Rich in Resources, Turkmenistan Fights To Shed Stagnation of Its Soviet Legacy

Like a dingy, poor man's Palm Springs, the city is encased in the gray-blue water by rocky desert crags - the shadows sharp under the Central Asian sun. Inside nearly every office and public room in Turkmenbashi, Turkmenistan, the same face stares down from the wall.

President Saparmurad Niyazov's soft features and shock of white hair are inescapable all over Turkmenistan. His portrait is not only in every room, but also hangs over the main entrances to public buildings in Ashkhabad, the capital, and adorns the top of the downtown high-rise office of the national airline. Here he poses formally in a dark suit. There he leans casually on an elbow in white shirt and tie.

Now that he is beginning to dye his hair, citizens here comment slyly about needing to repair the color adjustment on their TV sets, where he is a constant presence.

Though he looks more like the nation's dad than successor to the despotic khans that ruled this land until the Soviets took over in 1920, even the most cynical and discontented Turkmen rarely venture a critical word about the man who proclaimed himself "Turkmenbashi" and has put his name on nearly everything in Turkmenistan, from the clean, new, and nearly empty airport in Ashkhabad to this port city on the Caspian. Of all the quasi-dictatorial presidents in the region, each one a former high Soviet official, Mr. Niyazov is the most extreme in personalizing his power.

The irony of this place is that Turkmenistan is blessed with the third-largest gas reserves in the world, according to a US Department of Energy report, and its estimated oil reserves in the Caspian Basin are second only to Kazakstan's. Yet the country vies with war-shredded Tajikistan as the poorest country in the former Soviet Union.

Different priorities

While Kazakstan and Azerbaijan have been working out foreign partnerships for years that have pumped tens of billions of dollars in capital investment into new oil fields, Niyazov has been building presidential estates, fountain-filled parkways along the route to his suburban compound, and a vast Oz-like palace downtown.

Here in Turkmenbashi, economic life has been stagnant since independence from the Soviet Union in 1991. The Russians and ethnic Germans whom Stalin exiled here have left in droves. Everyone speaks of friends in the past tense. They have moved to Russia or Germany seeking work.

The oil refinery on the back side of the city is the size of a small town, visibly falling apart and surrounded by blackened pools. The oil fumes in the neighborhood are smothering. Turkmen oil exports have fallen by half since 1991.

But near the center, on the site of what was the city's only public beach, stands a reasonably new but already neglected park surrounding a community center sort of building, all built by Turkish contractors.

Locals can't explain exactly what the building is for. They just shake their heads. It might be for offices, or shops, or perhaps community-center sort of meetings. No matter, it's empty.

One local official, speaking on condition that neither his name nor his agency be mentioned, explained how such projects are built. Typically, a foreign company will bid, say, $100,000 on a construction project. The key bureaucrat with the budget at his disposal will propose that the contractors triple their bid, take one-third for himself, and pass another third back to the contractor as extra inducement. Sometimes the deals are complex with many layers, but the principle is the same. The public pays the outrageously inflated bill.

Such deals always must involve foreign contractors, the official says, so the kickbacks can remain offshore and unmonitored by other Turkmen agencies.

This pattern is followed by officials all over the former Soviet Union, but the claims of this official were rendered more credible in that he described his own role in such deals. He spoke because it made him feel better to get it off his chest. He is ashamed and scornful at how his agency has grown corrupt since its relatively spotless days during the Soviet Union. He is playing a role in a major illegal deal in the works now, he says, because his superiors are part of it and are telling him what to do. And it is making him rich.

Part of what makes the people of Turkmenistan so vulnerable to bureaucratic scams is the highly personal nature of their government. Foreign companies typically sign contracts with a single official, and the contracts lose force as soon as the official leaves office. Below the level of President Niyazov, turnover is frequent.

A year ago, the government created a Ministry of Foreign Investment, which clears all foreign deals. This has created a more stable, reliable environment for signing contracts, according to at least one Western businessman here.

Once a crossroads

Turkmenistan was once much nearer the center of world civilization than it is today. The Parthians ruled Central Asia from here for half a millennium. Under Arab rule in the early Middle Ages, the region became a center of learning with famous libraries. In neighboring Khworezm, a mathematician called Al-Khworezmi developed much of modern algebra (his name became the word algorithm). The vast Seljuk Turk empire shifted the center of the entire Islamic world from Baghdad to the city of Merv, now in modern Turkmenistan. Then Genghis Khan laid it to waste in 1220.

But this end of the Kara Kum Desert has mostly been inhabited by Turkmen tribes that wove beautiful rugs (the misnamed but well-known "Bukhara" design) and raided Silk Road caravans and Russian settlements for slaves.

The Russians founded Krasnovodsk in this natural harbor in 1869 as a military foothold in their so-called "great game" with the British for control of the trade routes in Central Asia. They promptly built a railway east across hundreds of miles of desert. The British eventually relented, and Turkmenistan became part of the Soviet Union in 1920.

But Central Asia turned into what many historians have called an "internal third world" for the Soviets. They planted it with cotton and field crops and irrigated it so wastefully that the Aral Sea, into which the major regional rivers flow, has shrunk to less than half its original area.

Another result of that technique is that more than half of all irrigated land in Turkmenistan is now salinized - too salty to farm.

There was a human result of the Soviet presence and pullout as well. The Soviets were successful in spreading literacy in all their republics, but much of the leadership and specialization in Turkmenistan was Russian.

The Russians that have left in the years following independence have taken expertise and some self-assurance with them.

Luk Van Nieuwenhove, a Belgian businessman who has worked here for several years, says that the Turkmens are beginning to figure out how to run their country. "If you come here to do real business, you have to be serious. The cowboy time is over."