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Central Asia news

Gurbankuly Berdymuhammedov proceeds with economic reforms

16.04.2008 12:42 msk

Nezavisimaya Gazeta

Business Turkmenistan

The decree on denomination of the national monetary unit President Gurbankuly Berdymuhammedov signed this Monday will come into force on January 1, 2009. Enlarged meeting of the Cabinet discussed interim results of the economic and social reforms. National Bank chairman resigned.

As a matter of fact, the banker was not the only one to fall victim of the president's wrath. Resignations of Geldymurad Abilov of the Central Bank and Deputy Premier Gurbannazar Ashirov were accepted as well.

Launching the economic reforms a year ago, Berdymuhammedov drew the government's attention to development of banking services. The president made it plain that he wanted all money in circulation passing through banks so that the national monetary unit would "retain stability and value". Abilov was instructed to make an emphasis on development of non-cash payment facilities and create a network of cash dispensers, payment terminals, and plastic cards.

Berdymuhammedov's orders were never carried out. All the Central Bank did was open new hard currency exchange offices (and even they lack hard currency to stay in business, even the ones in Ashkhabad). Moreover, operators themselves set the exchange rate more often than not. Black market thrives. Distrusting the state and its banks, the Turkmens stash their savings away under the mattresses... All of that compels the government to turn on printing equipment more often than it would like to.

Berdymuhammedov wants denomination to begin on January 1. According to the decree, 1,000 old manats will be exchanged for 1 new. The involved banks are expected to carry out the exchange operations without restrictions all through 2009. Price tags throughout the country will specify prices in old and new manats.

Portraying prominent figures of the Turkmen state, the banknotes were designed by De La Rue International Limited of Great Britain. A 500 manat banknote portrays the first President Saparmurat Niyazov.

Experts in the meantime warn that the monetary reform will bring with it but another price-rise and little else. Not even the authorities deny it. They recognized existence of inflation and price-rise earlier this year.

Berdymuhammedov ordered a census in Turkmenistan in 2012. No hard data on the population existed in the Turkmenbashi's days. The population of Turkmenistan was estimated at between 5 and 7 million.

Source: Nezavisimaya Gazeta, No 79, April 16, 2008, p. 9 © Translated by Ferghana.Ru