Financial and economic sector: Platform of growth

Macroeconomic results of 2019 were visual indication of financial stability, stable dynamics of growth in all sectors of national economy including social sphere.

This is indicated by the growth of the GDP, the main macroeconomic indicator. In 2019, this indicators of 6.3 percent including 4.1 percent in industry, 14.2 percent in trade and 10.1 percent in transport and communication sphere.

According to the experts of International Monetary Fund, this indicator is one of the highest in the world and the highest among Central Asian countries.

Speaking of other statistical data, positive results in non-governmental section are worth to be mentioned. In general, 65.3 percent in production structure falls on the share of private business. Due to integrated measures, the export of production has grown by 4.6 percent, having exceeded 9 billion manats, comparing with 2018.

The revenue of the State budget has been fulfilled by 100.6 percent while the expenditure by 99.9 percent by the outcomes of 2019.

Keeping up of high level of population occupancy has been outlined as an integral part of social strategy in the year under review. This is indicated by 11.000 work places opened in 2019.

Growth of income of Turkmenistan citizens, which is provided by annual increment of salary wages, pensions, states allowances, as well as well-thought pricing policy of the government, support of private initiative and other measures are other indicators demonstrating the prosperity of the country.

Stabilization fund, which resources are used for financing of priority investment projects, makes positive impact on economic situation of the country. it allows minimizing the influence of unfavourable external factors on certain sectors of national economy and provides the growth of work production and transfer to innovative management methods.

Great attention is also paid to the insurance. The world practice shows that development of this sphere becomes necessary condition in market relations. Renewal of existing standards and regulations in this sphere has been carried out in last and previous years.

For improvement of insurance activity in 2019, the Resolutions of President Gurbanguly Berdimuhamedov approved the Order of definition of amount of insurance payment ((insurance compensation) that has to be paid depending of severity of damage related to insurance case, Provision on Mandatory State personal insurance of employees working at facilities with increased risk from work related incidents and work related ill-health.

Adoption of the Programme of social and economic development of the country in 2019 – 2025 and Programme of development of foreign economic activity of Turkmenistan in 2020 – 2025 as well as start of realization of the Concept of transit to digital economy in 2019 – 2025 are worth to be mentioned among the main events of 2019.

Each programme presents precise action plan on strategic directions and serves as a platform for implementation of profile activities. Another stage of melty-level reformations has started after adoption of the above-mentioned documents.

Banks, which have special role in steadfast growth of national economy and integration of it into the system of world economic relations on beneficial terms, are rapidly developed in the result of reforms. According to statistical data, positive indicators are observed in this sphere.

President Gurbanguly Berdimuhamedov notes that the main objectives of credit facilities these days is to keep inflation level in set limits, to provide national economy with necessary volume of resources by regulation and control of funds.

Coning back to the main provisions of seven-year programme of social and economic development of the country, it is worth to mention that structural reformation of industrial sectors and services sphere will be continued in 2020 by support of high technology production. At the same time, transfer from industrial production with low added value and scientific and technical level to production with high added value is planned.

Activation of work for reduction of the state-owned facilities by privatization and reformation into joint stock ventures were outlined among important directions. At the same time, it is planned to use world advanced scientific and technological achievements in the sphere of management and production.

Globalization and integration on international level open entry to big markets to the facilities, allow them using dividends from realization of own investment projects in full scale. Taking this factor into account, the Programme includes the measures related to correction of marketing strategy.

Reduction of the state expenses and increment of capabilities for attraction of the capital of private sector and foreign companies were outlined among the main directions. Development of new forms of investments, in particular by establishment of partnership between the state and business community, has been carried out for achievement of set goal.

Power energy, production and processing of oil and gas, electronics, industry, agriculture, transport, communication and tourism have been highlighted as the main branches as the main locomotives of the economy in near-term perspective.

Speaking of expected results, it is worth mentioning that successful solution of objectives outlined in the Programme of the President will allow achieving following indicators: the growth of the gross domestic product in Turkmenistan will be 8.2 percent in Turkmenistan by 2025, share of industry in the structure of the GDP – 33.8 percent, agriculture – 8.9 percent, construction – 11.5 percent and service sphere – 45.8 percent.

It is thought that strengthening of competiveness of national industry, improvement of production potential, expansion of range of national product brands will be provided by rational use of local material resources, increment of their processing and establishment of high added value.

It is planned to introduce effective management methods, attract actively entrepreneurship as well as unused reserves and capabilities provided by colossal natural resources of the country, its beneficial location and geopolitical factors.

Special attention is paid to the formation of special economic zones and corridors, which will connect Turkmen regions between each other and with neighbouring states, creation of industrial parks and clusters with developed transport and logistic infrastructure with the entry to foreign markets.

It is forecasted in near future that total volume of investments into the main capital planned in the country will be equal to 229.3 billion manats, from which 91.3 percent or 109.2 billion manats will be used in production sphere. Development of these investments will allow opening new facilities and provide new work places.

