1. Introduction

In 2014 Turkmenistan further enhanced its position in the regional political and economic chessboard, developing relations of cooperation with both Central Asian countries and non-regional countries, mainly interested in the Turkmen gas.

Ashgabat’s support to the realization of regional infrastructures of transport – such as the Kazakhstan-Turkmenistan-Iran railway – represents the main contribution of the Turkmen government to the development of regional trade and interconnections, also allowing Turkmenistan to play the role of Central Asian trade hub, given its strategic geographic position.

In the security field, Turkmenistan has necessarily dealt with two potential threats which could trigger a condition of instability: the impact of the Russia–Ukraine confrontation on the domestic scenario and the growing Taliban threat in the eastern region, bordering with Afghanistan.

In the energy sector, President Gurbanguly Mälikgulyýewiç Berdimuhamedow is aware of the existing unbalanced situation which could affect the national strategy of export’s diversification: on the one hand, the long-term energy partnership with China is granting Turkmenistan a huge market for its rising gas exports. However, on the other hand, this scenario prevents the achievement of a diversification strategy, hampering or delaying the concrete realization of alternative export routes.

The forthcoming creation of the Agrarian Party of Turkmenistan represents a relevant development in the domestic scenario. In fact, it must be interpreted as another relevant step undertaken by Berdimuhamedow on the long road to implement a multi-party political system.

2. Turkmenistan and Russia: an awkward issue

The effects of the Russia–Ukraine crisis and the annexation of Crimea by Russia have seriously concerned the Turkmen authorities, which are worried about the perceived Russian aggressive attitude in post-Soviet space. Moscow’s aim to protect the rights of ethnic Russians in the post Soviet space is perceived as a potential threat for Turkmenistan as well as for the other four Central Asian states, which are home to sizeable communities of Russian-speaking populations. About 4% of Turkmenistan’s population (110,000 residents) hold dual citizenship. The measures of cultural and administrative discrimination adopted in Turkmenistan against Russians could offer a pretext to Moscow for intervention, also allowing Russia to set back Turkmen’s projects of energy diversification to European markets.[1] In fact, the potential participation of Turkmenistan in the Trans Caspian energy corridor represents a serious threat for Russia’s energy strategy, boosting an alternative route of energy imports for the EU.

At the Caspian summit[2] held on 29 September 2014 at Astrakhan the five littoral countries (Turkmenistan, Russia, Iran, Kazakhstan and Azerbaijan) failed to reach an agreement on the Caspian Sea status, which brought to a halt the realization of the Trans Caspian pipeline, preventing the construction of the missing link between Turkmenistan and Azerbaijan. At the same summit, the five Caspian countries agreed to prevent any outside military presence in the region, substantially weakening all projects of security and naval cooperation which some littoral countries – Turkmenistan, Azerbaijan, Kazakhstan – seemed about to realize with either NATO or the United States.

Officially the Turkmen President welcomed this agreement, which reflects the main principles of good neighbourhood, cooperation, friendship and stability on which Turkmen foreign policy is based. However, Berdimuhamedow is also interested in hampering Russia’s attempts to create a Caspian Collective Security System (currently proposed only to Azerbaijan). Formally aimed to preserve this strategic region from outside influences, the Caspian Collective Security System would in fact bring the Caspian region inside the Russian orbit of power.[3]

Another area of friction in Turkmenistan–Russia relations is represented by Moscow’s project to involve the Central Asian countries in a security, economic and political framework of cooperation, by making use of different regional organizations. Turkmenistan refused to join the Eurasian Economic Union (EEU) as well as the Collective Security Treaty Organization (CSTO),[4] on the basis of the permanent neutrality, which continues to represent the main orientation of its national foreign policy.

According to the Turkmen Ambassador in Russia, Berdymurat Rejepov, Turkmenistan is not interested in joining the EEU, preferring to develop bilateral relations with Russia, considered as a strategic partner.[5] Ashgabat is profoundly wary of Russian integration projects, based on the geopolitical ambition to extend its influence in the region.

