Back Matter

APPENDIX I: Turkmenistan—Statistical Issues

1. National accounts

Until recently, the State Statistics Committee (Goskomstat) of Turkmenistan estimated output by use of methodologies inherited from the Soviet Union. The resultant measure of National Income Produced in the Material Sphere (NIP) was imprecise due to weaknesses in both reporting by enterprises and in the measures of appropriate price deflators. Goskomstat provided an estimate of GDP from the production side, valuing exports of state enterprises at the official exchange rate. This rate was significantly overvalued in relation to the commercial rate, and even more so in comparison to the parallel market rate. The staff currently estimates GDP by adding in an explicit calculation of value-added in the gas sector, using an estimate for the market exchange rate. There are at present no official estimates of GDP from the expenditure side. One key problem remains that the Goskomstat measure of “accumulation” includes revaluation of the existing capital stock. A 1995 STA mission urged Goskomstat to produce a basic measure of GDP using currently available data based on the methodology described in the 1993 SNA.

2. Price indices

Until May 1995, Goskomstat measured inflation by use of a retail price index (RPI) with changing weights determined from retail sales data. Inflation is now measured by an annual chain-linked Laspeyres index, following extensive technical assistance provided by STA. However, the weights of the producer price index continue to be changed frequently. Turkmenistan has requested STA technical assistance in compiling price indices for imports and exports.

3. Government finance

An economic and functional classification of budget expenditures can now be constructed from Ministry of Economics and Finance (MEF) sources, but the estimates are imprecise. In addition, the coverage of this data is too limited to be a reliable record of government activity. After significant technical assistance from the Fund, the MEF is introducing a Treasury system, which should improve statistical reporting during 1996. Also, provision has been made for extending the term of the FAD Resident Advisor for Turkmenistan.

A government finance statistics mission visited Ashgabat during September 15-28, 1994, to reclassify the authorities’ budget accounts on a GFS basis. Data on considerable government activity outside the budget are not being reported.

4. Money and banking

In the past, efforts to compile monetary statistics on a routine basis were frustrated by the introduction of new accounts and the misclassification of the existing accounts. A STA money and banking statistics mission visited Ashgabat during the EUR II mission’s stay in November 1995, and worked closely with the authorities and the EUR II mission to reclassify the accounts of the CBT, and update the monetary statistics. On the basis of the recommendations of the STA mission, a system was established to compile monetary statistics that could be used by the authorities, EUR II, and STA. The STA mission also provided further training to the staff of the CBT in the methodology for compiling monetary statistics and discussed arrangements for regular reporting of monetary data to the Fund.

5. Balance of payments

Since the first quarter of 1994, reporting and processing of the balance of payments (BOP) within the CBT has permitted quarterly reporting. Problems remain in a number of areas, including the accounting for barter trade and the recording of transfers. The authorities have agreed to a STA proposal to assign a regional BOP advisor (to cover the Kyrgyz Republic, Turkmenistan, and Uzbekistan).

6. Reporting to the Fund

The status of reporting to the Fund of the core statistical indicators is shown in the attached table.

Turkmenistan: Core Statistical Indicators

(As of January 19, 1996)

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NMP estimates are available and published quarterly.

Explanation of abbreviations:

Frequency of data, reporting and publication: D-daily, W-weekly, M-monthly, Q-quarterly, A-annually, OR-on request, CH-when changed. Source of Updating: A-Central Bank of Turkmenistan, B-Goskomstat, C-Ministry of Economy and Finance. Mode of reporting: RR-by fax through Resident Representative. Confidentiality: CON-confidential.

APPENDIX II: Turkmenistan—Technical Assistance 1/

The IMF has provided substantial technical assistance and training to Turkmenistan, including in strengthening monetary and fiscal institutions, enhancing the effectiveness of monetary, exchange, and fiscal management, and improving the compilation of statistics. The Fund has stationed a Resident Representative in Ashgabat since October 1993 and has provided, since February 1994, two resident advisors to the Central Bank and the Ministry of Economy and Finance, respectively. Other international agencies—including the World Bank, EBRD, EU and OECD—and bilateral donors are also providing a vide variety of technical assistance to Turkmenistan. While the assistance has been veil received, implementation has been limited in a number of areas by the slow progress in structural reforms and lack of skilled personnel.