Dynamic growth of volumes of retail sale is expected in mid-term perspective. According to expert evaluation, this indicators will be 81 billion manats in 2025 with 29.1 percent growth comparing with 2019 (62.7 billion manats). Share of trade of non-government sector will reach 91 percent.

At present time, the country produce wide range of high quality production competitive in foreign market, which provides local food abundance and allowing to solve effectively the objectives of import substitution and improvement of export positions of Turkmenistan.

According to the Programme, the volume of production of local consumer goods will reach 16.1 billion manats in monetary equivalent and comparing with the same indicator of 2019 (13.2 billion manats) will grow by 22.2 percent.

It is also expected in the next seven years that total volume of foreign trade will be equivalent to 135.2 billion US dollars where its export component will be equal to 84.1 billion US dollars while import – 51.1 billion dollars. Based on analysis of dynamics of statistical data of previous years, forecasted indicators and available resources of development of trade relations, the specialists note that planned obligations will be fulfilled annually.

It is planned and modernized to build various facilities including educational objects, health protection, cultural, living and infrastructural facilities in the velayats of the country in 2019 – 2025.

9,976.7 billion manats (including 1,944.3 million manats in Ahal Velayat, 1,244.1 million manats in Balkan Velayat, 2,907.3 million manats in Dashoguz Velayat, 1,851.3 million manats in Lebap Velayat and 2,029.7 million manats in Mary Velayat) will be sent for these purposes.

Continuing the subject, it is worth to mention that in 2020, President Gurbanguly Berdimuhamedov set objective to the establishments of financial sector to develop new National Programme of improvement of social and living conditions of rural population until 2025. Big investments will be sent for implementation of activities outlined in the programme.

Perspectives of development of the country are directly connected with enforcement of external factors like further integration into the world economic relations, activation of beneficial trade and economic and investment partnership, new directions of cooperation against the background of scientific and technical progress, development of coordinated solutions for current issues of the global agenda.

Advantages of modern technologies are obvious for the achievement of the SDGs, which has been integrated into all government programme and big economic projects as well as into social policy. In this regard, big attention has been paid to stimulation of development of tele medical technologies, online and distant education, electronic government and other fields in the country in 2019.

Digitization of management and production processes will allow making smart cities in near future, which requirements of the population will be satisfied by more rapidly and comprehensively. New technologies also supports opening of new work places, for example in the sphere of computer sciences ad information technologies. Taking this factor into account, special attention was paid to training of qualified specialists, especially in the sphere of digital economy, last year.

Outcomes of the year shows that integrated work has been carried out for digitization of all segments of national economy introduction of scientific developments into production. All plans were executed by using of IT-technologies and establishment of new structrues in this field.

Different ministries, departments, banks, agencies as well as entrepreneurs of the country were implementing specific measures for improvement of equipment and facility base, establishment of necessary network platforms allowing integrating services provided to the population into internet network, making shopping online through national payment system.

The main advantage of similar programmes are in common accessibility and easy use. Work of Turkmen businessmen, who successfully adopts the practice of foreign states and bring modern technologies, which are widely spread and have proven its efficiency in the world, is worth to ne mentioned.

In this case, active work of Rysgal Joint Stock Commercial Bank is worth to be mentioned. Payment mechanism using QR-codes developed by the bank allows mobile phone users paying for any goods and services, having scanned optical symbols, without cash orbank cards.

Continuing the review, it is important to note the timeliness of adoption of the Law on Cyber Security adopted in 2019, which is aimed at protection of sovereignty, interests of the country, prevention of threats to network security as well as at the provision of public order, legal rights and interests of organizations and citizens.

Appearing of new branch for the country – computer production, makes this objective quite current in the context of establishment of ‘digital’ Turkmenistan and provision of requirements of the economy with own information technologies.

In addition, work for establishment of central system of the government trade network on the territory of Ashgabat, which allows monitoring goods in online mode starting from delivery to warehouses, dispatch to shops to sale volumes and remains, has been carried out throughout the year.

Special website with information about each shop of the Ministry of Trade and Foreign Economic Relations with addresses, contact details, variety of goods including quality, date and place of production, package, expiry date, etc. has been opened in the internet for the convenience of consumers.

Service for buying of railway e-tickets in online mode has been launched. Projects of digitization in economic, financial and banking sphere, electronic services tax authority are under development. At the same time, steadfast training of personnel for servicing of digital networks, including in Polytechnical secondary professional school, where the best world educational practices are implemented, is carried out.

Implementation of the Programme of development of private entrepreneurship, achievement of coordinated work of the branches of national economy and its non-government sector are among priority vectors of the policy of the Head of Turkmenistan. In this context, development of draft law on the government and private partnership is outlined as persective direction of activity of the Mejlis.

Taking into account the attention paid to bringing of budget and tax, monetary and credit relations in compliance with recognized standards of international law, analysis of legislation regulating banking activity has been carried out regulatory acts in this sphere has been improved in 2019.

