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WEEKLY NEWSLETTER
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Turkmenistan
Index
One of the most important reforms of Turkmenistan's economic plan is
privatization. Article 9 of the 1992 constitution guarantees citizens the
right to own capital, land, and other material or intellectual property,
but no law has stipulated the source from which land could be acquired. No
fund of land available for private purchase has been established. A law on
land ownership allows every citizen the right to own and bequeath to heirs
plots smaller than fifty hectares, so long as they are continuously
cultivated, and to obtain a long-term lease on up to 500 hectares. Such
land may not be bought or sold, however. In 1993 only about 100 peasant
farms were privately run, and they were leased rather than owned.
Nevertheless, after the government announced the 1993 law allowing
fifty-hectare plots, it soon received more than 5,000 applications.
In February 1993, a State Committee on Land Reform was established, with
a goal of privatizing 10 to 15 percent of all agricultural land. Beginning
in May 1993, the state began leasing land on the condition that 35 percent
of the state procurement for cotton be surrendered, with no monetary
compensation, as payment of rent. Estimates of the irrigated land since
leased or under private ownership range from 3 to 12 percent. The state
also intends to privatize all unprofitable agricultural enterprises.
The privatization process is managed by the Department of State
Property and Privatization, which is part of the Ministry of Economy,
Finance, and Banking. Short-term plans call for continued state control of
the gas, oil, railway, communications, and energy industries and
agriculture--sectors that combine to account for 80 percent of the
economy. Laws on leasing, joint-stock companies, and entrepreneurship were
adopted in the early 1990s. A general privatization law passed in 1992
describes the gradual denationalization of state property through a
variety of methods.
In 1992 only 2,600 small enterprises--mostly individual ventures such
as trading outlets and home-worker operations--were privately owned.
Through the end of 1993, only a few small trade and service enterprises
had moved to private ownership, mostly sold to foreign buyers. Plans
called for conversion of large manufacturing firms into joint-stock
enterprises by the end of 1994, and private ownership of all trade and
service-sector enterprises with fewer than 500 employees by the end of
1995. However, the state would maintain a "controlling interest"
in businesses that become joint stock companies and would retain control
over profitable larger concerns.
A second important component of Turkmenistan's economic development
plan is marketization. To promote this process, a decree was issued in
March 1993 for the formation of a joint-stock bank, the granting of
additional credits to the Agroindustrial Bank for the development of
entrepreneurship, and the establishment of seven free economic zones.
Agricultural entrepreneurs are to be granted special profits tax and land
payment exemptions. Within free economic zones, companies with more than
30 percent foreign ownership are to receive special exemptions from profit
tax and rental payments.
Data as of March 1996
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