Economic shock therapy?
[inspic=78,,,0]It looks like the Turkmen government is going to continue economic reforms aimed at bringing Turkmenistan’s economy closer to market economy. Some commentators have even called it the beginning of an economic shock therapy.
On April 14 Turkmenistan’s President Gurbanguly Berdymukhammedov held a government meeting, which addressed the results of the first quarter of 2008 as well as the future strategy for improving the country’s socio-economic development. In particular, a decree “On introducing the redenomination (changing the currency value) of the national currency of Turkmenistan” was adopted. The session also highlighted that a unified dollar exchange rate is scheduled to replace the state-controlled ?nd commercial rates.
The denomination of manat is scheduled to take place as of January 1, 2009. However for the time being, it was the announced introduction of unified dollar exchange rate that has been most painful for people.
The next day the news caused panic among the Turkmen residents. Starting from May 1 (or throughout May) a new dollar exchange rate will allegedly be introduced. One dollar is expected to equal 10,000 manats whereas according to other sources one dollar will equal 17,000-18,000 manats. People rushed to the currency exchange offices to exchange their foreign currency savings. However, referring to a manat shortage, the exchange offices allow each person to sell up to 100 dollars at a time. In order to exchange as much cash as possible, people bring their relatives and friends. Huge hour-long queues have formed at the currency exchange offices.
Experts are not unanimous in their assessment of the current economic reform. Some of them criticize the government, indicating that its plans may e.g. spur inflation. Nevertheless, it seems that in this case the authorities can hardly be accused of ill will. It looks like they have good intentions and really intend to reform (at least partially) the Turkmen economy. The fact that they make mistakes is yet another issue. Maybe it would be a good idea to invite experts from other countries, e.g. from East-Central Europe, that have recently undergone transformation?