However, Russia disposes of some levers to pressure Turkmenistan, trying to obtain a more collaborative approach on the regional integration framework. First of all, given Moscow’s orientation to protect the Russian-speaking population in the post soviet space, Moscow could consider some of the cultural and administrative decisions adopted by the Turkmen government as discriminatory, intervening to defend the rights of the local Russian community. Moreover, the adoption of restrictions on Turkmen guest workers in Russia could be an even more effective tool: in fact their forced return to Turkmenistan would increase unemployment and decrease money remittances, triggering social instability.[6] In the economic field, Russian influence on Turkmenistan appears limited, considering that Moscow is only Ashgabat’s fourth trade partner, while China plays the lion’s share, with 43.3% of total trade.[7]

In the security field, following Nato’s disengagement from Afghanistan, Turkmenistan could need Russian support to address the growing Taliban threat on the Turkmen-Afghan border, a factor of dangerous instability which could also affect the whole regional security architecture. In 2014 there was a steady increase in fighting in the Jowzjan and Faryab provinces of Afghanistan, which border with Turkmenistan. In two different attacks in February and May 2014, six Turkmen border guards were killed along the southern border.[8] Incursions and provocations of supposed Taliban fighters as well as their clashes with Turkmenistan’s military have been reported, signalling the risk of cross-border incursions, bound to spread instability in Turkmenistan. The decision to adopt and preserve the country’s neutrality policy has led Turkmenistan to avoid, until now, cooperation with regional security organizations, such as the CSTO and the Shanghai Cooperation Organization (SCO). In September 2014, Nikolai Bordyuzha, the Secretary General of the CSTO, expressed his hope that Turkmenistan (and Uzbekistan) ‘will cooperate in terms of overall efforts to ensure stability in the region’, in order to contain ‘undesirable tendencies’ in Central Asia such as the intensification of cross-bordering incursions and extremist activities.[9]

3. A regional-oriented foreign policy

The visit of Turkish President Recep Tayyip Erdogan in Turkmenistan – his first visit to Central Asia after becoming President in 2014 – clearly highlights the strategic relevance of the Turkmenistan–Turkey cooperation in the economic and security field. An integral part of Ashgabat–Ankara cooperation is also the containment of Russia’s ambitions. Turkey is the second trade partner for Turkmenistan, with 600 Turkish firms and companies which currently operate in Turkmenistan. The bilateral trade turnover of this successful partnership amounted to US$ 4,75 billion in 2013, going over US $ 5 billion in 2014.[10] In addition to the agreement on energy cooperation, allowing Ashgabat to supply the TANAP gas pipeline project,[11] the two sides agreed to increase military cooperation. President Berdimuhamedow stressed the need to obtain modern military equipment and to improve training in order to address the dangerous challenges to national security and stability, represented by Taliban’s incursion across the Turkmen–Afghan border.[12]

Another increasingly influential Turkmen partner – and not only in the energy sector – is China. Following a visit from President Berdimuhamedow to Beijing in May 2014, Turkmenistan and China established a strategic partnership, by signing several memoranda of understanding aimed at increasing cooperation in the fields of infrastructure, telecommunications, agriculture, health care and technology.[13]

Ashgabat is also promoting the realization of two strategic infrastructures, aimed at promoting cooperation and improving trade integration of the regional non-Russian states. The aim is to allow Turkmenistan to play a significant role in the future regional security architecture.

The Iran–Turkmenistan–Kazakhstan railroad and the Turkmenistan–Afghanistan–Tajikistan rail line will make Turkmenistan a regional hub, in a promising trade network connecting Central Asia, the Caspian Sea and the Persian Gulf. This same network would open alternative export routes for the Central Asian landlocked economies.[14] In April 2014, Turkmenistan’s president visited Tajikistan to discuss the railroad project. In doing this, Berdimuhamedow was trying to remedy Ashgabat’s exclusion from the Dushanbe and Kabul agreement – which had been announced in January 2014 – concerning the realization of the Tajik section of the railway.[15] Although excluded by the definition of the railroad, which had been done by Tajikistan and Afghanistan without consulting Turkmenistan, Berdimuhamedow promised to finance the Turkmen section of the railroad, also realizing a link to the northern Afghan town of Andkhoy. The project should be operational in 2015. However, even if Turkmenistan realizes its part, the uncertain definition of the Tajik part of the railroad and insufficient financial investments[16] may postpone its realization.[17]

On December 3 2014, the Turkmen President together with Kazakh President Nursultan Äbishuly Nazarbayev and Iranian President Hassan Rouhani participated at the inaugural ceremony of the new railroad linking Turkmenistan with Kazakhstan and Iran. The railway – whose construction began in 2009 – has a total length of 925 kilometres. Of which, 85 kilometres are in Iran, 700 in Turkmenistan and the remaining 140 in Kazakhstan.[18] This infrastructure – which is a part of the North-South international transport corridor – will allow Turkmenistan both to enhance trade, political and energy cooperation with two powerful neighbours such as Kazakhstan and Iran, and to reach new profitable markets for its cotton exports.

