What can Russia gain after the change of power in Turkmenistan
Ashgabat is looking for a successor
In the spring of 2022, extraordinary presidential elections will be held in Turkmenistan. Voting for March 12th. However, it is already known that the current head of state, Gurbanguly Berdimuhamedov, will leave his post before the end of his term.
With a high degree of probability, Gurbanguly Berdimuhamedov will be replaced by his younger son Serdar. “Serdar previously held the position of Vice Prime Minister and subsequently was the owner in the country. He, most likely, discovers his father and will develop foreign economic relations.
He studied at the Diplomatic Academy of the Ministry of Foreign Affairs of the Russian Federation, worked as an adviser to the Permanent Mission of Turkmenistan to the UN, has international political experience and connections in Moscow,” Igor Veretennikov, an expert from the DoFin.ru investment and consulting company, was invited in an interview with Gazeta.Ru.
One of the main tasks of the new president of Turkmenistan should be the diversification of foreign trade, where in recent years an acute dependence on China has formed. As a result, building up external ties with Moscow would help Ashgabat. The two main areas of cooperation are energy and agro-industry.
Ashgabat trade with Moscow
If Serdar Berdimuhamedov comes to power in Turkmenistan, the Central Asian country’s trade with Russia is unlikely to undergo significant structural changes. Imports of Turkmen food products belonging to the minimum values, narrowly focused in an interview with Gazeta.Ru, the head of the sector of the Center for Post-Soviet Studies of the Research Institute of IMEMO RAS named after. Primakova Elena Kuzmina.
According to her, Russia is mainly interested in obtaining fibrous cotton and products from this raw material. Turkmenistan also supplies lightships, various polymers (plastic) and tomatoes. For Moscow, Ashgabat is a free market for trucks, primarily KAMAZ trucks.
“Turkmenistan has been famous for the production of cotton underwear since Soviet times. Apart from these products, Moscow depends little on trade with Ashgabat. From Russia to Central Asia go mainly sugar, timber, chemicals, medicines. Export from Moscow is about $650 million, while Turkmen imports are half as much – about $321 million,” the expert reminds.
Dangerous dependence on China
Doctor of Medical Sciences Alexander Knyazev noted that after the discovery by Rospotrebnadzor of the brown wrinkle virus in Turkmen tomatoes in March 2021, food trade between the two countries may be reduced. The recently returned export of Turkmen gas was rather a forced measure on the part of Russia.
“After Russia traded gas extensively with Turkmenistan in 2009, the trade between the two countries has seriously taken off. However, two years ago, at the request of Ashgabat, Gazprom resumed fuel purchases, but this is less than 2% of Turkmenistan’s trade. In addition, after buying gas, Russia immediately resells it to Uzbekistan. China accounts for about 93% of exports,” the analyst said.
It was the lack of funds in many that began to use the medical institutions of the Central Asian country of Russia to the possibility of providing gas purchases, Kuzmina suggested. According to her, part of the proceeds came from the refusal of Chinese loans.
“Apart from Russia and Afghanistan, there is no suitable alternative in Turkmenistan to replace the proposal in China. On this plane, Moscow is a much more profitable acquisition, because it is associated with a change in the temporary security of Soviet vehicles to Samara, ”the expert noted.
At the same time, in recent years, there has been a sharp increase in turnover in Turkmenistan with the Republic of Tatarstan. Kazan enterprises have significantly increased the supply of machine-building equipment related to oil and gas production. In turn, Chelyabinsk pipe-rolling plants send equipment for gas pipelines to Ashgabat.
Knyazev noted that the Central Asian country needs to get rid of credit dependence on the PRC, associated with total infrastructure financing of deposits. In 2021 alone, he gave over $8 billion to Turkmenistan for debts.
Caspian question
Another energy project that is still being implemented with the Soviet temporary tax in Turkmenistan is the construction of the Southern Gas Corridor, a pipeline under the Caspian Sea. However, the project is currently on hold. The reason is the political and legal disagreements between Ashgabat and Russia and Iran, which were categorically against this project, chosen by Knyazev.
“On the one hand, in Turkmenistan and Azerbaijan, it seems that it is possible to start developing on their sections of the shelf, but the most important condition is the environmental safety of the region. In this matter, Ashgabat will wait for a long time from the will of Moscow and Tehran,” the analyst noted.
At the same time, he added that accusations of progress in this matter have already been outlined. In January 2021, through the mediation of Turkey, Azerbaijan and Turkmenistan agreed on the status of the disputed Dostluk field.
“The discovered field already has the necessary infrastructure in the direction of Azerbaijan. Turkmens should add an additional branch to Dostluk to increase the volume of raw materials. Baku has already received gas there, which goes through the Turkish TANAP pipeline across the Adriatic to Southern Europe. However, this project is currently in limbo,” Knyazev said.
LUKOIL has already become the operator of the Turkmen-Azerbaijani project for the development of Caspian hydrocarbons. Additional Russian investments could help Ashgabat implement this project without significant damage to its budget.
“Quite recently, Turkmenistan agreed on swap gas supplies to Iran with a Caucasian-Turkish annex. The volume of offers here is also significantly inferior to the Chinese route. On this plane, it will be difficult for Russia to push China out of the Turkmen market. Beijing is the absolute hegemon there,” Knyazev summed up.
Agro-revolution and the problem of external borders
In addition to the development of energy cooperation with Turkmenistan in Russia, it is worth paying attention to the large-scale reform of the agricultural sector in the country. It was aimed at increasing agricultural productivity. Moscow could supply Ashgabat with agricultural machinery, harvesters and other machine-building equipment, narrow Veretennikov.
According to him, the development of trade relations between the two countries also contributes to the creation of a Turkmen logistics center near the port of Olya in the Astrakhan region. The agreement between Moscow and Ashgabat became known in December 2021.
“From here, Turkmen goods are highly likely to get to the regions of Russia, as well as to the markets of European countries. According to the results of nine months of 2021, the country’s foreign trade turnover with the Astrakhan region is about $200 million,” the analyst noted.
Knyazev moved with him. However, the expert stressed that, despite the agricultural reform, Ashgabat is still heavily dependent on food imports. Turkmenistan requires only 15-20%. For special cases of security between the countries of Moscow, it is necessary to start investing in the external borders of Turkmenistan now.
“There is a problematic Caspian, there is a far from ideal border with Kazakhstan and Afghanistan. If border releases are not secured, then not only will the risk threshold be exceeded, but the problem of a high level of drug trafficking will be exacerbated. This can lead to an increase in the flow and the transfer of elements to the south of Russia, ”the expert believes.