In November 1994 and November 1995, missions from the IMF’s Statistics Department (STA) assisted in the compilation and analysis of money and banking statistics, resulting in improved reporting on monetary developments. Further progress in this area depends on the introduction of a new system of accounts, under consideration by the Central Bank. STA recommendations concerning the compilation of a consumer price index have been implemented and a new index vas introduced in May 1995. Although some progress has been made in the area of compiling national accounts, recommendations towards implementing the internationally recognized System of National Accounts (SNA) remain to be implemented.

In January and September 1995, missions from the IMF’s Fiscal Affairs Department (FAD) made substantive recommendations for reform of the taxation system and the social safety net, respectively. These recommendations are under review by the authorities. With the assistance of the FAD Resident Advisor, considerable progress has been made in setting up a Treasury system, with new computerized reporting arrangements to be operational in early 1996.

In September 1995, a mission from the Monetary and Exchange Affairs Department (MAE) of the IMF reviewed progress in monetary and exchange reforms and made recommendations for further improvements. Substantial progress has been made in building an institutional and operational base consistent with modern central banking functions, and recent technical assistance has been directed mainly at reforms toward market-based monetary management.

Government officials continue to participate in IMF Institute courses and seminars, held at the Joint Vienna Institute and IMF Headquarters. In 1995, 23 officials from the Ministry of Finance and the Central Bank attended 14 different courses at the Joint Vienna Institute, covering a wide range of economic and statistical issues, and one official attended a seminar at IMF Headquarters for Senior Officials from Economies in Transition.

IMF Technical Assistance and Training

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APPENDIX III: Turkmenistan—Social Protection System

Turkmenistan implements an extensive system of social protection, consisting of guaranteed employment in state-owned enterprises and farms; subsidized prices for basic consumer goods, housing, health care, and other key consumption items such as gas, water, and electricity; and a system of pensions, family allowances, and unemployment benefits. The benefits have been provided through the budget, as well as by off-budget ministries and public agencies. The system, which is far from being transparent, has been costly to operate, with the benefits not always reaching the most vulnerable groups of the population.

Price subsidies operate through transfers from the budget to producers to cover the excess of production costs (including procurement of items the prices of which are set by the Government) over retail prices (also set by the Government for subsidized goods). A ration system—which includes basic food items such as flour, meat, rice, milk, butter, sugar, and tea—allows individuals to purchase fixed amounts of the rationed items at subsidized prices. Presently, under the ration system, the price of flour is set at manat 10 per kilogram, with a ration of 8 kilograms per month for rural and urban consumers. The price of bread ranges from manat 63 to manat 150 per kilogram, while meat is priced at about manat 150 per kilogram. Energy products are also subsidized, with octane-93 gasoline priced at manat 50 per liter. In addition, gas, electricity, water, and other utilities are distributed free of charge to household up to certain limits, although it is not possible to measure household consumption in the absence of meters. Rents on apartments are also highly subsidized at manat 1 per square meter, with an additional 50 percent rebate for single pensioners and low-income families.

The extent of overall price subsidization is unclear and difficult to measure. Some of the goods sold at subsidized prices are imported through barter arrangements, so that the cost of the implicit subsidy does not appear on budget, but is carried by the branch ministry concerned, often the Ministry of Oil and Gas. Moreover, domestic production costs are not accurate indicators of economic costs. Farmers are obliged to sell significant shares of their crops to the state at government-set procurement prices that are generally below world market levels, but have received inputs at subsidized prices and, until recently, cheap bank credits. The authorities are becoming increasingly aware of the need to substitute the present complex system by more transparent and direct means of social protection, and the recent measures to curtail price subsidies can be considered as first moves in this direction.

Family allowances provide for a single allowance for children under six, and a means tested allowance for children between the ages of six and sixteen, although in practice it is difficult to assess incomes other than from wages. As of November 1995 family allowances comprised a birth allowance of one month’s minimum wage, a monthly allowance equivalent to 15 percent of the minimum wage for every child under 16 (18 for students), paid to families with average per capita income below 30 percent of the minimum wage, and a monthly allowance (20 percent of the minimum wage for working mothers and 15 percent for non-working mothers) for mothers with children under 6. There are also death, disabled, and veterans benefits.

