Turkmenistan - World trade indicators 2009 (Vol. 1 of 2) : Trade brief

 72787 v1 World Trade Indicators 2009/10 Turkmenistan Trade Brief Trade Policy into consideration, it is apparent that Turkmen exports have good access to international markets, especially in Following its independence in 1991, Turkmenistan has comparison to its comparators. Turkmenistan’s opted for a gradual transformation from a planned to weighted average rest of the world tariff (including a market economy. Turkmenistan authorities have preferences) is 1.5 percent, lower than the regional and recently implemented several trade liberalizing income group averages of 2.1 and 2.9 percent, measures, such as reducing duty and excise taxes. respectively. Different from the majority of countries However, economic activity continues to be in the region, Turkmen agricultural products face a dominated by the public sector, and the trade system is more favorable trading environment (0.8 percent still relatively restrictive as all trade transactions have tariff) than non-agricultural products (1.5 percent to be registered with the Turkmen State Commodity tariff). An observer at the WTO, Turkmenistan signed Exchange. Nonetheless, based on its 5.1 percent a trade and investment framework agreement with the simple average of the MFN applied tariff in 2002, the United States on June 1, 2008.2 latest year for which internationally comparable tariff data is available, Turkmenistan had a regime more In January 2009, the Central Bank redenominated the open to trade than an average Europe and Central national currency, the manat, with the new manat Asia (ECA) (9.5 percent) or lower-middle-income equivalent to 5,000 old manat.3 This followed the (15.8 percent) country. Similar to the majority of depreciation of the Russian ruble against the U.S. countries in its comparator groups, Turkmenistan is dollar in the second part of 2008, which put more protective of its agricultural goods (12.8 percent Turkmenistan at a competitive disadvantage since tariff) than of its non-agricultural ones (3.9 percent Russia is its main trading partner and the weaker ruble tariff). Moreover, the 80.1 percent share of tariff lines meant that imports from Russia became cheaper while with zero MFN tariff in 2002 was by far the highest in exports to Russia became more expensive. the region, where the average was 14.7 percent. In response to the global crisis, Turkmenistan’s Behind the Border Constraints president signed a decree in October 2008 which The limited capacity of the existing natural gas allows the Ministry of Finance to establish a pipelines and lack of alternative natural gas export stabilization fund as a cushion against the impact of routes (two thirds of gas exports go to Russia’s the global slowdown.1 Gazprom) are constraining the country’s natural gas export potential and making exports vulnerable to External Environment disruptions. Despite the fact that freight forwarding, warehousing, and other logistics