4. Between growing dependence on gas exports to China and the need to diversify export routes

In the last five years, the availability of huge gas reserves and the strategic geographic position between West and East markets have allowed Turkmenistan to successfully develop a multi-vector energy strategy. That aim is gas export diversification, attracting foreign investments, technologies and know-how in order to realize the necessary infrastructures to develop gas fields and to increase national production. The launch of the Sino-Turkmen gas pipeline (China-Central Asia Gas Pipeline, CAGP) in 2009 has represented the main achievement of this strategy, ending the Russian monopoly on Turkmen gas exports.[19] Turkmenistan continues to hold the fourth largest natural gas reserves in the world, after Russia, Iran and Qatar. However, since 2012 the British Petroleum Statistical Review reduced its estimates on Turkmen gas reserves from 24 trillion cubic metres (tcm) (2011) to 17.5 tcm (2012).[20] In spite of this revision, the Turkmen government has expressed great expectations on the development of Galkynysh field, which British Auditor Gaffney, Cline & Associates ranked as the world’s second largest (after North Dome, located in Qatar) with gas reserves of between 13.1 and 21.2 tcm.[21] According to Turkmen authorities, following the exploitation of Galkynysh field, Ashgabat will produce 250 billion cubic metres (bcm) of gas per year by 2030 and export 200 bcm per year.[22] This means that, in the next 15 years, Turkmenistan national gas production should more than triple, because it is currently equal to 62.3 bcm per year.[23]

In January 2014, Turkmenistan’s President Berdimuhamedow announced that his government – in order to achieve this goal – would intensify its efforts to raise foreign investment in the energy sector.[24] However, the unaltered position of the Turkmen government – which refuses the involvement of major international companies in Production Sharing Agreements (PSA) to develop onshore gas fields – has hindered all attempts to attract financial investment and know how. At present, the China National Petroleum Corporation (CNPC) is the only foreign company to detain a Production Sharing Contract on onshore gas field (Bagtyarlyk) but several international companies – such as Chevron, ExxonMobil, Total, Eni, Malaysia’s Petronas, Gazprom, British Petroleum, Germany’s RWE – have showed interest in investing in the Turkmen energy sector, driven by geopolitical and economic aims. [25]

In 2014 some factors of vulnerability in the Turkmen energy strategy emerged, particularly the growing dependence on gas exports to China. At present Ashgabat’s gas exports are delivered to three markets: China, Russia and Iran. Beijing is the main energy partner for Ashgabat. In 2013 China imported 24.4 bcm of gas (half of Chinese gas imports) from Turkmenistan.[26] In May 2014, the Iranian Ministry of Energy announced the decision (reversed six months after) to stop Turkmen gas imports – in order to develop national production – while in September Gazprom announced it was no longer interested in purchasing Central Asian gas. Turkmen gas exports to Russia fell from 50 bcm in 2009 to 9.9 bcm in 2013.[27]

This situation clearly highlights Turkmenistan’s strategic need to open new energy corridors to achieve its diversification’s policy of energy export routes, balancing the predominant role now conquered by China.[28] Ashgabat and Beijing have also enhanced energy cooperation aimed to realize infrastructures and to exploit new fields in Turkmenistan. On 7 May 2014 president Berdimuhamedow attended the opening ceremony at the gas processing plant at the Bagtyarlyk field, located in the Lebap eastern region (near the Uzbek border), with a capacity of 9 bcm of gas per year. This plant was built by the CNPC, which invested US$ 4 billion for the development of this promising field with reserves estimated at tcm 1.3. Bagtyarlyk is the main source of gas which currently feeds CAGP: Turkmen gas exports to China are projected to reach 40 bcm by 2016, while the peak of 65 bcm of gas per year will be achieved in 2020, after the development of Galkynysh field and the realization of line D of CAGP.[29] During the visit of Xi Jinping in Turkmenistan in September 2013, Turkmenistan and China’s presidents announced the completion of the first phase of construction of the Galkynysh gas field and launched the construction of the second phase, while planning the realization of new additional gas pipeline (line D) to increase the transport capacity of the China-Central Asia gas pipeline network.[30]

5. Eastern and western energy export routes: progresses and delays

In this scenario, the slow implementation of some alternative pipeline projects – notably the Turkmenistan–Afghanistan–Pakistan–India (TAPI) gas pipeline and the Trans Caspian corridor – is hampering Ashgabat’s plans of export diversification.

