Ashgabat’s Strategic Play: Russia Deals & Western Horizons Unfold

Turkmenistan and Russia recently concluded their 13th Intergovernmental Commission meeting in Ashgabat, solidifying agreements on humanitarian and logistical cooperation. Key outcomes included plans for a new Pushkin School building in the Turkmen capital by 2027 and joint efforts on the ambitious North-South transport corridor. The meeting, co-chaired by Russian Deputy Prime Minister Marat Khusnullin and Turkmenistan’s Deputy Cabinet Chairman Nokerquly Atagulyyev, aimed at expanding mutually beneficial engagement between the two nations.

Khusnullin’s visit to Ashgabat, spanning October 13-15, was marked by a series of high-level engagements, including a meeting with Turkmen President Serdar Berdymukhamedov. President Berdymukhamedov underscored the strategic importance of the partnership with Russia, expressing confidence that the talks would inject new momentum into their collaboration. Reflecting this, Khusnullin reported a robust 30% increase in trade turnover within the first seven months of the current year, surpassing $1.2 billion, with Russia eyeing increased imports of Turkmen agricultural produce, particularly tomatoes.

The economic ties extend beyond agriculture, with Russia boosting exports of machinery, pipeline products, and satellite communication equipment to Turkmenistan. Joint telecommunication projects are also on the horizon, as Russian companies like KamAZ and various marketplaces explore further opportunities. For its part, Turkmenistan views the Russian market as a priority for both exports and imports, expressing keen interest in Russian industrial, digital, agricultural, and educational technologies. The commission’s extensive work also facilitated direct talks between the administrations of Ashgabat and St. Petersburg.

To further stimulate trade, a crucial agreement for a “Simplified Customs Corridor” was signed between the customs services of both countries. This mechanism is designed to streamline declaration and release processes, significantly reducing transit times for goods. Such facilitation is deemed critical for the efficient operation and development of the International North-South Transport Corridor, where both Russia and Turkmenistan play pivotal roles.

Political analyst Derya Karaev, commenting on these developments, noted the positive sentiment surrounding these agreements. He highlighted the perennial demand for Russian goods, especially food and pharmaceuticals, in Turkmenistan. Karaev also expressed optimism that enhanced customs cooperation could provide a much-needed impetus for the growth and efficiency of the small and medium-sized business sector in Turkmenistan, alongside advancements in digitalization, an area where Turkmenistan has significant ground to cover, particularly in service provision.

However, Karaev cautioned that effective engagement for businesses within Turkmenistan faces several long-standing obstacles. A primary concern is the nation’s dual exchange rate system: an official rate set by the Central Bank (3.5 manat to the dollar for years) versus a significantly weaker black market rate (around 19.5 manat to the dollar), which dictates actual market prices. This disparity means that while salaries, pensions, and stipends are pegged to the official rate, citizens face real-world costs based on the black market rate, impacting purchasing power and affordability of imports.

Furthermore, the expert pointed to restrictive currency transfer regulations, which effectively prohibit foreign companies from repatriating profits and complicate domestic financial transactions. This issue, coupled with widespread and indiscriminate blocking of internet segments, poses a severe challenge to Turkmenistan’s digital transformation ambitions. Karaev stressed that a robust, globally connected internet, not a limited national intranet, is essential for digitalization, advising potential IT investors to address internet access concerns upfront.

Despite these internal challenges, Karaev concluded that the anticipated advancements in bilateral economic relations offer a glimmer of optimism, promising economic revitalization, job creation, new technologies, and a commitment from the authorities to keep pace with leading nations.

Intriguingly, the Russian visit coincided with a flurry of other diplomatic activities, underscoring Ashgabat’s multi-vector foreign policy. Simultaneously, a representative delegation from the United Kingdom arrived in Ashgabat to discuss educational cooperation. In Brussels, Turkmenistan’s Minister of Finance and Economy, Mämmetguly Astaňagulow, participated in the Global Gateway 2025 forum, meeting with the EU Commissioner for International Partnerships. This signals Turkmenistan’s proactive engagement with the European Union’s ambitious infrastructure initiative, with substantive contacts expected soon.

Adding another layer to this strategic mosaic, regional players are also exerting influence. Azerbaijan, for instance, has been actively advocating for Turkmenistan’s deeper involvement in the “Middle Corridor” – a vital transit route connecting Asia and Europe – and urging its full membership in the Organization of Turkic States. These concurrent diplomatic engagements highlight Turkmenistan’s complex balancing act, as it seeks to fortify traditional alliances while simultaneously exploring new partnerships and connectivity routes in a rapidly evolving geopolitical landscape.