Chronicle of 2018: Financial and economic sector

Provision of stable development of Turkmenistan, support of initiative entrepreneurship, innovative start-ups and technologies, establishment of joint and stock ventures, stock exchange and securities market, continuation of fundamental reforms in all branches were priority directions of home policy of the country in 2018.

For achievement of set objectives, the Head of the State has named the improvement of regulatory and legal base of this sphere resting on systematic and comprehensive study of complicated economic and financial situation in the world among key objectives. At the same time, the necessity to pay close attention to complex global processes, to take measures for reduction of harmful external effect on national economy on legal base has been highlighted.

First of all, it is worth to mention the approval of the Programme of development of economic, financial and banking system for 2018 � 2024 as well as the Action Plan of the implementation of this Programme in March among important events of the year.

The work for further stable growth of all branches of national economy, improvement of production potential, activation of investment activity, provision of targeted use of budget funds, reformation of budgetary and tax systems has been started according to the provisions of the Programme.

Practical measures for modernization of labour legislation, reformation of the system of the state statistics according to international standard requirements, standardization and insurance have also been taken.

President Gurbanguly Berdimuhamedov highlights that this is only diversified economy based on innovations that would be stable in long-term period. Therefore, significant part of the investments is sent to the development of hydrocarbon processing facilities, increment of production output of power generation facilities, chemical industry and transport and communication complex.

Integrated work for implementation of advanced technologies in all spheres, increment of export volumes of competitive goods, expansion of import substitutive production and support of private sector has been carried out throughout the year.

Together with the policy of wide crediting and reduction of unnecessary expenses, the programme of industrialization and growth of the branches, which are not related to hydrocarbon resources, have been implemented. Practical measures taken in this direction allowed providing the GDP on 6.2 percent level in 2018. The volumes of export to foreign countries have exceeded 11,200,000,000 US dollars.

Salary wages, pensions and state allowances have been increased. 1,704 facilities to the amount of around of 10 billion dollars have been built and put into operation.

Import of raw materials, feedstock, food and non-food production to the country has been reduced by the expansion of production of various high quality local commodities from local resources.

Construction of industrial and infrastructural facilities has been carried out in the regions for the period under review.

The volume of drawn investments from all sources of financing was 40.3 billion manats, 63.7 percent of which were used for construction of production and 36.3 percent for building of social and cultural facilities.

Stability of macroeconomic indicators is very typical for modern Turkmenistan. It was noted several times by the experts of the world financial structures, in particular by the International Monetary Fund.

Assessments and forecasts of the IMF invariably indicate that the country confidently continue its social and economic development owing to far-seeing policy of Turkmen leader.

National model of marketing economy is improved in the process of integrated reforms taking into account internal interests and tendency of integration processes in the world.

In this context, the statements of the IMF missions, which took place in February and October 2018, are worth to be mentioned. The press releases, which were issued by the outcome of the working visit of the delegations of this competent organization, stated that changes of the ration between local demand and export with the increment of the latter have happened in the structure of economic growth of Turkmenistan. Mainly, this was provided by the efficiency of the state programmes of import substitutive production and export increment.

Opening of new gas processing complexes and implementation of major projects of regional and international significance were among important steps. The experts highlighted the improvement of prices on petroleum production in the world market, which makes positive effect on the economy of Turkmenistan, foreign turnover and fulfilment of the main financial plan of the country.

Speaking of the future development of our state, the IMF stated the importance of the Programme of social and economic development of the country in 2018 � 2024, which main goals are to intensify and accelerate structural reforms, to stimulate stable and comprehensive growth in long-term future based on diversified market economy.

In addition, the importance of increment of export of natural gas, petrochemical production as well as the necessity of further privatization of the state-owned facilities and creation of free economic zones has been highlighted. Proposed measures are to support the attraction of additional including foreign investments.

The Resolution of the People's Council in regulation of the provision of the population of Turkmenistan with electricity, gas, water and salt from 2019 was one of important events of the last year.

Speaking of this, President Gurbanguly Berdimuhamedov noted in his speech at national forum: Efficient use of natural and economic resources, adaptation of the society, state and every individual to market economy are the requirements of the present. These issues require well-thought decision. At present, the income of the population has significantly grown, wide opportunities to earn the money and educate their children have been made for every family. In this regard, I think that is would be reasonable to take the subjects of rational use of the resources provided by the state in a new way.

This decision is mainly dictated by the fact that natural resources as well as increased economic capabilities of our country have to serve not only to current but to future generations as well.

In the conditions of market economy, special place is given to efficient activity of banking sector, which has turned into one of the most actively developing spheres. The Head of the State has called the use of legal mechanisms for keeping of the stability of national currency, expansion of services and improvement of reliability of bank guarantees as the key vector of monetary policy.

