HISTORICALLY, TURKMENISTAN HAS SIGNIFICANTLY RELIED ON ITS NATURAL GAS RESERVES FOR ECONOMIC STABILITY. WHAT STEPS IS THE MINISTRY TAKING TO DIVERSIFY THE COUNTRY'S ECONOMY?

 

One of the most important goals of Turkmenistan's economic policy is to create an industrial society, which includes diversifying the country's economy. In this context, the national economy is undergoing a fundamental transformation from a raw material-based model to one centered on industrial and innovative development.

 

This involves the introduction of high-tech industries, transitioning to a digital economy, and establishing modern enterprises focused on producing high value-added goods. In sectors such as oil and gas processing, gas chemistry, chemical production, energy, textiles, agribusiness, and building materials manufacturing, capacities and production rates are increasing year by year.

 

I would also like to note that the structural transformations in the economy are aimed at the accelerated growth of manufacturing industries, based on local raw materials, to produce finished products that are in demand on the global market. Within the industrial sector, the most competitive industries are those related to the fuel and energy complex, which continues to maintain strong positions in export potential. Importantly, the structure of exports is gradually shifting towards industries that process hydrocarbons and agricultural raw materials.

 

A significant emphasis is also placed on implementing measures to improve the investment and business climate, create a competitive market environment, and promote private entrepreneurship. The share of the non-state sector (excluding the oil and gas sector) in GDP is growing annually and reached 71.3% by the end of last year. Accordingly, the volume of products manufactured in non-hydrocarbon industries is increasing, and the production of services is also growing.

 

 

WHAT STEPS IS YOUR MINISTRY TAKING TO IMPROVE THE INVESTMENT CLIMATE IN TURKMENISTAN, AND HOW ARE THESE EFFORTS AIMED AT MAKING THE COUNTRY MORE ATTRACTIVE TO INVESTORS?

 

To attract investments, Turkmenistan has several advantages. First and foremost, there is stable and sustainable economic development, rich natural resources, a low level of external debt, and a developed infrastructure. The existing fiscal regime contributes positively to the dynamic growth of investment activities. The tax burden is stable and very low. For example, the income tax rate for small and medium-sized businesses is only 2%. Additionally, according to the tax legislation, the country has six main types of taxes (on profits, value-added, property, the use of subsoil, personal income, and excise taxes), with rates that are lower than in the whole Central Asian region and have remained unchanged since 2004. The tax system provides significant benefits for priority sectors of economic development. For instance, agricultural production is practically exempt from taxes.

 

It is also important to note the presence of modern transportation and logistics infrastructure, which has turned Turkmenistan into one of the key transportation hubs on the East-West and North-South corridors. The country has a well-developed network of highways, air routes, including several international airports, as well as railway routes. In the city of Turkmenbashi, on the shores of the Caspian Sea, an International Seaport with advanced infrastructure and logistics is actively operating.

 

The most promising sectors for investment are production and transportation. In the production sector, we are particularly interested in investments in gas and oil refining, and the chemical industry. To implement projects in these sectors, the Law of Turkmenistan "On Hydrocarbon Resources" is applied, providing corresponding tax benefits, incentives in accordance with the agreements concluded, and other preferences.

 

Moreover, the country has adopted the Law of Turkmenistan "On Free Economic Zones," the development of which is currently actively ongoing. These zones offer the most favorable conditions for investments. Turkmenistan is an observer to the World Trade Organization (WTO) and, since 2022, has held the status of a country acceding to the WTO. In this regard, efforts are underway to improve the regulatory framework, with a focus on WTO legislation.