Turkmenistan’s Unique Kleptocracy

Turkmenistan’s mod­el of klep­toc­ra­cy is tox­ic — and the inter­na­tion­al com­mu­ni­ty knows about it.

Turkmenistan is one of the most closed and repres­sive coun­tries in the world. Its pres­i­dent, Gurbanguly Berdymukhamedov, has cre­at­ed one of the most intense and bru­tal cults of per­son­al­i­ty on the plan­et; those who dis­agree with him are silenced, impris­oned, and tor­tured, and this nation of few­er than three mil­lion indi­vid­u­als has at least 121 forcibly dis­ap­peared polit­i­cal pris­on­ers in its penal sys­tem, and count­less oth­ers held for any kind of per­ceived insubordination.

A coun­try with the world’s fourth-largest gas reserves, Turkmenistan’s econ­o­my is dri­ven by hydro­car­bons: Oil and gas exports make up 25% of the nation’s GDP. Rather than enrich­ing the pop­u­la­tion, this mon­ey goes into the pri­vate hands of the pres­i­dent — or his pri­vate bank account — leav­ing the country’s peo­ple impov­er­ished, mal­nour­ished, and iso­lat­ed from the rest of the world.

That Turkmenistan’s cit­i­zens live in iso­la­tion and under severe repres­sion is with­out a doubt. However, the elites — the klep­to­crats — run­ning the coun­try and rob­bing Turkmenistan’s cit­i­zens of its nat­ur­al wealth are any­thing but isolated.

Our recent report by Crude Accountability, “Turkmenistan: A Model Kleptocracy,” doc­u­ments the shock­ing and out­right rob­bery com­mit­ted by the pres­i­dent of Turkmenistan, his fam­i­ly, and his clos­est con­fi­dants. It doc­u­ments how the lead­er­ship of the coun­try — most­ly the pres­i­dent him­self — has robbed the pop­u­la­tion of the nation’s nat­ur­al resource wealth by using the mon­ey on van­i­ty projects and to amass colos­sal per­son­al wealth, most of which is held in bank accounts out­side of the country.

What makes this “klep­toc­ra­cy” worse than ordi­nary cor­rup­tion is that it occurs with the par­tic­i­pa­tion, or at least silent com­plic­i­ty, of the inter­na­tion­al com­mu­ni­ty. Corporations, such as Bouygues, Itera/Areti, Polimeks, and Calik Holding, and state-owned com­pa­nies, such as China National Petroleum Corporation, have long made their for­tunes in Turkmenistan, enter­tain­ing the delud­ed fan­tasies of President Berdymukhamedov and President Saparmurat Niyazov before him. Niyazov’s “spir­i­tu­al” book, the Ruhnama, was required read­ing for school chil­dren through­out Turkmenistan until recent­ly and has been trans­lat­ed into numer­ous west­ern lan­guages in exchange for cor­po­rate access to the coun­try. Corporate exec­u­tives present the pres­i­dent with per­son­al gifts, such as yachts and fan­cy cars. In return, their com­pa­nies are giv­en invest­ment oppor­tu­ni­ties in the country.

How is this all possible?

THE NEPOTISM THAT STRENGTHENS THE KLEPTOCRACY 

President Berdymukhamedov’s fam­i­ly con­trols most busi­ness inside Turkmenistan, with his sis­ters play­ing a key role in busi­ness ven­tures as diverse as jew­el­ry, con­struc­tion, tobac­co prod­ucts, tourism, and tex­tiles. As we have doc­u­ment­ed in the report, Berdymukhamedov’s fam­i­ly owns much of the lucra­tive busi­ness inside the coun­try, con­trol­ling enter­pris­es small and large. Their cor­rup­tion, how­ev­er, is not lim­it­ed to busi­ness ven­tures. Berdymukhamedov’s sis­ter, Gulnabat, is not only involved in con­struc­tion projects, such as the lucra­tive sea­side resort in Avaza and the build­ings for the fifth International Asian Indoor and Martial Arts Games that Turkmenistan host­ed in 2017, but has also tak­en con­trol of the International Red Crescent, using the char­i­ty as a mon­ey-mak­ing vehi­cle for her per­son­al ben­e­fit. Berdymukhamedov’s son, Serdar, is being groomed as a pos­si­ble suc­ces­sor to his father. He was appoint­ed deputy chair­man of the Cabinet of Ministers in February 2021, and is the chair­man of the Supreme Control Chamber of Turkmenistan, which allows him to over­see finan­cial flows.

In the cat­e­go­ry of most sur­re­al, a mem­ber of the Niyazov fam­i­ly (the first pres­i­dent of Turkmenistan) owned shares in Trockland, the com­pa­ny that owns the Berlin build­ing that hous­es the Checkpoint Charlie Museum. The memo­r­i­al to those who fought against Cold War era author­i­tar­i­an­ism will be joined by the apart­ments, shops, and Hard Rock Hotel that Trockland plans to build.

