The OECD report, “Building a Competitive Investment Landscape in Turkmenistan (2025),” provides the first country-specific analysis of Turkmenistan’s business and investment environment. Authors surveyed more than 30 private sector firms and interviewed development partners, government officials and business people to identify challenges to the investment landscape including dual exchange rate, regulatory and bureaucratic hurdles, poor infrastructure and digitalization, human capital mismatch, legal opacity and import substitution limits. The report also proposes recommendations grounded in OECD good practices.
Current Economic Landscape
Turkmenistan holds the 4th largest natural gas reserves in the world (approx. 10% of global reserves). Natural gas and mineral products account for an average of 90% of total exports, with China receiving approximately 75% of these exports. While the country’s FDI stock is 63% of GDP, which is high for the region, 98.7% of planned FDI for 2025 is concentrated in the gas and fertilizer sectors. Only 45% of surveyed firms believe the climate is evolving positively, citing easier tax payments and business registration.
Some of the Challenges Limiting Business and Investment Landscape
Human Capital
Turkmenistan faces a significant mismatch between education and labor market needs, particularly in specialized sectors. Tertiary education institutions currently accommodate only 15% of school graduates annually, and vocational education (VET) participation is even lower. The government reported that in 2024, approximately 19.5% of graduates entered higher education.
Firms report acute shortages of specialists in multimodal logistics, digital technologies, sales, marketing, and financial consulting. To cope, some industries such as manufacturing and confectionery hire foreign experts or conduct costly in-house training, which increases operational expenses.
While the government offers tax reductions to firms where 75% of staff are under 35, youth unemployment remains a concern. As of 2024, the youth unemployment rate (ages 15-24) shows a notable gap: it is estimated at 14.1% for males and significantly lower at 5.8% for females.
Internet and Digitalization
Donate to support Turkmen analysts, researchers and writers to produce factual, constructive and progressive content in their efforts to educate the public of Turkmenistan.
SUPPORT OUR WORKInternet connectivity is viewed as a critical enabling factor for business, yet it remains one of the country’s most significant hurdles. Fixed broadband costs approximately 5% of Gross National Income (GNI) per capita. There is a massive pricing disparity: while a local firm might pay 2,000 TMT (approx. $570) for a 10 Mbps connection, private foreign companies face a prohibitive tariff of $4,561 for the same speed.
Nearly 40% of surveyed firms cited internet infrastructure as the top priority for improvement. Problems include restricted access to specific services (e.g., ChatGPT), low digital literacy, and the total lack of connectivity in certain rural areas. Mobile banking usage is also low, with only about 92,000 users recorded in early 2025.
Parallel Exchange Rate and Currency Control
The sources characterize the dual exchange rate system as a major source of economic distortion and a deterrent to foreign investment. The official exchange rate is fixed at 3.5 TMT/USD, while the parallel (informal) market rate has fluctuated significantly, peaking at 38 TMT/USD in 2021 before stabilizing around 18.5 to 19.5 TMT/USD.
For firms engaged in international trade, currency controls are a significant barrier. Importers of finished products have no guaranteed access to conversion, while priority sectors (like food production) receive restricted biweekly conversion authorizations of only 2% of contract values. Such a system also creates severe losses during legal disputes. In one reported case, a business owed $15,000 was paid in manats at the official rate, effectively receiving only $2,000 in real value.
World Trade Organization (WTO) Accession
Turkmenistan obtained acceding country status in WTO in 2022 and aims for full membership by 2030. Surveyed firms are generally optimistic, believing accession will reduce tariffs on machinery and raw materials while facilitating access to foreign markets. However, the country’s import-substitution policy, a pillar of its current economic strategy, is viewed as inconsistent with WTO principles of trade liberalization. Furthermore, businesses worry that complying with international standards might lead to a spike in local prices.
