The U.S. Department of State’s Investment Climate Statements provide information on the business climates of more than 170 economies and are prepared by economic officers stationed in embassies and posts around the world. They analyze a variety of economies that are or could be markets for U.S. businesses.  The Investment Climate Statements are also references for working with partner governments to create enabling business environments that are not only economically sound, but address issues of labor, human rights, responsible business conduct, and steps taken to combat corruption.  The reports cover topics including Openness to Investment, Legal and Regulatory Systems, Protection of Real and Intellectual Property Rights, Financial Sector, State-Owned Enterprises, Responsible Business Conduct, and Corruption. 

Executive Summary 

Turkmenistan is currently considered high risk for U.S. foreign direct investment due to endemic corruption, a weak commercial law and regulatory regime, opaque and onerous bureaucratic processes, and strict foreign currency controls. The government has not taken measures to incentivize foreign direct investment outside the petroleum industry and there is no significant U.S. FDI in the country. Turkmenistan has the fourth largest natural gas reserves in the world, though just outside the top ten largest natural gas producers. Almost all government revenue comes from the sale of natural gas, mostly to China, with a lesser dependence on export of petrochemicals, cotton, and textiles. 

Strict foreign currency controls have resulted in a black-market exchange rate for dollars that averaged over five times the official rate in 2020-2021. This results in an inability to repatriate profits or to convert local currency to dollars to import supplies or equipment. It also distorts data, especially GDP, contributing to the widely held view that most economic indicators released by the government are unreliable. 

The government often fails to implement or consistently enforce investment-related legislation. There are no meaningful legal protections against government expropriation of assets and there is no independent judiciary. Foreign companies typically pay significantly higher prices for services. Weak education and healthcare systems, as well as underdeveloped physical and telecommunications infrastructure are also challenges. 

Turkmenistan’s status as one of the most restrictive and isolated countries in the world only grew during the pandemic; the country’s borders were closed for average Turkmen citizens, internal movement between provinces restricted, and regularly scheduled commercial air traffic completely stopped in March 2020 and continuing through publication in April 2022. International travelers, to include foreign workers in the construction, oil and gas industries, travel in and out of the country on charter flights. 

The government often counts foreign loans as FDI, but there is little genuine FDI in the country. The government has promoted efforts to expand downstream petrochemical production, reduce greenhouse gasses, especially methane, improve energy and water efficiency, increase digitalization, and begin production of hydrogen.