Turkmen leader orders government to diversify energy-dependent economy

Apr 05, 2015 12:00 AM

The president of energy-rich Turkmenistan said in comments broadcast Saturday that his energy dependent country has been hit hard by low oil prices and he urged the government to diversify the economy. In a rare admission of the ex-Soviet nation''s economic troubles, President Gurbanguly Berdymukhamedov said the country needed to boost earnings and urged officials to cut spending.

"The problems of the world economy have had a negative impact," Berdymukhamedov told government officials at a cabinet meeting, although the comments were only aired on state television Saturday.

"These difficulties are increasingly affecting our country, (and) to a certain extent are stifling economic growth." "In such conditions we are our economic policies," he told the cabinet meeting, urging officials to revise the state budget.

Efforts have been made to boost domestic industries not related to oil and gas, he said, adding that exports from these industries only amounted to $1 billion.

He demanded that the government increase this figure to $5 billion by 2020. "Our country has rich reserves of natural resources," Berdymukhamedov said. In this regard, I believe that we can create a lot of enterprises able to produce high-quality products no worse than the imported products we are now using hard currency to purchase."

The government of the Central Asian country does not typically make public comments about the country's economic problems.

Turkmens were shocked when authorities devalued the national manat currency by a fifth at the beginning of the year.

Berdymukhamedov said at the time that the "extraordinary step" was triggered by low prices for gas and oil, which make up more than 90 percent of the country''s exports.

Turkmenistan has the world''s fourth largest known reserves of natural gas but limited export infrastructure and few reliable partners.

The main importer of Turkmen gas is China, which is committed to expanding its consumption of gas relative to carbon-intensive fossil fuels such as coal.

Crude oil has lost around 60 percent of its value since June due to oversupply, with a strong dollar and a weak global economy dampening demand.

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