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AVAZA, Turkmenistan: Foreigners in Turkmenistan find no cash machines to withdraw money and cannot roam with their mobile phones while much basic economic data, such as the unemployment rate, remains a state secret.
Yet still the isolated but energy-rich ex-Soviet state is courting foreign investment and finds no shortage of interest in its vast natural resources.
There has been a lot of progress but Turkmenistan does not “have a full appreciation for the magnitude of the opportunity and the challenge that goes with it,” said Douglas Uchikura, the head of Chevron's operations in Turkmenistan.
“There's now a window of opportunity to accelerate a focus from recognising the potential to realising that potential,” he told a gas industry conference in the Turkmen resort Avaza on the Caspian Sea.
“The desired production growth will require a huge amount of capital investments,” he said, warning that for Turkmenistan to become a key supplier, it has to be able to compete in an already competitive gas market.
As a sign of Western interest in Turkmenistan, US giant General Electric opened an office in the Turkmen capital Ashgabat this month.
Michael-Dieter Ulbrich of Austrian oil firm OMV said: “The window of opportunity for TurkmenGas has never been more open than now but we need commitments.”
Some basic services are lacking. Internet access is notoriously expensive, nearly $7,000 per month for the fastest broadband connection.
Meanwhile, the authorities suspended Russian mobile operator MTS in December, leaving state-owned TM Cell as the sole mobile service provider in the country.
But any foreign visitor arriving in Turkmenistan finds their cell phones do not work when they land in Ashgabat — TM Cell does not offer roaming.
Turkmenistan sits on top of the second largest gas field in the world — South-Iolotan Osman — and needs investors to help increase its exports.
The desert nation bordering Afghanistan and Iran, plans to triple gas production to 230 billion cubic metres in the next two decades. It predicts a more than six-fold increase in oil output, to 67 million tonnes per year.
“Our country could become one of the biggest gas suppliers in the world,” said Amanaly Khanalyev, chairman of the national gas company TurkmenGas.
Yagshigeldy Kakaev, chairman of the state agency for management and use of hydrocarbon resources added: “By 2030, world demand for gas will double and it will demand more extra resources.”
There are political problems too. Along with an abysmal record spotlighted by international human rights groups, Turkmenistan ranks 197 out of 210 countries in the World Bank's Government Effectiveness Index.
Turkmenistan was also ranked 172 out of 178 countries in Transparency International's 2010 Corruption Perceptions Index. It is absent from the World Bank's Doing Business global survey.
Under President Gurbanguly Berdymukhammedov, who replaced the eccentric ruler Saparmurat Niyazov after his death in 2006, Turkmenistan has begun gradually opening up to the rest of the world but with mixed results.
Following a 2008 reform, the national money, the manat, is now tied to the US dollar and the currency black market has virtually disappeared. The economy remains almost entirely cash-based, however.
The state sector continues to dominate and various estimates show it amounts to between 75 to 90 per cent of the economy.
Berdymukhammedov made several references in the past to the potential of forming new political parties but no actual changes have taken place, international human rights organisations say.
In 2010, Turkmenistan opened a second pipeline to neighbouring Iran.
Ashgabat is negotiating with Afghanistan, Pakistan and India on the new TAPI pipeline while Brussels wants Turkmenistan to commit gas for its Nabucco project.
Following a 2009 spat with Russia, whose influence in Turkmenistan has fallen in recent years, China became its leading export market following the completion of a pipeline that is slated to reach full capacity by 2012.