BANKS ARE HELPING TOO

It isn’t just cor­po­ra­tions that play along with Turkmenistan’s klep­to­crats, though. Deutsche Bank, Germany’s largest bank and one of the top finan­cial insti­tu­tions in the world, holds bank accounts for the Turkmen state, and, despite queries from Crude Accountability, has refused to pro­vide infor­ma­tion about why it con­ducts busi­ness with one of the world’s most bru­tal and repres­sive regimes. (See the report for the full response from Deutsche Bank.)

Until recent­ly, inter­na­tion­al finan­cial insti­tu­tions, includ­ing the World Bank, the International Monetary Fund, and the European Bank for Reconstruction and Development, have played along with Turkmenistan’s finan­cial fic­tion, pub­lish­ing eco­nom­ic sta­tis­tics, such as annu­al GDP in dol­lars and hydro­car­bon sec­tor export fig­ures from the Turkmen gov­ern­ment with­out crit­i­cal analy­sis of the data. According to 2015 sta­tis­tics, Turkmenistan’s for­eign reserves amount­ed to $35 bil­lion. This does not explain the country’s severe ongo­ing eco­nom­ic cri­sis in which basic con­sumer goods are hard to come by and the for­eign cur­ren­cy mar­ket has col­lapsed, and calls into ques­tion whether the mon­ey still exists.

THE KLEPTOCRACY’S TRAGIC IMPLICATIONS 

As the pres­i­dent and his fam­i­ly keep get­ting wealth­i­er, Turkmenistan’s ordi­nary cit­i­zens suf­fer in pover­ty. The offi­cial unem­ploy­ment rate is around 4%, but unof­fi­cial esti­mates place it as high as 60% in cer­tain parts of the coun­try. Although the gov­ern­ment has refused to acknowl­edge the pres­ence of COVID-19 in the coun­try, claim­ing that a pos­si­ble cause of infec­tion was tox­ic dust blow­ing from the Aral Sea, all cit­i­zens are required to be vac­ci­nat­ed. The bor­ders are vir­tu­al­ly closed. The  media, includ­ing the Internet, is com­plete­ly con­trolled by the state, and civ­il soci­ety has been dri­ven com­plete­ly under­ground or over­seas.

Hundreds of polit­i­cal pris­on­ers lan­guish in Turkmenistan’s prison sys­tem, many of them for­mer state offi­cials, found guilty of eco­nom­ic crimes that cur­rent high-lev­el bureau­crats in the gov­ern­ment appear guilty of them­selves. Others have been charged with eco­nom­ic crimes, Islamic extrem­ism, for engag­ing in civ­il soci­ety activ­i­ties, and for alleged­ly plot­ting to over­throw the pre­vi­ous pres­i­dent. A num­ber of these pris­on­ers have served their full sen­tences, and yet have not been released from prison in a gross vio­la­tion of their rights.

That Turkmenistan’s cit­i­zens live in iso­la­tion and under severe repres­sion is with­out a doubt. However, the elites — the klep­to­crats — run­ning the coun­try and rob­bing Turkmenistan’s cit­i­zens of its nat­ur­al wealth are any­thing but iso­lat­ed. They ben­e­fit from cor­rupt busi­ness, the inter­na­tion­al laws that allow them to prof­it from nat­ur­al resources, and mas­sive per­son­al wealth accu­mu­la­tion at the expense of ordi­nary Turkmen cit­i­zens. The web of klep­to­crats and enablers is inter­con­nect­ed, inter­na­tion­al, and inter­de­pen­dent. Without each oth­er, they can­not gath­er the wealth, influ­ence, and pow­er that they hold.

The real issue is: Will the klep­to­crats and their enablers ever be held account­able? Don’t hold your breath.

Kate Watters is co-founder and exec­u­tive direc­tor of Crude Accountability, a human rights and envi­ron­men­tal NGO that works with activists and com­mu­ni­ties impact­ed by oil and gas development. 

Tom Mayne is a free­lance researcher and writer from London. After grad­u­at­ing from Oxford University with a degree in Russian and Czech, he worked for 12 years as a senior cam­paign­er for Global Witness, an anti-cor­rup­tion NGO that works to end the exploita­tion of nat­ur­al resources. Since leav­ing Global Witness, he has con­tin­ued his research on the rul­ing fam­i­lies of Central Asian autoc­ra­cies, and cur­rent­ly holds a research fel­low­ship at the University of Exeter where he is research­ing mon­ey laun­der­ing in the UK real estate sector.

Inkstickmedia.Com by Kate Watters and Tom MayneDate