Commodity turnover between Russia and Turkmenistan will not undergo significant changes after the departure of Gurbanguly Berdimuhamedov from the presidency, the interviewed experts believe. However, in the coming years, Ashgabat risks increasing its debt to Beijing - it accounts for almost 93% of trade. Nevertheless, two areas of cooperation with Russia - energy and agro-industrial complex - will help reduce Turkmenistan's dependence on China.

Ashgabat is looking for a successor

In the spring of 2022, extraordinary presidential elections will be held in Turkmenistan. Voting is set for March 12th. However, it is already known that the current head of state, Gurbanguly Berdimuhamedov, will leave his post before the expiration of his term of office.

With a high degree of probability, Gurbanguly Berdimuhamedov will be replaced by his younger son Serdar. “Serdar previously held the position of Deputy Prime Minister and was actually the second person in the country. He, most likely, will continue his father's policy and will develop the existing 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 at the DoFin.ru investment and consulting company, emphasized in an interview.

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. In this context, building up bilateral ties with Moscow would help Ashgabat. The two main areas of cooperation could be energy and agro-industry.

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Ashgabat's 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. The import of Turkmen food products will remain at a minimum, emphasized in an interview with 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 high-quality fibrous cotton and products from this raw material. Turkmenistan also supplies lightships, various polymers (plastic) and tomatoes. For Moscow, Ashgabat is a large market for trucks, primarily KAMAZ trucks.

“Ever since Soviet times, Turkmenistan has been famous for the production of cotton underwear. Apart from these products, Moscow depends little on trade with Ashgabat. From Russia to Central Asia go mainly sugar, timber, chemical fertilizers, medicines. Exports from Moscow amount to about $650 million, while Turkmen imports are half as much, about $321 million,” the expert concluded.

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Dangerous dependence on China

Doctor of Historical 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 decline. And the recently resumed export of Turkmen gas was rather a forced measure on the part of Russia.

“After Russia stopped trading gas with Turkmenistan in 2009, the trade between the two countries has seriously fallen. 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 emphasized.

It was the lack of funds that largely caused the authorities of the Central Asian country to appeal to Russia regarding the resumption of gas purchases, Kuzmina suggested. According to her, part of the proceeds went to repay Chinese loans.

“Besides Russia and Afghanistan, the Turkmens have no worthy alternatives to replace supplies to China. In this regard, Moscow is a much more profitable option, because a gas transmission network to Samara has been operating in this direction since Soviet times,” the expert noted.

At the same time, in recent years there has been a sharp increase in trade between Turkmenistan and 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 China, associated with total infrastructure financing of deposits. In 2021 alone, he paid more than $8 billion to Turkmenistan for previous debts.Back to news »

The Caspian issue

Another major energy project that Turkmenistan has been planning to implement since Soviet times is the construction of the Southern Gas Corridor, a pipeline along the bottom of the Caspian Sea. However, the project is currently on hold. The reason is Ashgabat's political and legal disagreements with Russia and Iran, which were categorically against this project, Knyazev emphasized.

“On the one hand, Turkmenistan and Azerbaijan seem to be able to start developing their offshore areas, but the most important condition is the environmental safety of the region. In this matter, Ashgabat will depend on the will of Moscow and Tehran for a long time,” the analyst noted.

At the same time, he added that certain progress has already been made in this matter. In January 2021, through the mediation of Turkey, Azerbaijan and Turkmenistan agreed on the status of the disputed Dostluk field.

“There is already the necessary infrastructure from the oil and gas field towards Azerbaijan. Turkmens must build an additional branch to Dostluk to supply additional volumes of raw materials. There, the gas already received by Baku will go through the Turkish TANAP pipeline across the Adriatic to Southern Europe. However, this project is currently in limbo,” Knyazev said.

LUKOIL has already volunteered to be 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 in the Caucasian-Turkish direction. But the volume of supplies here will also be significantly inferior to the Chinese route. In this regard, it will be difficult for Russia to push China out of the Turkmen market. Beijing is the absolute hegemon there,” Knyazev summed up.

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Agricultural revolution and the problem of external borders

In addition to the development of energy cooperation with Turkmenistan, Russia should pay attention to the large-scale reform of the agricultural sector in the country. It was aimed at increasing competitiveness in agriculture. Moscow could supply Ashgabat with agricultural machinery, harvesters and other machine-building equipment, Veretennikov stressed.

According to him, the creation of a Turkmen logistics center near the port of Olya in the Astrakhan region will also contribute to the development of trade relations between the two countries. The agreement between Moscow and Ashgabat became known in December 2021.

“From here, Turkmen goods in the shortest possible time can 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 volume of the country's foreign trade turnover with the Astrakhan Region amounted to about $200 million,” the analyst noted.

Knyazev agreed with him. However, the expert stressed that despite the agricultural reform, Ashgabat is still heavily dependent on food imports. Turkmenistan provides only 15-20% of its needs. To secure trade supplies between the countries, Moscow needs to start investing now in strengthening the external borders of Turkmenistan.

“There is a problematic Caspian, there are far from ideal borders with Kazakhstan and Afghanistan. If the border points are not secured, then not only the existing trade supply corridors will be closed, but the problem of high shadow drug trafficking will also be exacerbated. This may also threaten an increase in refugee flows and the transfer of terrorist elements to the south of Russia, ”the expert concluded.

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