Pensions, which are provided from the budget, are funded by a social tax of 30 percent on the gross wage bill of employers 1/ and one percent on employees. The retirement age in Turkmenistan is 60 for men and 55 for women. At present, the old age dependency ratio is declining, and the demographic implications of the age structure are not expected to pose a problem for several decades. The number of pensioners in 1994 was 420,020, of which 305,575 received old-age pensions, and the rest disability, service, and dependency pensions. The average pension in the third quarter of 1995 was manat 3,728 per month, 2/ about 43 percent of the average wage in the same quarter (Table 20). Pensions are not automatically linked to inflation, but adjustments are made from time to time. In 1994, average pensions doubled over 1993, while as part of the package of economic measures announced in December 1995, pensions and benefits were raised two to three times from the beginning of 1996.

There is an Employment Law specifying benefits for the unemployed. Benefits are available to those registering at the employment office and able and willing to work. 3/ Although the Employment Law provides for a payroll contribution of 2 percent to be paid to the Employment Fund by enterprises, this is not being collected.

APPENDIX IV: Turkmenistan—Ministries and Institutions

I. Ministries and Institutions Essentially Supported by the Central Budget

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II. Mainly Self-Supporting Institutions

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APPENDID V:

Turkmenistan: Summary of Major Taxes as of January 1, 1996

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APPENDIX VI: Turkmenistan—Local Taxes

Under Article 13 of the Law of Local Government of Turkmenistan, the following local taxes and fees may be introduced on the territory of the country:

1. Tax on construction of industrial facilities within resort areas, with rate not exceeding one percent of the declared construction cost.

2. Resort fee charged on private individuals using resort areas, with the rate not exceeding 5 percent of the minimum monthly wage pursuant to the Law. The list of resort areas shall be determined by the Cabinet of Ministers of Turkmenistan.

3. Fee for trading activities payable through purchase of a bill or temporary license. Annual rate for legal entities shall not exceed 10 minimum monthly wages pursuant to the Law; for private individuals, the annual rate shall not exceed 5 minimum monthly wages.

4. License fee for trading in wine and alcoholic beverages payable by legal entities and private individuals involved in retail sales of wine and alcohol at the following annual rates: 20 minimum monthly wages for legal entities, 10 minimum monthly wages for private individuals. In the case of temporary sales at parties and other social events, half of the minimum monthly wage shall be charged for each day of trading.

5. Targeted fees for police, territory arrangement, and other purposes charged on private individuals and enterprises, irrespective of ownership. The annual rate shall not exceed one percent of 12 minimum monthly wages for private individuals or one percent of the annual wage fund calculated per minimum monthly wage for legal entities.

6. Advertisement tax payable by legal entities and private individuals advertising their products at a rate not exceeding 5 percent of the advertisement agency service cost.

7. Fees payable by private individuals in possession of a dog (except service dogs) at an annual rate not exceeding 15 percent of the minimum monthly wage pursuant to the Law.

8. License fees for holding local auctions and lotteries payable by auction/lottery organizers at a rate not exceeding 10 percent of the auctioned goods or the value of lottery tickets.

9. Fee payable by private individuals upon issuance of a certificate to lodge in a flat at a rate not exceeding 75 percent of the minimum monthly wage, depending on the total space and quality of dwelling.

10. Tax for sales of second-hand cars, computing equipment and personal computers payable by legal entities and private individuals selling these goods at a rate not exceeding 10 percent of the contract value.

11. Fee for use of local symbols payable by producers of goods bearing local symbols (coat-of-arms, views of cities, localities, historical monuments, etc.) at a rate not exceeding 0.5 percent of the value of goods.

12. Fees for transactions effected at the exchange (except securities transactions provided for in applicable laws) payable by participants therein at a rate not exceeding 0.1 percent of the contract value. 1/

13. Fees for participation in horse races payable by legal entities and private individuals entering their horses for commercial contest, at a rate not exceeding three minimum monthly wages pursuant to the Law.

14. Fee for victory at the horse races payable by winners at a rate not exceeding 5 percent of the value won.

15. Fee for participation at the horse races payable in the form of interest to the participation charge at a rate not exceeding 5 percent of the charge.

