The London-based European Bank for Reconstruction and Development (EBRD) is revising its country strategy for Turkmenistan, with an EBRD board decision on the new strategy scheduled for late March. In its draft strategy it is arguing that Turkmenistan is implementing reforms that bring it closer to a multiparty democracy, with pluralism and a market economy - all conditions for EBRD investments, as laid down in Article 1 of the EBRD's charter.

The current heavily restricted EBRD lending relationship with Turkmenistan could be about to change.

Yet Turkmenistan continues to be one of the most repressive regimes in the world -- in 2010, the Heritage Foundation and the Wall Street Journal found Turkmenistan to be 171st out of 179 countries in the Index of Economic Freedom, with a score even lower than last year’s. The 2009 Failed State Index ranked Turkmenistan as dangerous.

Ongoing restrictions on freedom [as catalogued below] indicate that Turkmenistan is nowhere near becoming a democratic, free country.

It does, though, sit on massive reserves of gas and oil, and the EU is eyeing these ever more keenly in spite of the human rights issues.

Representatives from CEE Bankwatch Network will be in London this week to conduct advocacy work at the EBRD ahead of the decision on the new EBRD strategy for Turkmenistan.

They will be calling for the EBRD to reconsider the current draft strategy for Turkmenistan, and instead insist that the country make demonstrable and measurable steps toward compliance with Article One of the EBRD charter before the bank makes significant changes to its investment strategy toward the country.


Bankwatch would welcome the chance to meet and discuss with you, from Wednesday to Friday this week in London.


++BACKGROUND++

The EBRD’s decision to invest in a country is based on compliance with Article 1 of the Bank’s founding documents, and Turkmenistan does not meet the standard of applying “the principles of multiparty democracy, pluralism and market economics.” Based on the evidence below, it would be somewhat premature for the EBRD to significantly increase its financing to the country, particularly to government structures or to the hydrocarbon sector.

Turkmenistan is rated by Freedom House as one of the world’s most repressive regimes along with Burma and North Korea. In 2010, the Heritage Foundation and the Wall Street Journal found Turkmenistan to be 171st out of 179 countries in the Index of Economic Freedom, with a score even lower than last year’s. The 2009 Failed State Index ranked Turkmenistan as dangerous.

In 2009, Medecins Sans Frontieres, one of the last international NGOs to operate in Turkmenistan, was forced to leave the country because it could not operate due to lack of cooperation. In 2009, Turkmen students were also forbidden to leave the country to study abroad. Civil society activists were harassed by the government, and one of the country’s most renowned and respected environmentalists, Andrey Zatoka, was forced to renounce his Turkmen citizenship in order to avoid a five year imprisonment for a crime he did not commit.

Turkmenistan has no independent media; virtually all media is controlled by the government. Subscriptions to independent news media are forbidden. Internet access is strictly controlled by the government; sites critical of the government are blocked, as are sites such as YouTube.

Freedom of movement both inside the country and abroad is strictly limited by the government.

Although Turkmenistan has signed on to numerous international conventions, in practice, the government fails to comply with their terms. Turkmenistan has been found out of compliance with the Aarhus Convention by the Convention’s Compliance Committee. The government of Turkmenistan has implemented several large scale projects that violate the Aarhus Convention and which have had serious environmental implications for citizens of the country.

Turkmenistan’s banking and financial systems are insufficiently developed to ensure transparency of revenues, particularly with regard to the oil and gas sector. The country has a history of corruption and graft, particularly in this sector, and there are no systems in place to ensure that the investment of public money would be used in a transparent, open and accountable manner.

Civil society in Turkmenistan is virtually nonexistent because of the punitive laws regarding public associations and the right to assembly.

The EBRD has had a strong, admirable reputation for standing up for human rights in central Asia - most famously taking an aggressive stance against the Uzbek regime in 2003, and it has continued to limit its investments in that country, lending only to private enterprises with no links to the state government. Why now does the bank appear to be getting ready for a softer approach to the oppressive regime in Turkmenistan?


To arrange a meeting and interview, contact:

Piotr Trzaskowski, CEE Bankwatch Network

Tel: +48509162988

OR

Greig Aitken, CEE Bankwatch Network

Tel: +420 605216705; email:  press@bankwatch.org