The country possesses the world’s fourth largest reserves of natural gas and substantial oil resources.
Turkmenistan has taken a cautious approach to economic reform, hoping to use gas and cotton sales to sustain its economy. In 2014, the unemployment rate was estimated to be 11%.
Between 1998 and 2002, Turkmenistan suffered from the continued lack of adequate export routes for natural gas and from obligations on extensive short-term external debt. At the same time, however, the value of total exports rose sharply due to increases in international oil and gas prices. The subsequent collapse of both hydrocarbon and cotton prices in 2014 cut revenues from export sales severely, causing Turkmenistan to run trade deficits from 2015 through 2017. Economic prospects in the near future are discouraging because of widespread internal poverty and the burden of foreign debt, coupled with continued low hydrocarbon prices and reduced Chinese purchases of natural gas. One reflection of economic stress is the black-market exchange rate for the Turkmen manat, which though officially set at 3.5 manat to the U.S. dollar, reportedly was trading in January 2021 at 32 manat to the dollar.
President Niyazov spent much of the country’s revenue on extensively renovating cities, Ashgabat in particular. Corruption watchdogs voiced particular concern over the management of Turkmenistan’s currency reserves, most of which are held in off-budget funds such as the Foreign Exchange Reserve Fund in the Deutsche Bank in Frankfurt, according to a report released in April 2006 by London-based non-governmental organization Global Witness.
According to a decree of the Peoples’ Council of 14 August 2003, electricity, natural gas, water and salt were to have been subsidized for citizens until 2030. Under implementing regulations, every citizen was entitled to 35 kilowatt hours of electricity and 50 cubic meters of natural gas each month. The state also provided 250 liters (66 gallons) of water per day. As of 1 January 2019, however, all such subsidies were abolished, and payment for utilities was implemented.