/