To get a clear understanding of the economic situation in Central Asian countries and adequately assess your prospects for business cooperation there, you must take a number of factors into account.
Despite the fact that Central Asian countries share a regional history and culture, they have different levels of social and economic development. Therefore it is often difficult for business partners from elsewhere to adequately assess the countries’ economic environments and make the right strategic business decisions.
Most of the countries’ state institutions are at various levels of development. Turkmenistan is a "mysterious" post-Soviet country whose leadership sought to isolate it from the outside world in the 90s. Rich in mineral resources, Turkmenistan’s economy relies primarily the export of oil and gas, sulfur and other mineral fertilizers, and cotton. Its main trading partners are China, Turkey, and India. Its primary imports are industrial equipment, chemicals, food, and consumer goods from Russia, China, Turkey, Ukraine, and Germany.
According to international analysts like Argus, the market for mineral fertilizers – in particular sulfur – is in decline. Interest in such goods from Turkmenistan is now reduced due to the high cost of logistics via the Black Sea.
Traditionally, significant cargo export flows to India and elsewhere have passed through the Iranian port of Bender Abbas. From an economic point of view, the weak Iranian rial made this the cheapest option. This route is no longer feasible after tightened sanctions against Iran created difficulties for traders to receive payments.
European traders invariably chose a route via the Black Sea. In 2018, despite Turkmenistan's insular economic environment, the AsstrA international corporate group implemented a project there for the purchase of granular sulfur for subsequent export through the Georgian port of Poti.
“Export dates, rolling stock quality, and price are all factors affecting the final price of the product. In Turkmenistan, railway cars are state property. To secure the required amount of rolling stock and to ensure the on-time receipt of the goods, we needed to have our people on the ground. In such a business environment, it matters which partners you have in place and how much you trust them. Success required the close coordination between our AsstrA team, the client, and our partners in Turkmenistan,” says Svetlana Palkina, Head of the AsstrA Oil&Gas and Fertilizers Logistics division.
From 2015-2016, AsstrA also had successful experience supporting the purchase of urea in Turkmenistan. Traders chose to work with us to minimize logistics risks and make sure the cargo was ready for further sale at the port.
“While it is not easy to obtain an entry visa for Turkmenistan, in October 2018 I was lucky to be able to see the Turkmenbashi port’s infrastructure firsthand. The quality of the port’s equipment and warehouses is impressive,” shares Oleg Sysolyatin, Head of General Cargo Transportation at AsstrA.
“At the time of my visit, the functional capacity of the port was negligible. In my opinion, this was due to the country's inward looking economic policies. Of course, this makes it difficult to develop international trade and business ties.”