Turkmenistan is a physically large country (slightly larger than the state of California) but sparsely inhabited. The Government of Turkmenistan (GoTM) reports a population of 7.06 million people, but this number is widely viewed as inflated; most non-GoTM estimates are between three and four million. Although Turkmenistan’s vast natural gas and oil resources continue to attract foreign companies, the GoTM has yet to implement reforms needed to create an inviting business climate where foreign investment is truly welcomed, and property rights are guaranteed. In addition, the GoTM is centralized and non-transparent, with the government preventing the release of much information that is readily available in most other countries. Turkmenistan publishes limited national statistics, but its data collection and evaluation methodologies are often not credible. The World Bank does not use the GoTM’s GDP data in its global and regional analytical reports, due to lack of reliable official statistics. The IMF uses its own calculations for GDP growth which in some years differs substantially from official government statistics. The GoTM does not consent to publish IMF reports on the economic, financial, and exchange rate policies of the country.
Turkmenistan continues to be a major producer and exporter of natural gas. Roughly half of Turkmenistan’s natural gas production is used domestically, and the remainder is exported. China is by far Turkmenistan’s biggest gas customer, importing around 40 bcm of Turkmen gas annually, which constitute more than 70% of Turkmenistan’s gas exports. Reliable and timely trade data is not available, but most sources agree that Turkmenistan typically runs a trade surplus due to natural gas sales.
The top U.S. exports to Turkmenistan in 2024 were agricultural machines and chemical products. The top U.S. imports from Turkmenistan were fertilizers. The top four reasons for U.S. companies to consider exporting to Turkmenistan include Turkmenistan’s preference for reliable Western industrial and heavy equipment, plans to increase manufacturing of consumer goods, diversification of its agricultural sector, and its strategic geographic location to take advantage of increased regional trade.
Turkmenistan’s government is autocratic, regimented, and highly bureaucratic and offers no real opportunities for political participation by ordinary citizens. Journalists are not free to criticize the government and there are no genuine opposition political parties. Turkmenistan’s economy is centrally managed, and many business decisions appear politically motivated. The country was ruled for 15 years by Gurbanguly Berdimuhamedov before he announced a snap election in February 2022 that was won by his son, Serdar Berdimuhamedov, 30 days later. The OSCE did not monitor the election due to the short time frame, COVID related quarantine restrictions, and lack of reforms taken by the Government of Turkmenistan to address longstanding election related concerns consistently cited by the OSCE. The U.S. Embassy was not allowed to freely monitor the election.
Turkmenistan allows only limited private ownership of land, and its largest industries are state-owned. The government also provides subsidies in key sectors such as agriculture and manufacturing. Retail trade, services, and small-scale manufacturing are the main sectors in which private ownership is permitted although sometimes with government-set price controls. In 2012, Turkmenistan announced plans to privatize state-held properties under the State Program for Privatization of Enterprises and Objects of State Property. However, the process has so far proceeded slowly with few buyers willing to meet the government’s asking prices, or in some cases, sales are made to other government-controlled entities. A limited number of foreign petroleum companies successfully operate under production sharing agreements (PSAs). Turkmenistan’s currency is the manat (TMT).
The official exchange rate of 3.5 TMT has been in place since 2015. However, foreign exchange is strictly rationed and very few businesses or individuals can convert the currency at the official rate of 3.5 TMT/USD. To compensate, an unofficial market for foreign exchange has long existed in the country. Over the last few years the rate has generally fluctuated between 19 and 19.6 TMT/USD. U.S. businesses face severe difficulties converting manat to USD and businesses earning manat should assume they will not be convertible to USD. This extends to U.S. businesses selling to Turkmen customers that are often unable to convert manat to USD to settle contracts. U.S. businesses selling products in Turkmenistan typically require prepayment in USD, or a contract for payment through the State Bank for Foreign Economic Affairs (also known as Vnesh Econom Bank or Vneshka).
Despite these challenges, opportunities exist for U.S. companies able to structure deals around GoTM priorities. The GoTM and its contractors continue to request energy services and engineering, power generation equipment, water treatment solutions, and medical technology, often preferring to partner with U.S. firms. Successful market entry typically requires sovereign or ministry-level sponsorship, partnership with local state entities, and financing arrangements—often through export credit agencies or tied loans—that reduce fiscal pressure on the government.
Political Environment
Visit State Department’s website for background on the country’s political and economic environment. https://www.state.gov/countries-areas/turkmenistan/