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EBRD adopts new country strategy for Turkmenistan
The Board of Directors of the European Bank for Reconstruction and Development
has adopted a new country strategy
for Turkmenistan which continues to restrict activities to the private
sector because of lack of progress in the implementation of political and
economic reforms.
The main reform challenges, formulated in the country strategy two years ago,
remain valid as the situation in the country has not significantly changed
either politically or economically. Turkmenistan is still a one-party state
dominated by President Niyazov, without any independent media or freedom of
speech and with a very poor human rights record. Continued failure to make
progress towards multi-party democracy, pluralism and a market economy
excludes any funding of public sector projects and focuses its activities on
financing small and medium-sized enterprises (SMEs) and micro-finance areas,
provided that the proposed investments are not effectively controlled by the
state and government officials will not personally benefit from such
investments
The Bank does, however, aim to maintain a dialogue with Government and civil
society on ways to improve the investment climate for private entrepreneurs,
thus aiming at encouraging stronger political and economic reform.
As in the past, the Bank will continue to employ a number of benchmarks in
gauging political and economic progress. These benchmarks are explicitly
described in the country strategy and respective operational priorities.
The Bank strongly urges the authorities of Turkmenistan to implement necessary
reforms for the benefit of the Turkmen people. The EBRD requires that its
countries of operations apply the principles of multi-party democracy,
pluralism and market economics. When Turkmenistan joined the Bank in 1992, it
accepted this requirement, as laid down in Article 1 of the Agreement
Establishing the Bank.
According to official government data, economic output grew by 17 per cent and
21 per cent in 2004 and 2005 respectively, largely due to hydrocarbon exports
and public investment programmes.
Since 1994 the Bank has signed 8 projects for total commitment of €121.4
million. The Bank together with the Swiss Government invested €1.2 million in
2003 and provided a further equity funding of €0.75 million in 2006 in a wool
scouring plant under its Direct Investment Facility (DIF).
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