The TAPI pipeline has been envisaged as the eastern corridor of exports, through which Turkmenistan will supply the lucrative South Asian markets of India and Pakistan, crossing Afghanistan. TAPI should deliver 33 bcm of Turkmen gas by 2017–2018. Originally the natural gas field of Dauletabad was indicated as the main source of supply for this project, but the stagnant/declining production of this mature gas field will make it necessary to commit Galkynysh production also.[31] The implementation of this pipeline may have a strategic relevance for Ashgabat because it will offer an additional export option, bypassing at the same time China and Russia and concretely realizing a diversification of export routes. On 29 October 2014, at the meeting of the Council of Elders, Berdimuhamedow affirmed that TAPI’s construction is planned to start in 2015.[32]

In November 2014, the four state gas companies of Turkmenistan, Afghanistan, Pakistan, and India[33] established a company that will build, own and operate the planned TAPI Pipeline.[34]

In spite of much progress, there are serious security, economic and geopolitical concerns which affect the TAPI project, hindering its realization.

Afghanistan’s permanent condition of instability severely weakens the possibility to realize this energy route, considering that the planned TAPI route is supposed to cross Southern-Western Afghanistan (Herat, Helmand, Kandahar) as well as Pakistani Baluchistan. Given the unsettled situation of these areas, the TAPI security and its possibility to regularly supply energy remain an open question. If instability in the Afghanistan and Pakistan region has always been one of the main weakness of the TAPI project, the rising tensions along the Turkmen-Afghan border contributes to increase the uncertainty about TAPI implementation. In 2014, frequent incursions and clashes provoked by supposed Taliban fighters have caused Turkmen armed forces to intervene; but the security scenario will clearly worsen after the complete withdrawal of NATO forces from Afghanistan.[35]

In November 2013, in an attempt to speed up the implementation of the project and to assure its economic feasibility, the ADB was appointed in the role of transaction advisor for the TAPI gas pipeline project, with the task of helping the TAPI members to find the necessary financial support.[36] This is a task of crucial importance, as the estimated cost of the project has increased from the US$ 7.6 billion originally estimated by Penspen in 2008 to around US$ 9–12 billion.[37]However, as noted above, Turkmenistan’s persistent refusal to allow major international companies to develop the onshore gas fields, supposed to feed the TAPI pipeline, remains a major hurdle for the realization of the project.

The Trans Caspian pipeline (TCP) project appears to have been revitalized in 2014, following the cautious rapprochement between Turkmenistan and Azerbaijan. The two countries have discussed the prospect of energy cooperation, which, since 1991 has been made difficult by Ashgabat and Baku both claiming the ownership of Kyapaz/Serdar offshore oilfield in the Caspian Sea.

Rovnag Abdullayev, head of Azerbaijan state oil company SOCAR, and Berdimuhamedow, met twice in 2014, discussing the implementation of a joint project and the possibility of building a trans-Caspian gas pipeline. During the international oil and gas exhibition, which was held in Ashgabat in November 2014, Abdullayev said that Baku ‘is ready to provide necessary infrastructure, a diversified system of oil and gas pipelines and other opportunities for implementation of projects in the oil and gas sector of Turkmenistan’.[38]

Furthermore, Turkmenistan has also enhanced its energy cooperation with Turkey, which will play the role of hub in the TCP project, delivering Azerbaijani – and potentially Turkmen gas – to EU markets. As a matter of fact, Turkmenistan and Turkey have further proceeded in implementing their 2013 agreement – according to which Turkmen gas will be delivered to Turkey – signing a framework agreement to deliver Turkmen gas to TANAP.[39]

Nevertheless, the unsolved legal status of the Caspian Sea obstructs the possibility to deliver Turkmen gas to Azerbaijan and then to Turkey through the TANAP pipeline. Turkmenistan and Azerbaijan share a common position concerning the possibility of building an underwater Caspian pipeline with the consensus of the nations directly involved. However, Russia and Iran oppose this solution, privileging consensus among all five littoral states (Turkmenistan, Russia, Azerbaijan, Kazakhstan, Iran) and also threatening to use their right to veto to prevent all Caspian pipeline energy projects. During the fourth Caspian summit held in Astrakhan in September 2014, the five littoral countries failed to achieve a final division on the Caspian’s offshore waters and seabed, postponing once again the solution to the next summit in 2016.[40]

