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During the soviet period, Turkmen SSR was the source of raw materials (mainly cotton and energy resources), which where transferred to other countries of the Soviet Union for further processing.

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Introduction

During the soviet period, Turkmen SSR was the source of raw materials (mainly cotton and energy resources), which where transferred to other countries of the Soviet Union for further processing. Till the end of 1991 Turkmenistan never made trade with other countries on its own. In the middle of nineties government activated foreign-economic activity with the purpose of bargaining and organizing joint ventures with foreign companies in such sectors like light and food industry, exploring and developing energetic resources. Economic changes in Turkmenistan followed immediately after the country became independent. In 1994 inflation exceeded 2400% , and GNP in the same period descended on 50%. Only in 1995 began to make a temperate reforms on "perestroyka" and development of economy. As a result inflation degree was descended to 100 % in year, however pegged manta (Turkmen currency) and various difficulties for foreign investors and credit organizations (World Bank, ICF) lead to further economic recession in 1998. Scarce privatization was made in the republic, mainly in service sphere. Industry, agriculture, energetic sector, transport and communication are in the hands of government. As a result many state services keep are free of charge and depends of subsidies. In 1991 labor resources make up 1,9 mil. people, 0,3 mil. of them the unemployed. ...read more.

Middle

In 1980 ties Turkmenistan was producing 1.3 mln. tons of cotton. Almost quarter , where of higher quality types. Nowadays cotton is partially replaced with the grain, which results not only the increase in supplying the country with provision , but also brings the country to use its water resources more rationally. Instead of different plans on giving the land to the private farmers, the agriculture is still staying in the government sector. The important role is given to the animal husbandry - rearing "caracul" sheep, fine-fleeced goats , camels and horses. The main part of animal husbandry is taken by the traditional sheep breeding(approximately 30% of gross product of this sector of agriculture). Structural Reforms During the last five years, Turkmenistan's progress with the implementation of structural reforms and the transformation to a market economy has been very limited. Only a small number of state enterprises have been privatized and their importance for the economy as whole is limited. Some progress in legal reform was made in recent years, such as the introduction of a bankruptcy law, but the regulatory framework still lacks transparency and laws and regulation are often conflicting. Similarly land reforms and agricultural reforms are yet to take off. Privatization of Enterprises. The authorities approach toward privatization has deeply stressed the need for a gradual evolution of private ownership; the importance of avoiding quick economic changes ; and more deeply , the desirability of leaving of key economic sectors under government control. ...read more.

Conclusion

In most cases, they have been based on official book values and have failed to take into account facts such as the period of the firms technology, the overall situation of the machinery and equipment, the potential market for production and inventories, the likelihood for collecting outstanding claims on other parties, and potential liabilities that do not appear on the firms' balance sheet. Restrictions imposed on buyers have further decreased the attractiveness of enterprises offered for sale. Such restrictions have included requirements such as maintaining the business profile for a number of years or retaining a certain number of employees. In the case of larger enterprises, the government has generally retained a controlling equity share in the enterprise. With several competing agencies involved in the privatization process, including interference by line ministries and local governments, procedures governing the selection, and valuation of state property have lacked transparency and consistency. Also, arbitrary cancellations of tenders and auction have undermined investor confidence. In addition, quickness in the financial and regulatory infrastructure, in general, and the lack of post privatization support have further delayed privatization. Progress with privatization was the subject of a privatization seminar held by the authorities in early 1999 in cooperation with United States Agency for International Development. Based on the conclusions from these discussions the President has ordered the development of annual implementation programs (starting in 2000 and extending through 2005) In which the line ministries would nominate enterprises suitable for privatization. ...read more.

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