Turkmenistan leader frets over foreign debt

ASHGABAT, Turkmenistan — Turkmenistan’s strongman leader has warned that the gas-rich country may struggle to pay its foreign debts unless creditors give it more time, a rare admission of economic problems in the isolated state.

President Gurbanguly Berdymukhamedov told ministers to “prepare appropriate proposals” for creditors regarding “repayment periods” as soon as possible, state newspaper Neutral Turkmenistan reported on Friday.

The president said $145 million of more than $600 million owed in foreign credit for agricultural development were due to be repaid over the course of this year.

He specifically ordered the government to “conduct negotiations” to restructure debt owed by state chemical company Turkmenhimiya.

“When attracting new foreign investment, as far as possible, it is necessary to achieve a low interest rate and favourable conditions for our country,” Neutral Turkmenistan’s report quoted him as saying.

Berdymukhamedov, 63, also said the country “can in no way be satisfied” with the growth of the economy, which he claimed stood at 5.9 per cent for 2020 and the first two months of this year.

Economic slowdowns in key partner states were partly to blame, he said.

Observers have long cast doubt over Turkmenistan’s economic reporting, with official annual growth averaging above 6 per cent for the last five years despite a sharp downturn in prices for hydrocarbons, which dominate exports.

Turkmenistan has no free media and tends not to relay bad news, with the country of around six million people famous for its claim to zero coronavirus cases. 

According to Turkmenistan’s foreign trade bank, 39 per cent of foreign credits for investment was owed to Japan and 25 per cent to China in 2020. 

The bank did not provide figures for the sums owed.