Departing from generally accepted criteria, it is possible to state that favorable investment climate at low investment risks was created in Turkmenistan. It is determined the following basic factors: dynamic economic development of the country; political stability, favorable legislative basis based on “open doors” policy announced by the President of the country; practical absence of close sectors and regions for foreign investors; availability of colossal natural resources , qualified labor force, developed production and social infrastructure; beneficial geographic situation providing good possibilities for export and import.
Analysis of investment of foreign capital into economy of Turkmenistan shows that in the last three years, the volume of foreign investments exceeds their size in 2007 nearly by 8-10 times. At that, the share of foreign investments in this period fluctuates within 14-20 % from total volume of investments.
Foreign investors, realizing their activity on the territory of free economic zones, particularly, foreign companies functioning on the territory of “Avaza” National Tourist Zone, enjoy more favorable conditions in Turkmenistan. Besides, several territorial economic zones of free entrepreneurship as well as a series of enterprises with sectoral status of free economic zones are functioning in the country.
Major mechanisms of attraction of foreign investments to the economy of Turkmenistan are: contract forms, Product Sharing Agreements (PSA), Servicing contracts; international crediting; creation of joint enterprises (JE).
Conditions of PSA allow choosing optimal correlation of royalty, limit of compensation products and proportions of sharing and making them variable owing to which it is provided flexibility and predictability of economy of the project during many next years of production. In Turkmenistan, several projects are realized in the Turkmen sector of the Caspian Sea and onshore within the framework of licenses given to foreign companies-investors on the PSA terms. One of the priority and prospective spheres of attraction of foreign investments is the development of sea deposits on the Turkmen shelf of the Caspian Sea. Bright confirmation of this fact is the successful experience in this sphere of such foreign companies as “Dragon Oil” (UAE-Great Britain), “Petronas” (Malaysia), RWE (Germany), “Itera” (Russia), which realize the large investment projects. British Company “Burren Energy”, Italian “Eni” Concern and Chinese “CNPC” Company implement the projects at mainland hydrocarbon deposits on PSA terms.
As a result of 2014, nearly a half of oil and the fifth part of gas were extracted by joint and foreign companies. Foreign investments in oil production on shelf of our country have exceeded 10 billion US dollars and go on to rise.
Several large contracts with foreign companies were made by our country in the sphere of oil refining as well. Calculations of the specialists show that completion of the construction of new large facilities and their putting into exploitation will provide the increase of volumes and depth of oil refining from 80 up to 92 percent.
In particular, the Japanese and Korean companies build two installations on production of petrol from natural gas with capacity of 600 thousand tons of products each, installation on production of diesel fuel and aviation kerosene from gas with capacity of 2.6 million tons, installation on production of synthetic oil from associated gas, one of the large installations on annual production of 381 thousand tons of polyethylene and 81 thousand tons of polypropylene. The Chinese companies also constructed 2 gas-processing plants.
International financial institutions take an active participation in the crediting and financing of several investment programs and projects in Turkmenistan. European Bank of Reconstruction and Development took part in the financing of over 30 projects, being realized on agreement of the Government of Turkmenistan with International Bank of Reconstruction and Development (IBRD). Islamic Bank of Development (IBD) and Asian Bank of Development (ABD) participated in the financing of the construction project of the Turkmen section of Kazakhstan-Turkmenistan-Iran.
In May 2014, it was held the signing of crediting agreements to the sum of over 2.5 billion US dollars with syndicate of the financial institutions of Japan, Germany, France, Korea, China, Italy, Austria and Switzerland on financing of construction of gas-chemical complex for production of polypropylene and polyethylene in Kiyanly settlement.
Creation of JE and enterprises with foreign participation of different organizational and legal forms, including joint-stock, contributes the entering of Turkmenistan into system of world economic union, plays significant role in formation of market infrastructure, involvement in our country of new technique and technology, modern methods of international marketing and leading administrative experience, increase of competitiveness of products. They have particular significance as factor of attraction of direct foreign investments.
At present, over 800 joint and foreign enterprises and more than 1000 branches and representative offices of foreign enterprises of over 70 states have been registered in our country. Priority spheres of activity for foreign investors are the construction, industry, services as well as trade. At the same time, according to the number of employees, the construction and industry has overwhelming advantage – over 93 %.
Speaking about economic indices of activity of joint and foreign enterprises in our country, it is particularly worth to underline that increase of volumes of industrial product and rendered services came to nearly 11 times as compared with 2007, volume of investments – nearly 10 times. Overseas companies provide major flow of foreign investments in production industry, realizing them owing to own funds – over 96% of total volume of investments in main capital on non-governmental sector of economy.
It is also worth mentioning the growth of number of employees at the enterprises with foreign participation as well as its share in total employment in economics. Average annual growth paces of number of employees at these enterprises in the last years came to over 10%.
Contracts of the state with foreign firms mainly on tender basis in such sectors as designing and construction, trade-purchase and supply activity gained wide spreading in our country. Contract forms develop particularly dynamically in the construction sector. In 2014, the volumes of investments in Turkmenistan only in the construction made over 51billion US dollars. At that, 50% of total volume of building and assembly and other capital jobs and services falls on share of foreign contractors. Over 140 foreign firms of 25 countries of the world took part in development of investments. Among them, Turkey, Russian Federation, France, Kazakhstan, Great Britain, Iran, Ukraine and China show higher activity.
