IDB interested in investing in Turkmen private sector

Finance Materials 4 March 2019 18:12 (UTC +04:00)

Ashgabat, Turkmenistan, March 4

By Huseyn Hasanov – Trend:

Turkmenistan is working to intensify partnership with the Islamic Corporation for the Development of the Private Sector (ICD), which is part of the Islamic Development Bank Group (IsDB), Trend reports with reference to the Neutral Turkmenistan newspaper.

The corresponding report at the Turkmen government meeting was presented by Deputy Prime Minister Gochmyrat Myradov. He said that the ICD is interested in investing in the projects of Turkmen businessmen.

In this regard, the relevant organizational work is planned by the State Bank for Foreign Economic Affairs of Turkmenistan, the report said.

The purpose of creating ICD is to support economic development and promote the development of the private sector in member countries by providing financing and/or investments that are carried out in accordance with the principles of Sharia (Islamic law). The ICD also provides advisory services to governments and private organizations to promote the creation, expansion and modernization of private enterprises.

The share of private sector in the gross domestic product (GDP) of Turkmenistan, excluding the fuel and energy industry, is more than 60 percent. This is a result of formation of the Union of Industrialists and Entrepreneurs of Turkmenistan (UIET) in 2008, which brings together over 20,000 entrepreneurs.

There are about 600 plants in Turkmenistan, including those producing construction materials, textiles and carpets, chemicals, metal products, furniture, glassware, as well as polyethylene and plastic products that are in demand in the domestic and foreign markets.

In line with a state program of Turkmenistan, by 2020, the share of the non-state sector in the gross domestic product should reach 70 percent. Entrepreneurs are allowed to establish joint ventures with foreign partners by attracting their investments.

Turkmenistan holds one of the key positions in the region in terms of the supply of natural gas - China and Iran are importers. At the same time, Russia - the traditional buyer - stopped buying Turkmen gas in 2016. Against this background, the Turkmen entrepreneurs began to experience difficulties due to currency conversion restrictions.

Turkmenistan needs to ease foreign exchange regulations on imports and other current international payments, the International Monetary Fund (IMF) said following the visit of the IMF mission to Ashgabat during February-March 2018.

Real sector reforms should focus on significantly simplifying administrative procedures and regulations, accelerating reforms and privatization of the state-owned enterprises, and attracting foreign direct investment, according to the IMF.

Turkmenistan set a course to a gradual transition to a market economy, which is reflected in the Constitution. Presently, a relevant regulatory and legal framework is being created, while the commodity and raw materials exchange and the labor exchange are formed, and conditions are created for free wholesale trade.

The goals were set for creation of a commodity market, a stock market, a securities market, information, advisory and audit centers in the country.