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Turkmen cost-cutting may encourage thrift

Thursday, August 3, 2017

Subject

The Turkmen government's attempt to curb spending.

Significance

A sharp curtailment in the subsidies on which Turkmenistan's leadership once prided itself reflects a new drive to rationalise spending as hydrocarbons revenues fail to support previous levels of budget spending. There is no sign yet that the government is switching off state funding for prestige projects.

Impacts

  • The government cannot afford lavish infrastructure projects but will at least complete those now under way.
  • Ministers and other officials will be sacked on a regular basis and blamed for economic failures.
  • China will ensure that it pays the minimum for the Turkmen gas it buys.
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