The 5th Asian Indoor Games turn into heavy burden for Turkmenistan

Turkmenistan is preparing for the 5th Asian Indoor Games to be held on September 17-27 in Ashgabat. Yet, the country has no funds for such a large-scale event.

On May 15, President Gurbanguly Berdymukhamedov reprimanded Finance Minister Mukhammetguly Mukhamedov and Minister of Healthcare and Medical Industry Nurmukhammet Amannepesov “for poor performance,” more precisely, for “failing to collect funds to the budget.” A few days earlier, Prosecutor General Amanmyrat Khallyev was detained along with some 50 not so high-ranking officials of the interior ministry and other departments. They are accused of pocketing the money provided for organization of the Asian Indoor Games. Turkmenistan has become the first country in Central Asia to receive the right to hold Indoor Games. To recap, Ashgabat was chosen as the host city of The Asian Indoor and Martial Arts Games following the agreement signed by Olympic Council of Asia (OCA) and National Committee of Turkmenistan in Kuwait on 19 December 2010. The document was inked by OCA President Ahmad al-Fahad al-Sabah and members of the Turkmen delegation. Since then, Turkmenistan consolidated all its resources to build facilities for Olympic Games. The country has spent already $8 billion, including more than $5 billion on construction of the Olympic Village and $2,3 billion on a new international airport that needs repair already. International Partnership for Human Rights (IPHR) reports that residential buildings were demolished as part of preparations and the residents were resettled and provided with much worse housing. Civil servants were forced to pay part of their salaries to cover the budgetary expenditures on the Asian Indoor Games – President of Turkmenistan is proud of the upcoming event, as he personally wrote the anthem of the Games.

It is hard to say if Ashgabat would undertake such commitments in 2010, if it could foresee reduction of energy resources prices. It would hardly do that, of course, since the country’s budget depends on sale of hydrocarbons by 100%. The threefold decline of oil prices has affected Turkmenistan’s economy critically, since the country received dividends from sale of oil not gas. It appears that the country’s leadership will have to correct the tactical and strategic plans of economic and social-and-political development for years to come.

“Turkmenistan’s economy is experiencing serious losses from falling prices of energy resources during the last 1.5-year. Therefore, like other exporter-countries, it is facing difficulties. On the other hand, the economy structure and diversification level does not allow Turkmenistan to continue its policy of high expenditures. That is why, the country is experiencing serious difficulties with preparation for the 5th Asian Indoor Games,” says Aza Mihranyan, Doctor of Economic Studies, senior research fellow at Institute of Economy, Armenian Academy of Sciences.

Incomes from gas trade with China are used to serve the loans taken earlier. Gas trade with Iran has always been based on barters and was stopped this January. Turkmenistan demands repayment of a $32-billion debt, while Tehran denies it. In particular, Central Bank has introduced restrictions on foreign exchange sale by local companies and population. In fact, the country has faced deficit of butter, sugar and other essential foodstuffs. As a result, the government had to waive the ban for suppliers.

According to local sources, they can buy currency only at commercial banks, though their access to foreign exchange resources has been certainly limited too.

Later, the government established control over bank operations of citizens outside and inside the country. Then, the government set a daily limit to non-cash foreign exchange payments. Online payments with international plastic cards were suspended fully, and restrictions were introduced on cash-out of salaries, pensions, social benefits. The government suggested shifting to non-cash payments and bound all retailers to acquire the necessary equipment. Experts forecast hungry strikes in the country soon. However, all these drastic measures are a drop in a bucket. The government is still short of money.

Witnesses say the situation is so dramatic that Berdymukhamedov personally appealed to big businesspersons for donations for the Asian Indoor Games 2017. The president charged Prosecutor General Amanmyrat Khallyev and Interior Minister Iskander Mulikov to collect money from government officials and businesspersons. They have collected an estimated $15 million, which proved insufficient and the president charged the National Security Service to launch an official investigation.

Chairman of the Supreme Court Begench Charyev presented the investigation result at the government session that is traditionally broadcasted on the public television. He reported large-scale embezzlements, including money, jewelry, and luxurious real estate. As a result, employees of the Prosecutor’s Office and Interior Ministry, heads of oil and gas enterprises, construction companies and others were arrested. All them pled guilty and faced long years in prison. “The misappropriated money and property were confiscated and transferred to the state,” the Turkmen television reported.

Addressing the government, President Berdymukhamedov did not specify if the confiscated funds are enough for the Games, he just urged anti-corruption measures. He thinks that cancelling amnesty for the persons caught on bribery may help fighting corruption. Observers say the president’s severe reprimands of the recent days may lead to more large-scale arrests in Turkmenistan.

EADaily’s Central Asian Bureau