Continuing the review, it is worth to highlighted the subject of development of economic diplomacy. It is generally known, that this term is explained by the activity of the government institutions with attraction of public and entrepreneurship structures, application of knowledge of modern economic, political and legal sciences and instruments, methods and forms of diplomacy, use of bilateral and multilateral mechanisms for achievement of national interests on the world arena.

In this context, it is important to highlighted that at modern stage, Turkmenistan has significantly activated its role in global space, having extended the borders of cooperation with different countries of the world and leading financial organizations. Special attention was paid in 2019 to intensification of fruitful contacts, including with the countries of the region and CIS.

Development of the partnership format, which is based on common values and united by the same goals and objectives, is the main condition of stability of global economic system. Today, following this position, Turkmenistan practically demonstrates the willingness to participate in this process and to support in exchange of positive practice.

Successful first Caspian Economic Forum in august 2019 is worth to be mentioned as a visual example. Proposal of the Head of Turkmenistan has become the result of deep analysis of modern processes f development, place and role of Caspian Sea as important geopolitical and economic space.

It is worth to remind that rich programme of the forum has included numerous events like working meetings and talks, intergovernmental sessions, sessions on ministerial levels, business assemblies, export consultations, topical conferences and seminars.

Caspian exhibition of innovative technologies and International Motor exhibition Türkmen sährasy-2019, under which achievements and potential of different branches of the economy of our country, Caspian states and their partners have been demonstrated, were the main events among them.

At the same time, importance of the meeting of the heads of competent economic authorities of the Republic of Azerbaijan, the Islamic Republic of Iran, the Republic of Kazakhstan, Russian Federation and Turkmenistan is worth to be highlighted.

Role and place of member states of the Agreement between the Governments of Caspian states on trade and economic cooperation in global system of the world economic relations, potential of expansion of productive contacts in the sphere of digital economy and special economic zones, opportunity of implementation of joint investment projects and programmes were the main subjects of discussion.

President Gurbanguly Berdimuhamedov notes that need of establishment of the mechanism for direct dialog between the governments, profile economic institutes and business structures interested in work in Caspian Sea has matured in current conditions.

Therefore, strengthening of regional cooperation not only as an instrument of intensification of economic cooperation but also as important factor in provision of sustainable development acquires special currency.

Special attention is paid in the country to establishment and development of special free economic zones, which are integral part of the world economic relations these days. Formation of FEZs supports to enhancement of competiveness of national economies, expansion of export capabilities of Caspian states and in the result, to prosperity of the countries and wealth of the nations. This subject has also been included into agenda of the above-mentioned meeting.

In this case, it would be appropriate to mention the measures taken in this direction in Turkmenistan. It includes realization of relative Concept approved by special Resolution of President Gurbanguly Berdimuhamedov.

Current works are to support to saturation of local consumer market with good, increment of working occupancy of the population, formation of modern market infrastructure, increment of foreign currency income to the budget as to transfer of technologies and management know-hows, growth of volumes of foreign investments.

The 83rd session of the Economic Council of the Commonwealth of Independent States, which was held in Ashgabat on September 13 under the chairing of Turkmenistan in the CIS in 2019, is another important event of the last year. Priority directions of interstate partnership as well as strengthening of regulatory and legal framework of productive contacts between members states of the Commonwealth have been reviewed at he Forum.

Draft Declaration on strategic economic cooperation of the member states of the CIS, which development was initiated by Turkmen leader, has been in the centre of discussion of participants. This document has been adopted by the outcomes of the session of the Council of the heads of the CIS states, which was held in the capital of our country in October 2019.

Active cooperation with International Monetary Fund, the World Bank, European Bank of Reconstruction and Development, the Islamic Development Bank and other structures has been also continued. Such format of the partnership provides further improvement of national financial and banking system, investment into development of leading branches of national economy.

Approval of the Programme of development of foreign economic activity of Turkmenistan in 2020 – 2025 by the Resolution of President Gurbanguly Berdimuhamedov was an important event in this aspect.

The Programme provides improvement of financial and economic, management and legal environment for stimulation of export oriented and import substitutive production.

The document sets out activities for effective realization of proposal made by the President, which received support of competent international organizations, including the agreements achieved by the outcomes of the First Caspian Economic Forum.

Measures for attraction of big foreign investments into different spheres of the economy, formation of favourable investment environment for opening of joint and foreign ventures in the country have been outlined by the Programme among practical measures for development of foreign economic activity.

At the same time, the focus is made on the necessity of arrangement of work of the main branches of national economy on innovative basis, growth of competiveness of production by quality and price in the world market, increment of share of private sector in foreign economic relations of Turkmenistan.

Therefore, this year will be new stage of progress of our state. Such mechanisms and instruments as the government and private partnership, investment, scientific and technological cooperation with all interested parties will be on high demand.