Expert Aronsky said that the state has large reserves for the implementation of this process.
Attracting investment into the national economy plays a very important role in creating high-tech industries, ensuring the domestic market with high-quality, in-demand products, and expanding the range of national exports. The relevant task is constantly in the spotlight of the leadership of Turkmenistan. Chairman of the Union of Economists of Turkmenistan, member of the Coordinating Council of the International Union of Economists, and a regular interviewee of CentralAsia.news Yury Aronsky spoke about the work of the state in the respective direction.
Instructions by Berdimuhamedov
On March 5, 2021, at a meeting of the Cabinet of Ministers of Turkmenistan, the head of the state Gurbanguly Berdimuhamedov instructed the government members to analyze the situation with attracting investments and «work out the issues of attracting as much investment as possible to the construction and industrial sectors, privatizing subordinate enterprises», as well as to take measures to improve the situation in this area.
Improving the investment climate
Investments, both external and internal, are a key factor in the development of the economy and raising the standard of living of its citizens. In recent years, Turkmenistan has done a huge work to attract the most advanced technologies and foreign investments in the national economy.
For these purposes, constant, systematic work to improve the business environment is carried out, the legislative and legal framework is improved, statistical and tax reporting has been reduced. Such measures on improving the investment climate contribute to the growth of attracted foreign direct investment in the national economy even in the context of economic crises.
Projects with the participation of foreign partners
There are many examples when Turkmen representatives and foreign partners have implemented numerous investment projects aimed at creating high-tech industries that make products competitive in foreign markets.
These are the world’s first plant for the industrial production of synthetic liquid fuel by processing natural gas in Akhal province commissioned in 2019, a gas chemical complex in Mary, the largest plant in Central Asia — the Garabogazkarbamid plant, metallurgical, cement, and aerated concrete plants, the Türkmenaýnaönümleri plant, the organization of full-scale production of modern textile equipment and much more.
Today thanks to macroeconomic stability, energy independence, large reserves of natural resources, developed transport and logistics infrastructure, enterprises in Turkmenistan have wide opportunities to enter the largest and most dynamically developing markets of Asian states, the CIS, and European countries.
Stock Exchange
It is difficult to maintain a high level of investment only at the expense of state investments in a market economy, and, probably, it is inappropriate. It should be noted that today in Turkmenistan there are large reserves for attracting investments both by further attracting foreign companies and the country’s population and not only in the oil and gas sector but also in several other sectors of the economy.
It seems that it is possible to achieve a further significant increase in the flow of investments using the mechanisms of the stock exchange. Now the country has all the necessary legislative and regulatory acts to carry out such work. These are the Law «On Securities and Stock Exchanges of Turkmenistan», the Law of Turkmenistan «On Foreign Investments», several other normative acts, as well as the «State Program for the Development of the Banking System of Turkmenistan for 2011-2030, Formation of the Securities Market and Improvement of the Country’s Financial System.
JSC «Ashgabat Stock Exchange» was established in 2016. So far, the stock exchange has been mainly engaged in trading within government bonds, the issue of which has been established since 2015, but, in my opinion, its great potential in attracting investments and improving the efficiency of the stock market has yet to be realized.
It is necessary to carry out serious preliminary work to improve the attractiveness of these enterprises and companies to create conditions for investors, both foreign and domestic ones who would be able to willingly invest in the development of innovative businesses and start-ups. These opportunities for attracting funds for the development of state, private and state-private enterprises from various sectors of the country’s economy through the mechanisms of the stock exchange are not used fully enough.
For the stock exchange to operate at full capacity, it is necessary first to carry out work on the business assessment of all enterprises that need development and investment, then to corporatize them and enter the stock exchange with an initial assessment. And then market mechanisms will work and those enterprises that achieve good economic results today or show potential buyers of shares and other securities a great perspective in various innovative areas of development, will attract new shareholders and thus the necessary additional funds for their development.
Investment attractiveness of enterprises
As noted above, the strategy of the country’s investment attractiveness is already successfully implemented, then the possibilities of private business in this area are still poorly represented. In the modern world, private enterprises operate in a tough competitive environment. For sustainable development, an enterprise needs to constantly develop, quickly adapt to changing environmental conditions, offering on the market a modern, high-quality product or service that satisfies the consumer. Constant development requires regular investments both in fixed assets and scientific and technical development and for other purposes aimed at obtaining a positive effect. And to receive investments, an enterprise needs to constantly monitor its investment attractiveness.
The attraction of investments in the stock market and the search for a strategic investor require open reporting from the enterprise, control over financial flows, and business transparency. The higher the investment attractiveness of the enterprise is, the more likely it is to receive the necessary investments.
In the context of several world economic crises in recent years, the share of foreign investment in the economy has slightly decreased for objective reasons. Therefore, the task set before the government to find ways to increase investment in the national economy is very urgent today. And here, in the entry of a business through corporatization procedures on the stock exchange, attracting funds from both foreign and local capital, as well as from the population of the country, we see great potential for the progressive development of the national economy.