If the flow of gas from Turkmenistan to Ukraine is to resume, the decisive factors will be political not economic, and they will be decided in Moscow, not Kiev or Ashgabat.
And so Ukrainian President Viktor Yanukovych’s visit to Moscow this week will be watched with interest for developments over energy cooperation.
Yanukovych set an apparently combative tone Friday when he told reporters that Kiev would not “sacrifice it’s sovereignty” while negotiating on the price paid for Russian gas.
Ukraine is currently bound by a 10-year take-or-pay deal with Russia’s Gazprom that leaves it open to punishing claims if it fails to buy less than given quantities of gas over a particular year.
A perceived shortfall in gas imports from Russia last year last month prompted Gazprom to claim $7 billion from state-run Naftogaz Ukrainy. The sum is clearly purposeful in its unrealism.
 Ukraine currently pays around $430 per 1,000 cubic meters for Russian gas.
“It’s clear that we have to make concessions and find a price that Russia will accept to change the contract,” Yanukovych said Friday.
Indulging in some creative thinking, Ukraine now speaks of developing its substantial reserves of shale gas and, on Friday, of bypassing Bosphorous routes for liquified natural gas imports.
“We see there is such an opportunity, the building of a gas terminal in the Mediterranean in front of the Bosporus, so that it does not go through the Bosporus, and build a terminal there,” Yanukovych said. “If we are able to do this — we are now working on this — we will have another opportunity to transport up to 10 billion, 7 to 10 billion cubic meters from these liquefied gas terminals,” he said.
Bringing cheaper Central Asian gas into the mix is evidently what Ukraine sees as another route out of the impasse.
What is abundantly clear is that this is most likely to happen if Kiev relinquishes control over its domestic natural pipeline network. Such a scenario was firmly resisted in the past, but has now evolved into a certainty that explains Yanukovych’s need to protest that he will protect his country’s sovereignty.
The proposal in the air is that a consortium involving Gazprom would operate the pipelines, finally giving Moscow the control over transit that is has so long sought. Yanukovych plaintively stated Friday that Kiev would seek assurances that it would still be able to make the call on what gas could transit to Europe.
“We want for the Ukrainian (gas transportation system) to work reliably, for it to be able to pump certain amounts of gas to Europe — the more, the better. And we want it to be technically modernised,” he said.
And, going by what Ukrainian officials said last month during Yanukovych’s visit to Ashgabat, some of that gas should be Turkmen and sold onward to Western Europe for Kiev’s profit.
Yanukovych is now also talking about “de-monopolising” the gas market, which sounds a signal for allowing in Russian and other investors. He has also made more positive noises about the Moscow-dominated Customs Union, tentatively committing his nation’s fate eastward.
The European Union, meanwhile, looks on with a degree of trepidation. Interfax cited the EU envoy to Ukraine, Jan Tombinski, as saying Friday that one option was was a three-way EU-Russian-Ukrainian consortium running the pipelines.
Whatever the outcome, the Ukrainian pipeline taboo is now broken, and that could set the stage for Turkmenistan’s long-held ambition to see its gas delivered to European households.
The finer details of the arrangement — which will be mired in the standard opaqueness and doubtless subject to all manner of financial chicanery — are yet to be decided.


For all its fabulous wealth, Turkmenistan has stooped once more to asking the Chinese for a staggering $4.1 billion loan to develop the huge and untapped South Yolotan field. Not wanting for a brass neck, President Gurbanguli Berdymukhamedov ordered his cowering minions to begin negotiations with the China State Development Bank for a loan on preferential terms.

The debt will pile on top of the $4 billion, of which $3 billion is also for developing South Yolotan, China has lent Turkmenistan last year. But why does a country supposedly awash with gas money and whose outlays on the provision of social services are seemingly risible suddenly need all this cash? Will China puts its hands in its pockets and where is the money likely to end up?

