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20/07/2004 EBRD DEMANDS DEMOCRACY AND REFORM IN TURKMENISTAN
ALMATY, July 20 (Reuters) - The European Bank for Reconstruction and Development has warned Turkmenistan that its future role in the country will depend on whether a poor human rights record improves and stalled economic reforms proceed.
The government of the central Asian country reacted coolly to the statement by the region's development bank, with a spokesman criticising it for using "the language of ultimatum".
"The Bank has been seriously concerned for a number of years by Turkmenistan's lack of progress in transition towards multi-party democracy, pluralistic society and a market-based economy," the EBRD said in the Turkmenistan Strategy Overview posted on its site www.ebrd.org.
"Since the adoption of the last strategy for Turkmenistan in July 2002, there has been little evidence of improvement," the EBRD, which operates in Eastern Europe and the former Soviet Union, added.
Total EBRD investment commitments in Turkmenistan stand at 127.8 million euros ($158.3 million), although it invested only 500,000 euros in 2003 and has made no investments this year.
The EBRD is unique among international lenders because it insists that economic reforms and democratic changes should go hand in hand in the post-communist states which it lends to.
"I strongly urge the authorities of Turkmenistan to implement the necessary political and economic reforms, which will make it possible for the Bank to expand its activities for the benefit of the Turkmen people," EBRD President Jean Lemierre said in a letter to Turkmen President Saparmurat Niyazov.
But a Turkmen government official said the reforms pressed for by the EBRD amounted to "a shock therapy treatment" and made clear they were likely be rejected. "We regret that the bank chose the language of ultimatum," he told Reuters on Tuesday.
Officially titled Turkmenbashi, or Head of the Turkmen, Niyazov enjoys autocratic powers and a flourishing personality cult. He brooks no dissent and mass media are muzzled.
Turkmenistan's human rights situation deteriorated after an alleged assassination attempt against Niyazov in November 2002.
Heavy subsidies are a feature of the Turkmen economy, which depends on natural gas exports. Without proper regulation and transparent accounting, Niyazov alone orders spending from extra-budgetary funds, replenished by export revenues, the bank said.
There are multiple exchange rates for the manat currency, and enterprise privatisation has been halted since 2001.
If Turkmenistan shows no progress in political and economic reforms, the EBRD is likely to implement a "baseline" scenario.
"The Bank's activities will be focused particularly ... on small- and medium-sized enterprises and micro-finance areas, provided it can be shown that the proposed investments are not effectively controlled by the state ... and government officials will not personally benefit from such investments," it said.
In April the EBRD curbed loans to neighbouring Uzbekistan due to continued political repression and stalled economic reforms.
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Copyright 2004 Republican Party of Turkmenistan |
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