Turkmenistan: Birthday boy

What birthday gift to get for the person who has everything?

In Turkmenistan, the only option is an entire city. 

This June 29 will see the official opening of Arkadag, a brand-new city that has been built at the behest of self-styled National Leader Gurbanguly Berdimuhamedov. That date also marks the day on which the former president turns 66.

This entire exercise is cult construction on a dizzying scale. The very name Arkadag has been chosen because that is the honorific – meaning patron in Turkmen – by which Berdimuhamedov is known. Crowds are required to endlessly chant the name whenever he turns up to a public event. No festivity or governing business can be completed without somebody invoking the greatness of Arkadag.

Arkadag the city, meanwhile, is still a work in progress. The first of two planned stages has now been completed, though, following delays caused by mounting costs and difficulty in sourcing materials.

The official tally of work done includes the construction of 336 “modern buildings,” including homes, government offices, schools, theatres, clinics and sports halls.

In March, Agence France-Presse (AFP) news agency reported, citing an official in charge of the committee managing construction, that the first phase of building Arkadag would end up costing $3.3bn.

"The second phase will cost about $1.5 billion, according to our estimates," the official was quoted as saying. 

Once the second phase is completed, Arkadag will sit on a relatively compact 10-square-kilometre parcel of land around 30 kilometres from the capital, Ashgabat, and become home to around 73,000 people. 

The hard sell that Turkmen authorities are making for Arkadag is that it is a “smart city.”

This means any number of things. Bulletins on the progress of Arkadag highlight how the city will be equipped with environmentally friendly public transport, “smart parking” and all manner of digital solutions for modern living. 

Berdimuhamedov has inspected every last detail in an obsessively and likely counterproductively micro-managerial fashion. In a typical case of this from earlier this month, he went to check in person on the state of the fleet of electric-powered buses and taxis that will eventually fill Arkadag’s roads. Officials informed him among other things about the times and routes of the public buses. He even took time to examine a lavishly assembled bus stop.

Inevitably, Berdimuhamedov was asked to take one of the electric cars on a test spin. 

“While skillfully driving the electric car, the National Leader of the Turkmen people … assessed its technical characteristics,” state media cooed. 

Other times, Berdimuhamedov’s inspections have extended to checking on the proper functioning of traffic lights.

The dream is for Arkadag to pay for itself.

On June 16, President Serdar Berdimuhamedov, the former president’s son, issued a decree ordering the construction of facilities for the production of food, industrial, pharmaceutical and medical goods in the city in the period from 2023 to 2026. International companies are being invited to set up shop to achieve that goal.

On the same day, Berdimuhamedov the younger ordered the construction of Arkadag’s own seismic station, which feels perhaps a little late in the day.

Turkmenistan has for now only its vast natural gas reserves with which to pay for all this. And few other customers than China. 

Myrat Archayev, deputy chairman of state-owned gas monopoly Turkmengaz, offered a reminder of just how strong that dependence is while speaking at an energy conference in Ashgabat on June 15.  

"The three lines of the Turkmenistan-Uzbekistan-Kazakhstan-China transnational gas pipeline put into operation in December 2009 supply about 40 billion cubic metres of natural gas per year," Archayev was quoted as saying by TASS news agency. “In future, the annual volume of supplies of Turkmen natural gas to China will be increased to 65 billion cubic metres.”

As of the start of this year, more than 350bn cubic metres of gas have been pumped through this pipeline since it started working.

In other business from the same Ashgabat conference, Bairammyrat Pirniyazov, head of Turkmengaz’s Natural Gas Research Institute, said that Turkmenistan is seeking partners with which to build underground gas storage facilities.

“Since Turkmenistan is a guarantor of energy security in the entire Central Asian region, it is clear that underground gas storage facilities are needed to ensure the stability of gas supplies,” Pirniyazov told the conference. 

The idea of building the country’s first underground gas storage facility has been in circulation since January, when it was brought up at a Cabinet meeting by the then-deputy prime minister with the portfolio for oil and gas sector affairs, Shakhym Abdrakhmanov.

Underground gas storage is an area in which Hungary has particularly rich experience, so it is probable that companies there have already been solicited for their services and that this subject received some attention when Prime Minister Viktor Orban was in Ashgabat earlier this month.

In an important vindication for Turkmenistan, a tribunal at the Washington-headquartered International Center for Settlement of Investment Disputes has ruled in favor of Ashgabat in its long-standing squabble with Russian telecoms company MTS over a cellular services provision contract that expired without renewal in 2017.

The background was summarised neatly by Squire Patton Boggs, the Ohio-based legal firm that represented Turkmenistan and that is now understandably performing victory laps.

“MTS argued … that Turkmenistan’s refusal to extend the contract constituted an expropriation of MTS’ operations in breach of the Russia-Turkmenistan [bilateral investment treaties],” the firm said in its statement. “MTS also claimed that Turkmenistan failed to afford fair and equitable treatment, non-discriminatory treatment, and full protection and security during the term of its 2012-2017 contract.”

MTS had been seeking $2bn in damages. Its arguments were rejected, however, and the tribunal “found that Turkmenistan had not engaged in any wrongful conduct with respect to MTS’ operations.” The ICSID tribunal further concluded that MTS should pay $11mn in legal fees and arbitration costs.

Akhal-Teke is a weekly Eurasianet column compiling news and analysis from Turkmenistan.

The column originally appeared on Eurasianet here.