According to the World Bank’s latest publication, Europe and Central Asia Economic Update: Jobs and Prosperity, job creation poses a significant challenge for Turkmenistan, where employment growth has been declining alongside the shrinking working-age population observed across Central Asia.
Drawing on the report’s findings, economic growth in Central Asian countries is expected to slow, and the region’s working-age population is expected to grow significantly, leading to increased demand for employment opportunities. The population is projected to decrease by an additional 17 million by 2050.
Emigration has contributed to workforce shrinkage, with Russia the primary destination for migrants from Central Asian countries. Despite workforce shrinkage, governments struggle to maintain high levels of growth and job creation. Moreover, the share of manual jobs in Central Asia has declined as workers transitioned from agriculture to services; however, many of the jobs created have been low-skilled and low-productivity, typically curbing both income growth and human capital development. There are many other region-wide challenges for labor market development, such as informality, social protection and pension schemes, income security, remittance-driven small businesses, corruption, rigid market competition rules, etc.
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SUPPORT OUR WORKThe report on Turkmenistan reveals that its labor markets will be significantly affected by shifts driven by AI and technological change. The country, along with other Central Asian countries, lags significantly in AI infrastructure and innovation. Structural weaknesses are particularly evident in supporting digital ecosystems, such as startups and entrepreneurship, and in implementing AI solutions across sectors like healthcare, transportation, and public services. Server density, a measure of a data center’s efficiency and a country’s digital infrastructure capacity, is relatively low in Turkmenistan, indicating significant room for expansion. Therefore, in the coming years, Turkmenistan’s ability to promote a more dynamic labor market and boost productivity amid an aging population and a slowing economy will depend on how quickly it adapts to these technological changes.
Moreover, Turkmenistan, as the sixth-largest holder of global gas reserves and the world’s eighth-largest energy consumer, will face new challenges in its labor market due to the acceleration of the global green transition and decarbonisation. Employment in the fossil fuel sector, including coal mining, will undergo significant changes, resulting in job losses and skill mismatches. Consequently, Turkmenistan should leverage its hydropower and solar potential while temporarily relying on natural gas to ensure energy access for the expanding population and businesses.