Turkmenistan is unwilling to embrace the more unmanageable aspects of modernity like an open society or the even vaguely comprehensive provision of healthcare, but it is striving nonetheless to convey the notion that it is speeding ahead towards the ranks of developed nations. Accordingly, state television and newspapers are little more than a wall-to-wall eulogy to the wisdom of Turkmenistan’s leader, the greatness of the country’s textile industry, the wonderfulness of its schools, the sterling dynamism of its army, the modernity of its confectionery factories, and so on and so forth. The most visible, and expensive, aspect of this tireless striving to some indefinable historical apotheosis has manifested itself in a gargantuan construction boom in the weird capital city, Ashgabat, and the utterly potty Caspian resort town of Awaza.

The numbers speak for themselves. Lording over his terrified browbeaten Cabinet, perennially smug-looking Berdymukhamedov announced in January that no less than $23.6 billion will be spent on hundreds of new buildings over the coming two years. Laughably, he suggested that some of this money would wash in courtesy of foreign investors. The only foreigner that would dream of parting with cash for Turkmen real estate, probably in Awaza, would do so exclusively in the hope it might put them in good stead when bidding for some government tender. Heaven only knows what proportion of the country’s economy that eats up, although with an official real gross domestic product of around $16 billion in 2009, it is safe to say that Turkmenistan may be spending a little beyond its means on things that it probably doesn’t really need. Plus ca change.

The bulk of construction work in Ashgabat appears to be focused on residential apartments, although no Turkmen building boom would be complete without a fair share of waste. As usual, dictator-serving French construction titan Bouygues has cornered the market for official buildings with its orders for a new Oil and Gas Institute, Makhtumkuli University, the Sport and Tourism Institute and extra premises for the oh-so-busy parliament.

Presumably, Ashgabat thinks that $4 billion here or there will come out in the wash, and that it can always offset the debt against future sales of gas. Because, of course, by the time the pipeline to China is pumping 40 billion cubic meters of gas annually, the country’s economy will be fully diversified, what with German teenagers clamoring for Turkmen-made jeans, Turkish children nibbling on Ashgabat choccies and German tourists hogging the sun-beds along the Caspian coastline. At least this is the hazy vision that appears to Berdymukhamedov in his sleep, amid dreams of grateful subjects willfully prostrating themselves at his diminutive frame as his pudgy face beams contentedly. Chinese economic policy is made of somewhat more reality-bound stuff, and they will likely part with requested cash as much of it will end up in their own pockets anyhow.

In December, the Turkmen state media announced that the government had awarded $9.7 billion to several foreign companies to develop South Yolotan. Among those companies was CNPC Chuanqing Drilling Engineering Company, which won a $3.13 billion deal to produce 10 billion cubic metres of gas annually. That is to say, please lend us $4 billion, so we can pay a company you own $3 billion to do work in our own country.

On the face of it, none of this necessarily makes bad economic sense, but being that it is Turkmenistan we are dealing with here, much room must be reserved for pessimism and cynicism.

Turkmenistan responding to the demands of a human rights group? Whatever next?
Last week, Vienna-based Turkmen Initiative for Human Rights and Turkmenistan’s Independent Lawyers Association, based in Holland, published a fascinating and grim report on the state of the country’s prisons. The principal premise underlying the survey was that the Turkmenistan’s harsh judicial system is leading to overcrowding in the jails:
Due to a huge, for the size of the country, prison population, Turkmenistan’s penitentiary facilities house 3.3 times the number of inmates they are designed to accommodate. This results in the fast spread of diseases and numerous deaths in the correctional facilities.
Accordingly, the report calls for milder sentences for minor crimes and the introduction of methods such as home arrest and fines instead of prison terms.
It also draws attention once again to the authorities failure to allow access to jails by the International Committee of the Red Cross. The government has made feeble overturtes in that direction in the past, but nothing has ever come of it.
Clearly, the main reason that the Turkmens don’t want foreigners nosing about their prisons is because of what they might find in there. Tuberculosis – which is likely to become worse in the country in the absence of Medecins Sans Frontieres, who left under bad cloud last year – is rampant. If TIHR’s report is even half accurate, the conditions are nightmarish and the cruelty routine.
But perhaps even more importantly, for the highly sensitive Turkmen authorities, prisons are full of political undesirables that might be inclined to say something inappropriate.
At any rate, it would have have been legitimate to expect this report and its findings to disappear down a deep, dark hole, but the government has responded with surprising alacrity, as AP reports:
Turkmenistan’s president has ordered the country’s maximum prison sentence cut to 15 years and called for improving prison conditions, state media reported Tuesday.
The measures come as doubts grow about the authoritarian government’s commitment to democratic reforms.
President Gurbanguli Berdymukhamedov told a meeting of security officials Monday that the maximum sentence will be reduced from 25 years and fines will replace prison time for certain crimes, state newspaper Neutral Turkmenistan reported.
Berdymukhamedov instructed the interior minister to study bringing prison conditions up to international standards, the paper said.
Where the authorities fall short, however, is on the issue of oversight. All Berdymukhamedov seems willing to commit to is to allow unspecified civic groups to monitor the state of jails. But given how craven and toothless those groups tend to be in Turkmenistan, there is no reason to believe that will come to anything.
Regardless of how this works out – and on the face of it, this announcement is unequivocably good news – the very fact that the government seems to have been stung into action by the report of an exiled activist group is a startling development.
Who knows that Berdymukhamedov hasn’t been surfing the net?

