Anis H. Bajrektarevic is a Professor and a Chairperson for International Law and Global

ECONOMIC POTENTIAL AND CHALLENgES
Especially in the first years after the collapse of
the Soviet Union, the Turkmen society suffered
extreme poverty. The economy slowly recov-
ered, but in 1996, a total collapse slowed eco-
nomic development. Structural reforms in the
economic environment remain very low and
many areas are still under strict control of the
state. Privatization only took place with small
unprofitable entities. Oil, gas, and cotton are
the most important trade products, which ac-
count for approximately 80% of total exports,
but also agriculture outputs like grain crops,
rice, and vegetable become increasingly essen-
tial. However, the society has only a low domes-
tic purchasing power. Similar to the Soviet
planned economy, Turkmenistan’s economy is
considered in long-term programs. The coun-
try’s economy remains underdeveloped. The
country has little interaction with global mar-
kets.
Economic corruption is often a driver in the lack
of foreign direct investment in the country.
Even with Turkmenistan’s status of the world’s
fifth largest gas producer, it has been unable to
take advantage of its rich resources. As of No-
vember 2014, Turkmenistan produces roughly
70 billion cubic meters of natural gas each year
and to break this monopoly has begun to ex-
port gas to Iran and China. The closed-out na-
ture and the neutrality stance of the
government (derived from the non-aligned
movement which Turkmenistan considers itself
still a part of ) does negatively affect the coun-
try. 
The lack of governmental and political trans-
parency also deters investors because of the
risk associated with misinformation and se-
crecy. Turkmenistan’s restrictive freedom of
movement policy is also worrisome as the
country is strict on who it lets in and out. 
The freedom of movement of its people is also
worrisome as Turkmenistan will be unable to
develop its networks and its human capital—
according to economics one of the most impor-
tant elements of developing an economy—to
further develop and diversify its narrow-based
economy.