Turkmenistan Trade and Foreign Investment

By | July 24, 2022


  • Business Relationships
  • Foreign direct investment
  • FTAs ​​and Treaties
  • Development Cooperation
  • Prospective fields of study (MOP)

Business relations

Trade relations with the EU

Exports from EU countries to Turkmenistan almost halved in 2018, relatively low figures remained even during the pandemic period, but 2021 shows an increase to “pre-covid” values. Turkmenistan has a long-term negative trade balance with the EU, which means that exports from EU countries outweigh imports from Turkmenistan to the EU. In 2021, Turkmenistan was the EU’s 105th most important trading partner. For Turkmenistan, the EU27 was in first place in 2021 in terms of imports, in third place according to export statistics. According to the total turnover, the EU is the third most important trading partner of Turkmenistan. The EU mainly imports mineral fuels and chemicals from Turkmenistan, while it imports machinery and equipment for various sectors.

2017 2018 2019 2020 2021
Exports from the EU (million EUR) 850.2 437.1 554.9 505.8 837.9
Imports into the EU (million EUR) 229.9 214.4 375.3 249.9 517.1
Balance with the EU (million EUR) -620.3 -222.7 -179.6 -255.8 -320.8

Source: European Commission

Trade relations with the Czech Republic

The foreign trade of the Czech Republic with Turkmenistan is at a very low level, but it has great potential. Exports from the Czech Republic to Turkmenistan have long prevailed over imports. In 2021, there was an increase in Czech exports to the value of CZK 0.3 billion, mainly data processing units, agricultural machinery and medical equipment were exported. Imports from Turkmenistan in 2021 were around 1 million CZK and mainly included cotton yarn and textiles. The Czech Republic has maintained a positive trade balance with TM for the past several years.

2017 2018 2019 2020 2021
Exports from the Czech Republic (billion CZK) 0 0.1 0.2 0.2 0.3
Imports to the Czech Republic (billion CZK) 0.5 0 0 0 0
Balance with the Czech Republic (billion CZK) 0.5 -0.1 -0.2 -0.2 -0.3

Source: businesscarriers.com

Trade relations with countries outside the EU

Trade with countries outside the EU is key for Turkmenistan, which is due to its geographical location, historical ties, and geopolitical interests. logistics routes and other factors. The main partner is China, where Turkmenistan supplies natural gas, which is the most important item of Turkmenistan’s export. In second place in terms of total turnover is Turkey, followed by the EU and other Central Asian countries. The positive balance of Turkmenistan’s trade with countries outside the EU is mainly due to the export of natural gas to China.

2017 2018 2019 2020 2021
Exports from countries outside the EU (million EUR) 6,052.1 7,859.1 8,403.7 5,057.1 6,824.0
Imports to countries outside the EU (million EUR) 3,225.7 1,816.7 2 170.1 2,505.7 2,857.0
Balance with non-EU countries (million EUR) 2,826.4 6,042.3 6,233.6 2,551.4 3,967.0

Source: EIU, Eurostat

Foreign direct investment

Data on foreign direct investments are very limited, in recent years investments have been around USD 2 billion, most of them directed to the oil and gas extraction sector, then to the transport sector and metal mining. The main investors include companies from China, Turkey and Japan. Due to its mineral wealth, Turkmenistan is an attractive territory for investors, but unfortunately it is very risky in terms of the closedness of the country, enormous corruption, bureaucracy, poor law enforcement, etc.

We do not register any Czech investments in Turkmenistan.

FTAs and treaties

Treaties with the EU

Bilateral relations between Turkmenistan and the European Union are governed by the Interim Agreement on Trade and Trade-Related Matters (entered into force in August 2010), the validity of which should be terminated by the ratification of the Partnership and Cooperation Agreement (PCA) in the individual Member States of the EU and finally by the European by parliament. As part of the agreement, annual bilateral joint committee meetings are held to discuss key aspects of EU-TM relations. The agreement covers a wide range of issues such as trade, economy, implementation of the EU strategy for SA, political and economic development.

The EU-Turkmenistan Memorandum of Understanding on Energy Cooperation facilitates the exchange of information on energy policies, the diversification of transit routes and the promotion of renewable energy sources and energy efficiency. The last meeting under this memorandum took place in Ashgabat on 24 October 2019.

Contracts with the Czech Republic

Agreement between the Czech Republic and Turkmenistan on the avoidance of double taxation and the prevention of tax evasion in the field of income and property taxes dated 18 March 2016

Protocol on cooperation between the Ministry of Industry and Trade of the Czech Republic and the Ministry of Economy and Finance of Turkmenistan dated September 9, 1993

Developmental cooperation

The EU and member states have allocated EUR 123 million for Central Asia. In July 2020, the EU launched a €3 million comprehensive solidarity program in response to the COVID-19 crisis in Central Asia, with a primary focus on Kazakhstan and Turkmenistan. The program, implemented by the World Health Organization, provides support for two years to mitigate the effects of the pandemic and will contribute to the longer-term resilience of national health systems.

The EU’s Development Cooperation Instrument (DCI) provides funding for development in the country. In this context, bilateral cooperation projects focus on economic reforms and privatization, education and capacity building, good governance and the rule of law, and sustainable energy. In 2014-2020, bilateral EU aid was focused on education and training (€37 million for 2014-17). The EU and Turkmenistan also work together in a regional approach that includes all five Central Asian republics. Regional cooperation projects focus on education, the rule of law, water and environment, border management, the fight against drug trafficking, private sector development, investment promotion, competitiveness and trade in Central Asia and other areas.

In 2019, a contract was signed with the International Trade Center (ITC) on the inclusion of Turkmenistan in the Ready4Trade program worth EUR 15.0 million for the period 2020-2023. It is an EU-funded program aimed at promoting investment, competitiveness and trade in Central Asia, which aims to contribute to sustainable and inclusive economic development in the region. The project is implemented by ITC in close cooperation with national partners.

Prospective fields of study (MOP)

Turkmenistan is not included in the ILO for the current period.

Turkmenistan Trade