Turkmenistan has long been known for its rich energy reserves and as a result, has maintained the popularity of its various despotic regimes by providing free public utilities to its citizenry. The government announced today that it will scrap the free provision of electricity, household gas, and water as the economy shows signs of reduced demand for its main export, natural gas. This proposal was made during a meeting of the Council of Elders by dictate from Ashgabat.

It is speculated that the reason why there hasn’t been more dissident activity in Turkmenistan is due to the generous welfare benefits, but it has also led to situations where Turkmenistan is listed as one of the leading countries where water is wasted – despite the region’s notable water shortages. Depressed energy prices have led to decreased cash throughout the Turkmen economy, which is entirely dependent on commodity-driven exports.

This is part of a growing trend – with President Berdimuhamedow ordering that gas meters be installed in homes as a measure to limit the usage of gas, used primarily for cooking.

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News Briefs:

• China has agreed to act as financier through the China Development Bank entity for Uzbek Agriculture, which is considering issues of financial cooperation for the development of agriculture in Uzbekistan (which ironically is already fairly well established). The aim of the project is to promote equipment leasing, as well as lending for agricultural products as most terms relate to amounts allocated to local Uzbek banks to increase lending specifically earmarked for agricultural development.

• In Moscow, the legal status of the Caspian sea is being discussed once again at the Ad Hoc Working Group for the Development of the Legal Status of the Caspian Sea, attended by the Azeri Deputy Foreign Minister Khlaf Khalafov, Iranian Deputy FM Ibrahim Rahimpour, Russian Special Representative Igor Bratchikov, and Chairman of the Caspian issue of Turkmenistan Murat Atajanov. The sides discussed the method of establishing baselines, navigation, and heard expert opinions on the issue, and the next meeting is set to occur in Astana.

• Russian oil output is the highest in the world currently, and is leading the world in terms of more than just barrels per day, but also cash flow, profit margins, and share prices. Rosneft, Lukoil, and Gazprom are performing better than their multinational counterparts like BP, Exxon Mobil, and Royal Dutch Shell.

• Kyrgyzstan has reported much higher than expected GDP growth over the past three quarters, up 4.4% YoY growth. This can be squarely attributed to increased demand for the main export, gold, from the Kumtor gold mine. Chinara Turdubayeva, department chief of the National Statistics Committee said that “industrial production grew thanks to precious metals, whose share in its total volume has totaled around 50%.” Kumtor alone accounts for almost 7.4% of Kyrgyz GDP and almost 15.5% of industrial output.

• Kazakhstan has announced it may cut oil output next year by factor of 1/10 if prices drop to around $30 per barrel, according to a key energy official. This makes it one of the first producers to acknowledge that it cannot withstand the market share battle with OPEC. Kazakhstan, a non-OPEC country, produced around 1.6 million barrels a day, on par with the 8^th largest producer of OPEC, Angola. If prices remain around $40 per barrel, Kazakhstan said its output would be around 77 million tonnes, but if the price dropped further, 73 million tonnes was the Energy Ministry’s estimate.