Economic development of Turkmenistan in the first period of independence (1992-1998)

In recent years, Turkmenistan has become one of the most dynamic post-Soviet countries. Huge reserves of hydrocarbons, especially natural gas, attracted the attention of many countries and transnational corporations. According to the European Bank for Reconstruction and Development data, Turkmenistan's GDP growth was 14.7% in 2011 and 11.1% in 2012, this puts the Republic in line with economic growth leaders such as China, India and the Gulf countries. However, the situation in the economy of Turkmenistan has not always been so positive. In the first years of independence, the country was in a deep crisis. By 1998, Turkmenistan's GDP fell by almost twofold compared to the level in 1991, the country faced a food crisis, inflation, the level of the population reduced drastically, many businesses closed. Among the main reasons that contributed to the deepening of the economic crisis in Turkmenistan after the collapse of the Soviet Union are the following. First, it is the original imbalances in the national economy. Non-diversified industry (oil and gas) and agriculture (cotton) prevented from a smooth transition to the market. Second, it is the underdeveloped consumer sector of the economy, the country's dependence on imports of food and consumer goods. This created problems with the provision for the basic needs of the population. Third, the lack of investment, professionals and modern technology prevented from implementation of new projects in the oil and gas and other industries. Fourth, it is the peculiarities of the political regime in Turkmenistan. The one-person character of governance and the concentration of all power levers in the hands of President Niyazov did not help economic flexibility and timely reforms. Attempts at times to "preserve" the situation only aggravated it and led to tragic consequences. Fifth, it is the lack of consistency in making transformations and decision making. The declared full-scale privatization was quickly phased out, the changes in agriculture that began were stopped later, and the conditions for the participation of foreign investors in the country's economy was constantly changing. Sixth, it is large-scale corruption at all levels from the head of a peasant association to top officials. No project could be implemented without an informal agreement with the authorities. All these factors contributed to the deepening of the economic crisis in 1992-1998.

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