Expert Yuri Aronsky noted that savings in the GDP, investments and industrial development played an important role in this direction.
The coronavirus pandemic has caused direct damage to the economies of many countries — through the morbidity and mortality of people, and also indirectly — through quarantine restrictions in certain sectors. The authorities of Turkmenistan were farsighted enough to take timely measures to compensate the negative impact of the pandemic on the national economy.
Yuri Aronsky, Chairman of the Union of Economists of Turkmenistan, member of the Coordination Council of the International Union of Economists, told CentralAsia.news how the government managed to maintain the stability of the economy in the country.
High share of savings in GDP
Since Turkmenistan has become an independent country, it followed the principle of the high share of savings in the GDP. Such a policy is inherent in developing countries, which, according to their income, can allow realizing such an investment policy. Diversifying the economy, reducing dependence on the oil and gas sector, give the national economy a certain stability, the ability to move from a resource economy to an industrial resource one, but at the same time requires significant funds to create not only new individual enterprises, but also whole industries such as the textile industry, agro-industrial complex and other important areas of development.
The disadvantage of a policy with a high share of savings in the GDP is that a number of funds could be used today to improve the well-being of the population, but accumulations play a crucial role for the prospects for the successful development of the country. Such economic policy also constantly maintains fairly high rates of GDP growth. And that is why, amid conditions of economic crises, Turkmenistan manages to achieve a certain sustainability of development and economic growth.
Economic growth forecasts
Now there are a number of discussions about the final indicators of the growth rates of the national economy. Many international financial institutions give their values for these indicators at the end of 2020. I would like to point out that these organizations employ teams of very qualified and experienced macroeconomists. But their lack of direct access to primary statistical data forces them to use forecast estimates or look for analogues in other countries.
Economic forecasts are good but extremely unreliable. I can only remind you that most international structures predicted a rapid recovery of the global economy from the collapse caused by the pandemic in 2021. And today they are forced to change many of their forecasts based on realities and, according to our estimates, the world will need another 2-3 years to fully recover the economy.
Negative situations amid the pandemic
Of course, the global crisis amid the coronavirus pandemic has caused many negative situations in Turkmenistan as well. Some of the industries, such as tourism, transport, primarily air one, and some others, have suffered serious financial losses.
A significant decrease in demand in value terms and prices for gas and oil during several months of last year also played a negative role and caused certain currency restrictions.
Compensation of the negative impact
About 38 billion US dollars of new investments, the creation of more than 12 thousand new jobs in 2020, as well as the fact that industrial production in the country did not stop, widely reduced the negative problems in the economy amid the coronavirus pandemic. The outstripping development of the private sector and its growth rates above the national average also played a significant role.
The ongoing digitalization of all spheres of the economy and the life of society, which increases the efficiency, competitiveness and investment attractiveness of many industries and infrastructure facilities, has also made an important contribution the relevant direction.
Full transition to the market economy
There is still a lot to be done in the economy of Turkmenistan in order to realize a full-fledged transition to the market economy. In my opinion, it is, first of all, a business assessment of all state and private enterprises, their corporatization and entry into the national stock exchange, a smooth transition from a fixed to a floating exchange rate, equal access to foreign exchange resources both for enterprises of all forms of ownership and for the population. I would like to note that many of these issues are already at the phase of study and practical implementation.
Today, socio-economic growth, reserves of natural resources, the work of the country in conditions of peace and stability, provide an opportunity to optimistically assess further steps in the development of the national economy.
CentralAsia.news editorial office reminds that earlier, the observer of the economy of Turkmenistan Valentin Trapeznikov noted that Turkmenistan showed an active dynamics of industrial development in 2020. According to him, excellent results have been demonstrated in the industrial sector. According to the results of 12 months of last year, the share of industry in GDP was 27,8%.
On January 16, this year Aronsky pointed out the economic phenomenality of Turkmenistan in the crisis year. The expert explained that the local authorities managed not to get bogged down in the «swamp» of the crisis due to the high share of investments in the gross product and the creation of modern high-tech industries.