On the Turkmen side, one of the big problems to solve is that the East–West pipeline – designed to supply the TCP or generally the western corridor – is still unfinished. This pipeline should deliver 30 bmc of gas per year from the Shatlyk gas field in the South-east of the country to the Caspian coast, reaching a total capacity of 40 bmc, thanks to additional gas extracted from Caspian deposits. No foreign companies or firms are involved in its realization, which has an estimated cost of US$ 2 billion.[41]

6. Economic successes and constitutional changes

In the domestic scenario, Berdimuhamedow has undertaken a gradual process of democratization and reforms, aimed at creating a multi-party political system. As a matter of fact, the Agrarian Party of Turkmenistan, the latest to be created among the Turkmen parties, will be the third in the country, together with the existent Democratic Party and the Party of Industrialists and Entrepreneurs. The last one was founded in 2012, after a 21-year period of a one-party system.

The Agrarian Party organizing committee decided to hold the founding congress on 28 September 2014 and apply for registration to the Ministry of Justice, in accordance with national legislation.[42]

In the economic sphere, the Turkmen government has showed its clear will to further implement a diversification policy, in order to lessen the dependence on revenues deriving from the hydrocarbon exports. The development of the agricultural sector – through the modernization of agriculture industry infrastructures and the adoption of modern technologies – will increase the production of cotton, wheat, rice and other products which will be delivered to meet both internal needs and external demand.[43]

This decision also reflects the will of the Turkmen government to further implement the policy of economic diversification, in order to lessen their dependence on revenues linked to hydrocarbon exports: the development of the agricultural sector – through the modernization of agriculture industry infrastructures and the adoption of modern technologies – will increase the production of cotton, wheat, rice and other products which will be delivered to meet both internal needs and external demand.[44]

Turkmenistan is benefiting from the robust growth of its economy, mainly supported by gas exports to China and high public investments. In the period January–September 2014, Turkmenistan’s GDP grew by 10.3%. According to the recent Euromonitor International analytical report, in 2014 Turkmenistan was the leader in the list of the top 5 countries in the world for fastest growth in annual disposable income.[45] This economic success reinforces Turkmenistan’s role in the regional scenario, where Kazakhstan holds the fourth place. Since early 2014 the country’s foreign trade turnover has exceeded $21 billion, which shows their success in the development of non-hydrocarbons sectors, such as textiles, food industries, production of construction materials, chemicals, agriculture.[46]

Berdimuhamedow has also proposed to carry out constitutional reform, which reflects the political evolution and socio-political transformations that occurred in the country, mainly following the development of market economic relations and private entrepreneurship. In May 2014, the Turkmen President signed a decree ‘On establishment of the Constitutional Commission and its composition for improvement of the Constitution’. Two months later, during the first session of this Commission (on 6 August 2014), Berdimuhamedow reaffirmed his political will to amend the current Constitution. These changes will be in continuity with the Constitutional amendments adopted in 2008, which abolished the Khalk Maslahaty (people’s council) legislative body, transferring its powers to the president and the Mejlis (parliament).[47]

Nel corso del 2014, il Turkmenistan ha visto rafforzarsi le minacce alla stabilità e alla sicurezza nazionale, legate alle incursioni armate dei talibani lungo il confine afgano-turkmeno, situazione che è destinata ad aggravarsi dopo il ritiro delle truppe NATO dalla regione. Inoltre, le tensioni russo-ucraine e l’annessione della Crimea alla Russia hanno aumentato i timori del governo di Ashgabat sulle ambizioni russe nello spazio post-sovietico.

In ambito energetico, il Turkmenistan – che possiede le quarte maggiori riserve di gas al mondo – ha ulteriormente approfondito la cooperazione con la Cina, nazione verso la quale viene convogliato oltre il 50% delle esportazioni di gas turkmeno: tuttavia, il sostanziale stallo che accomuna gli altri progetti di gasdotti (Turkmenistan-Afghanistan-Pakistan-India e il corridoio transcaspico) impediscono al governo di Ashgabat di realizzare compiutamente la strategia di diversificazione delle rotte energetiche d’esportazione.

Grazie alla centralità della propria posizione geografica, il Turkmenistan rappresenta un perno determinante per la realizzazione dei progetti di infrastrutture regionali di trasporto, legittimandosi nel ruolo di «hub» ferroviario, stradale e commerciale.