16. Fee for parking payable by legal entities and private individuals parking their cars at specially equipped areas at a rate not exceeding one percent of the minimum monthly wage for each day.

17. Fee for TV and cinema shooting payable by commercial cinema and TV companies which undertake shooting requiring special organizational involvement by local government bodies (allocation of police forces, fencing of the territory etc.), at a rate of not exceeding one percent of the monthly wage fund calculated per established minimum monthly wage.

STATISTICAL APPENDIX

Table 5.

Turkmenistan: Production of Gas and Cotton, 1990-95

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Source: Data provided by the Turkmen authorities.
Table 6.

Turkmenistan: Index of Gross Industrial Output, 1990-95

(In prices of the previous year)

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Source: Data provided by the Turkmen authorities.
Table 7.

Turkmenistan: Production of Selected Mineral and Industrial Commodities, 1991—95

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Source: Data provided by the Turkmen authorities.
Table 8.

Turkmenistan: Money Incomes and Expenditures of the Population, 1991—94

(In millions of manat, period average)

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Source: Data provided by the Turkmen authorities.
Table 9.

Turkmenistan: Selected Goods, Products and Services for which Prices are Regulated by the State

(In manat per units indicated)

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Source: Data provided by the Turkmen authorities.
Table 10.

Turkmenistan: Energy Prices, 1992-95

(End-of-period)

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Source: Data provided by the Turkmen authorities.

Raised to manat 50 per litre and manat 40 per liter, respectively, as of January 1,1996.

Table 11.

Turkmenistan: Consumer Price Developments, 1993-95

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Sources: Data provided by the Turkmen authorities.
Table 12.

Turkmenistan: Monthly Percentage Changes in the Consumer Price Index, 1994-95

(Percentage change over the previous month)

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Source: Data provided by the Turkmen authorities.

Due to rounding, components do not add to 100.

Table 13.

Turkmenistan: Average Retail Prices of Selected Items, 1990-94 1/2/

(In manat per kilogram)

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Source: Data provided by the Turkmen authorities.

Average of prices paid in state retail stores, state rural “cooperative” retail outlets, and urban “collective” (free) markets. Data from the family budget survey.

Prices presented are average for the period.

The family budget survey classifies respondents based on occupation. Workers and employees may reside in both urban and rural areas, and include agricultural employees not classified as collective farmers.

Pork prices are not available for collective farmers.

Table 14.

Turkmenistan: Producer Prices in Industry, 1993-95

(Percent change over preceding period)

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Source: Data provided by the Turkmen authorities.
Table 15.

Turkmenistan: Nominal and Real Wages, 1993-95

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Source: Data provided by the Turkmen authorities.

Average economy-wide wages.

Table 16.

Turkmenistan: Minimum Consumption Basket and Minimum Wage, 1993-95 1/

(In manat, period average)

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Source: Data provided by the Turkmen authorities.

A per capita poverty measure reflecting the minimum income needed to sustain existence.

Table 17.

Turkmenistan: Wages by Sector, 1993-95

(In manat per month; period average)

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Source: Data provided by the Turkmen authorities.

Includes bonuses/premia.

Excludes collective farmers and those employed full -time on private plots.

Other branches of material production, includes miscellaneous activities such as hunting, trapping and printing.

Research and Development Institutes.

Local, Republican, and former all-Union government agencies.

Table 18.

Turkmenistan: Population, Labor Force and Employment, 1990—94

(In thousands of persons; end-of-period)

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Source: Data provided by the Turkmen authorities.

Defined as men between the age of 16 and 59 years and women between the age of 16 and 54 years.

Including consumer cooperatives.

Includes students over the age of 16 and people of working age not officially employed, (e.g. housewives)

Unemployment, inactive population, and total labor force data are derived from different sources, and are not directly comparable

Table 19.

Turkmenistan: Employment by Sector, 1990-95

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Source: Data provided by the Turkmen authorities.

Includes those employed in state and private agriculture.

Retail and wholesale trade.

Other branches of material production, includes miscellaneous activities such as hunting, trapping, and printing.

Research and Development Institutes.

Transportation and communication services for consumers and government (as opposed to industrial users).

Local, Republican, and former all-Union government agencies.