At the same time, great attention is paid to the improvement of payment settlement system based on the world practice, introduction of scientific and technical innovations, reduction of money, which is taken out of the country, increment of the amount of foreign currency coming to the country.

In this context, it is worth mentioning that President Gurbanguly Berdimuhamedov set the objectives on bringing of the regulations aimed at the protection of financial stability, growing of exchange rate of national currency, provision of stability of payment balance of the country to compliance with national standards to the deputy corps of the Mejlis of the sixth convocation.

In the result, 2018 has been marked with the development of the infrastructure of electronic banking, growth of non-cash payments, increment of banks capitalization, crediting of medium and small entrepreneurship, provision of new banking production.

According to macroeconomic indicators, the exchange rate of manat remains stable and inflation is within set limits.

Total volume of credits granted by the banks of the country for expansion of modern facilities making import substitutive and export oriented production has grown by 10.2 percent and by 20.4 percent in non-governmental sector. Number of bank cards increased 1.36 times, number of ATM � 1.31 times. The volume of non-cash payments in 2018 has grown by 1.12 times.

Reviewing the outcomes of the last year, it is worth highlighting that the 25th anniversary of manat circulation has been marked in 2018. This measure, which was taken quarter of the century ago, allowed creating favourable conditions for coordinated development of the economy and pursuing of unified state monetary policy.

According to international experts, large-scale measures taken in monetary and crediting, tax and budget policy I the last year, supported the enhancement of investment potential, consolidation of financial base, wide application of the standards of corporate management and banking monitoring, growth of the spectrum of operations.

Continuing the subject, it is important to highlight another direction of economic strategy of President Gurbanguly Berdimuhamedov � the improvement of fruitful cooperation with international financial structures.

Same as in previous years, Turkmenistan pays great attention to the expansion of the cooperation with the International Monetary Fund, the World Bank, European Bank for Reconstruction and Development, Asian Development Bank, Islamic Development Bank and other.

Improvement of investment climate and attraction of major investments to technological rearmament of the main production funds, renewal of the infrastructure are the main goals in this field, which supports active integration of our country to the world economy and improvement of competiveness of national economy.

Participation of the Asian Development Bank and Islamic Development Bank in the financing of investment programmes in Turkmenistan can be brought as an example.

Taking into account huge energy resources of the country and strategic location, the operations of mentioned banks are focused on the improvement of transport and energy sectors, support of development of the entrepreneurship, promotion of major projects of expansion of regional cooperation and trade.

It includes Turkmenistan � Afghanistan � Pakistan � India gas line, which is currently under construction and which will significantly increase export potential of the country, will support the improvement of energy security and economic stability in Central Asia and will be strong foundation for the achievement of the Sustainable Development Goals.

In the meantime, work plan proposed by the ADB, which provides the investments to Turkmen economy in 2019 � 2021 to the amount of one billion US dollars for the implementation of projects in different fields is worth to be mentioned. In particular, the bank finances the construction of TAP power and fibre optic lines, building of circular energy system and other important infrastructural projects in transport and communication sphere.

Transportation of hydrocarbons is another direction of investment cooperation. Turkmenistan with its colossal resources makes considerable input to energy provision and security of the peoples of the planet. This global objective provides growing interest of the leading business circles of the world to our country.

Development of beneficial international cooperation in investment sphere provides the implementation of versatile economic potential of Turkmenistan and its further dynamic development.

Willingness of large financial structures to invest significant amounts to the economy of Turkmenistan indicates high trust to our country as to reliable and responsible partner that has an authority and big capabilities.

Implementation of new edition of the Programme of improvement of social and living conditions of the regions is an integral part of progressive reforms. Completion of the objectives outlined in the Programme supports the improvement of production, economic, technical, social, management, scientific and educational, natural and resource potential.

Numerous residential complexes, schools, kindergartens, health protection and tourist as well as engineering facilities have been put into operation for the period under review.

Another complex of residential estate Tayze Zaman in Bagtiyarlyk etrp of the capital, multifunctional clinic and living complex in Turkmenabat, Lebap Velayat, child hospital in Mary, aquapark with recreation centre and health improving facility in Avaza National tourist zone were among large-scale constructions in 2018. Business complex in Ashgabat, glass production facility in Ahal Velayat, combined cycle power station on the territory of Mary State Power Station, Garabogazkarbamid plant, petrochemical complex for production of polyethylene and polypropylene in Balkan Velayat have been opened.

Serhetabat � Turgundy, Turkmenabat International Airport, Turkmenbashy International Seaport have been put into operation. In addition, the construction of another part of Turkmenistan � Afghanistan � Pakistan � India transnational gas pipeline, Turkmenistan � Afghanistan � Pakistan power and fibre optic lines has been launched, foundations of modern villages and settlements as well as many other different facilities have been laid.