Analysis of investment of foreign capital into economy of Turkmenistan shows that in the last three years, the volume of foreign investments exceeds their size in 2007 nearly by 8-10 times. At that, the share of foreign investments in this period fluctuates within 14-20 % from total volume of investments.
Foreign investors, realizing their activity on the territory of free economic zones, particularly, foreign companies functioning on the territory of “Avaza” National Tourist Zone, enjoy more favorable conditions in Turkmenistan. Besides, several territorial economic zones of free entrepreneurship as well as a series of enterprises with sectoral status of free economic zones are functioning in the country.
Major mechanisms of attraction of foreign investments to the economy of Turkmenistan are: contract forms, Product Sharing Agreements (PSA), Servicing contracts; international crediting; creation of joint enterprises (JE).
Conditions of PSA allow choosing optimal correlation of royalty, limit of compensation products and proportions of sharing and making them variable owing to which it is provided flexibility and predictability of economy of the project during many next years of production. In Turkmenistan, several projects are realized in the Turkmen sector of the Caspian Sea and onshore within the framework of licenses given to foreign companies-investors on the PSA terms. One of the priority and prospective spheres of attraction of foreign investments is the development of sea deposits on the Turkmen shelf of the Caspian Sea. Bright confirmation of this fact is the successful experience in this sphere of such foreign companies as “Dragon Oil” (UAE-Great Britain), “Petronas” (Malaysia), RWE (Germany), “Itera” (Russia), which realize the large investment projects. British Company “Burren Energy”, Italian “Eni” Concern and Chinese “CNPC” Company implement the projects at mainland hydrocarbon deposits on PSA terms.
As a result of 2014, nearly a half of oil and the fifth part of gas were extracted by joint and foreign companies. Foreign investments in oil production on shelf of our country have exceeded 10 billion US dollars and go on to rise.
Several large contracts with foreign companies were made by our country in the sphere of oil refining as well. Calculations of the specialists show that completion of the construction of new large facilities and their putting into exploitation will provide the increase of volumes and depth of oil refining from 80 up to 92 percent.
In particular, the Japanese and Korean companies build two installations on production of petrol from natural gas with capacity of 600 thousand tons of products each, installation on production of diesel fuel and aviation kerosene from gas with capacity of 2.6 million tons, installation on production of synthetic oil from associated gas, one of the large installations on annual production of 381 thousand tons of polyethylene and 81 thousand tons of polypropylene. The Chinese companies also constructed 2 gas-processing plants.
International financial institutions take an active participation in the crediting and financing of several investment programs and projects in Turkmenistan. European Bank of Reconstruction and Development took part in the financing of over 30 projects, being realized on agreement of the Government of Turkmenistan with International Bank of Reconstruction and Development (IBRD). Islamic Bank of Development (IBD) and Asian Bank of Development (ABD) participated in the financing of the construction project of the Turkmen section of Kazakhstan-Turkmenistan-Iran.
In May 2014, it was held the signing of crediting agreements to the sum of over 2.5 billion US dollars with syndicate of the financial institutions of Japan, Germany, France, Korea, China, Italy, Austria and Switzerland on financing of construction of gas-chemical complex for production of polypropylene and polyethylene in Kiyanly settlement.
Creation of JE and enterprises with foreign participation of different organizational and legal forms, including joint-stock, contributes the entering of Turkmenistan into system of world economic union, plays significant role in formation of market infrastructure, involvement in our country of new technique and technology, modern methods of international marketing and leading administrative experience, increase of competitiveness of products. They have particular significance as factor of attraction of direct foreign investments.
At present, over 800 joint and foreign enterprises and more than 1000 branches and representative offices of foreign enterprises of over 70 states have been registered in our country. Priority spheres of activity for foreign investors are the construction, industry, services as well as trade. At the same time, according to the number of employees, the construction and industry has overwhelming advantage – over 93 %.
Speaking about economic indices of activity of joint and foreign enterprises in our country, it is particularly worth to underline that increase of volumes of industrial product and rendered services came to nearly 11 times as compared with 2007, volume of investments – nearly 10 times. Overseas companies provide major flow of foreign investments in production industry, realizing them owing to own funds – over 96% of total volume of investments in main capital on non-governmental sector of economy.
It is also worth mentioning the growth of number of employees at the enterprises with foreign participation as well as its share in total employment in economics. Average annual growth paces of number of employees at these enterprises in the last years came to over 10%.
Contracts of the state with foreign firms mainly on tender basis in such sectors as designing and construction, trade-purchase and supply activity gained wide spreading in our country. Contract forms develop particularly dynamically in the construction sector. In 2014, the volumes of investments in Turkmenistan only in the construction made over 51billion US dollars. At that, 50% of total volume of building and assembly and other capital jobs and services falls on share of foreign contractors. Over 140 foreign firms of 25 countries of the world took part in development of investments. Among them, Turkey, Russian Federation, France, Kazakhstan, Great Britain, Iran, Ukraine and China show higher activity.
