President Closes “Turkmenbashi Fund”

11-Jul-07

President Gurbanguly Berdymuhammedov is to release billions of dollars held in an off-budget account by his predecessor Saparmurat Niazov. NBCentralAsia experts say this is his chance to win people’s trust by ensuring the process is transparent and spending the money on social programmes.

In late June, Berdymuhammedov decided to shut down Niazov’s International Fund and set up a liquidation commission to review past transactions on the account and draft proposals on where the money should go.

Niazov set up the fund in 1993, ostensibly to finance humanitarian activities, but it has always been shrouded in secrecy. There are no official figures on how much is held in the account, although independent experts say it is worth several billion dollars.

According to various reports, the money included export revenues for gas and cotton, foreign investments earmarked for major construction projects, and private donations from Arab sheikhs in the Gulf.

Niazov - who was also known as Turkmenbashi - personally controlled disbursements from the fund, which included gifts for members of the Halk Maslahaty, Turkmenistan’s 2,500 seat supreme legislature, money distributed to children at mass public events, and awards for bright schoolchildren.

An NBCentralAsia economic expert describes the fund as a “black hole”, saying the lack of a founding charter or financial statements showing what money was going in and out of the account made people suspicious of it.

“The new leadership [is trying] to get rid of this unnecessary structure as quickly as possible because Berdymuhammedov doesn’t want his name linked with the dubious past,” said the expert.

He said Berdymuhammedov would win people’s trust if he placed the money in the government budget, although he said this would take at least six months because of the need to audit the account.

Other NBCentralAsia commentators agree, saying that once the fund is liquidated, the authorities could transfer the money to the treasury and use it to support social programmes.

“The money could be used to fulfill the [election] pledges that Berdymuhammedov made to the people. After all, many of us are still wondering where the money [for reforms] is to come from,” said a commentator based in Ashgabat.

During his election campaign in January, Berdymuhammedov promised to carry out broad education, healthcare and pension reforms.

Of thing NBCentralAsia’s commentators are certain – the decision what to do with the money rests with Berdymuhammedov himself. It is highly improbable that the liquidation commission would dare to offer him any advice on the matter.

(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)