Improvement of the system of financial reporting serves as the main coordinating mechanism for establishment of fruitful partnership with the sates of the world and attraction of the investments to the economy of the country.

In this context, it is necessary to note that preparation work on changeover to international standards of accounting and financial reporting has been carried out withing the last year.

The advantages of the reforms in this sphere are that they are aimed at the provision of the transparency of financial condition of legal entities and physical bodies and the reflection of actual economic situation.

Reformation of tax system is key vector of the strategy of the country's development. Modern methods are actively used in this direction, relevant regulations and legal acts are improved and training of qualified specialists is carried out.

Adoption of the Concept of development of digital economy in Turkmenistan in 2019 0 2025 was an important event in 2018. It is planned to implement the concept in three stages (the 1st one in 2019, the 2nd in 2020 � 2023 and the 3rd in 20224 � 2025), which will provide comprehensive progress of the country, will support business and investment activity, introduction of advanced methods of government administration, creation of new work places and steadfast increment of the wealth of the nation.

Implementation if intellectual potential of the society, high level of education, scientific studies and qualified labour force provides big influence on the rates and quality of economic growth in modern conditions. Special place in the state strategy is given to the measures for efficient management of labour resources and formation for the implementation of constitutional rights of citizens to work.

Great attention is paid to the improvement of personnel potential in the aspect of intensive industrialization of the country, transit to digital economy and formation of informational society, development of market economy and entrepreneurship. In this regard, the importance of the Programme of improvement of the employment system of young specialists in Turkmenistan in 2018 � 2020 is worth to be mentioned. The document is aimed at further improvement of social and living level of the youth, creation of wide opportunities and the most favourable conditions for their efficient and productive work.

Development of entrepreneurship is one of the key aspects of the State course. At the same time, great attention is paid to the implementation of the Programme of beneficial crediting of small and medium business.

Today, representatives of private sector take active part in the solution of the objectives set to different segments of national economy like implementation of the projects in construction sphere and construction material industry, provision of food abundance; they invest to high technology production, respond rapidly to the market situations and try new spheres. It allows increasing the volumes of production as well as creating additional work places.

For ten years from the establishment of the Union of Industrialists and Entrepreneurs, which unites more than 20 thousand businessmen at present, the share of non-governmental sector of the economy in the GDP has significantly increased, having made more than 60 percent without accounting of fuel and energy complex.

New phase of reforms in national agricultural complex supports the intensification fo economic and export potential and improvement of the wealth level of the population of the country. Integrated measures in this sphere area aimed at the improvement of the system of beneficial crediting, which allows using attracting private entrepreneurs to the development of the structures of processing industry in agriculture, production of quality food products.

Today, strong resources, hydrocarbon and transit potential of Turkmenistan is actively involved to global system. Efficient investment policy of the Head of the State based in international and regional cooperation is important part of the influence in development of these processes. In the result, stable high rates of national economy and positive dynamics of harmonic internal development are kept.

Open doors policy pursued by Turkmen leader is a substantial argument in establishment of long-term business contacts. The interests of leading foreign investors are provided by the presence of hue natural resources, export capabilities, industrialization of the country and developing market of trade and services.

Implementing large-scale programmes aimed at the modernization and diversification, improvement of competiveness of national economy, our state expands beneficial and fruitful cooperation with representatives of foreign business, provides significant support to their activity by tax, customs, visa and insurance benefits.

Adoption of relevant legal acts regulating the activity of investors in the country as well as the course toward the privatization of the state property and de-nationalization plays great role in this. This is indicated by the share foreign investments to Turkmen economy and number of joint ventures growing every year.

Today, foreign companies participate in financing of the projects in such sections as heavy industry, textile branch, agriculture, electronic industry, production of construction materials from local resources, tourism, transport and communications, modernization of civil aviation, railroad and maritime transport infrastructure, construction of roads and use of national space satellite.

The activity of joint intergovernmental commissions for economic cooperation, bilateral business councils as well as regular business forums and international exhibitions support the increment of volumes of foreign investments.

Achieved relative agreements and memorandums signed between Turkmenistan and other states make positive effect on creation of favourable conditions of efficient long-term cooperation with the world community in all spheres.

Summing up the outcomes of 2018 in financial and economic sphere, it can be confidently stated that resting on gained positive practice and huge achievements, our country is willing to make another step toward the progress.

This is indicated by the fact that the State budget of Turkmenistan for 2019 provides significant volumes for support of stable high growth rates of branches of national economy by its diversification and implementation of major investment projects having international and regional significance.

In general, social and economic strategy of President Gurbanguly Berdimuhamedov, which is oriented to the provision of interest of every Turkmenistan citizen, fully meets the Sustainable Development Goals of the United Nations.

Source: Turkmenistan State News Agency-TDH