Turkmen President Gurbanguli Berdymukhamedov has by and large been able to get away with being cast in the reformer role, especially since not that many people have been paying attention.

The latest news is straining that impression now, however, especially with the Turkmen government wasting U.S. time and money.

Peace Corps, you shall not pass!

Peace Corps, you shall not pass!

On Friday, news emerged that Turkmenistan has taken to barring entry to Peace Corps volunteers, for reasons that remain utterly baffling. As Peace Corps country director Chris Leal told The Associated Press:

“We had the paperwork in place, and they were approved to come, but the day before they were due to leave the U.S., we received a diplomatic note from the embassy saying that they would be invited next year, but not for this year.”

Not much more seems to be clear beyond the fact that the Turkmen authorities saw fit to spring this surprise last minute.

This comes on the heels of the potentially even more disturbing story that has been unfolding for months; the Turkmen authorities’ decision to prevent students at the American University of Central Asia and the American University of Bulgaria from leaving the country (see here and here).

While the Peace Corps case is redolent of the kind of paranoid Turkmenbashi-style policies that one has long come to expect of Ashgabat, actually forbidding people from leaving their own country is beyond the pale.

"Oh, you're not going anywhere, young girl"

"Oh, you're not going anywhere, young girl"

As the U.S. Embassy in Turkmenistan noted in a recent statement protesting officials action to bar students from leaving via Ashgabat airport last month:

“As recognized in the Universal Declaration of Human Rights, everyone has the right to leave his or her country and to return to his or her country.”

To the U.S. government’s credit, they have been candid in effectively calling out Turkmenistan for what it is; a violator of human rights.

And so much for Assistant Secretary Robert Blake’s surreal observation that “human rights is not as big an issue in Turkmenistan as it is in some of the other Central Asian countries.”

Well, Turkmenistan breaching human rights? So what, one might well be expected to retort. There is hardly anything surprising about this, especially against the backdrop of an increasingly sycophantic bureaucratic deference to Berdymukhamedov.

The issue is that, as usual, these Central Asian tin-pot dictators demand international respect, without being able to conduct themselves with a modicum of civility. Quite literally in Berdymukhamedov’s case.

In his recent meeting the Secretary of State Hillary Clinton, he is reported to have pressed on the two issues raised above. About the Peace Corps, he spoke highly, praising the valuable contribution they make to the country. On the students issue, he is supposed to have been receptive.

Yet the outcome in both areas could not have been more catastrophic. North of 200 Turkmen students will have their university careers possibly irreversibly ruined, while Peace Corps will be operating with one armed tied behind their back for at least the coming year.

Berdymukhamedov comes out of this as not just a petty dictator thug, which he is; but a dishonest and cowardly one too. At this rate, he will be making Niyazov look good.

The mystery here is what it is that has possessed the Turkmens to pursue this line of PR self-destruction. Evidently, Ashgabat feels confident enough of the fact that flagrant breaches of human rights and reversion to backward isolationism will not do excess damage to its commercial ties with international partners, including the West.

As nose-tweakings go, this is about as bad as it gets, and if the United States doesn’t take a firm position now, well, then it probably never will.