The Sand Trap: Turkmenistan’s Next Boondoggle

When looking at Turkmenistan via satellite, the country looks tan. It is, after all, mostly sand. The vast Karakum desert -- the 12th largest desert in the world -- occupies more than 70 percent of Turkmenistan’s territory. It is what’s known as a cold winter desert. Like the Gobi, the Karakum has long, dry, and hot summers and cold winters with little rain or snow.

The country’s capital, Ashgabat, is perched on the southern edge of the desert, just over 30 miles north of the Iranian border, marked by the Turkmen-Khorasan mountain range, also called the Kopet Dag.

In the southeast, spidery networks of irrigation canals fan out from the oases of Mary and Tejen; in the northwest is the Caspian Sea. Where sandy desert meets the waves, Turkmenistan has constructed a seaside resort: Avaza.

In 2011, shortly after eight high-rise resort hotels were finished in Avaza, journalist Richard Orange called it “the most ill-conceived resort ever built.” Another fellow visitor, Paul Morgan, said, “It's ornate to the point of kitsch,” reportedly pointing to the gold leaf and marble.

Turkmen President Gurbanguly Berdimuhamedov has an affinity for gold and marble. In 2015, Ashgabat unveiled a bronze statue, covered in gold leaf, of Berdimuhamedov on horseback. The statue stands more than 65 feet high atop a white marble pedestal carved to resemble a cliff. The statue to honor the Arkadag – “protector” – as Berdimuhamedov is known, was supposedly commissioned after the Turkmen people begged for it.

When the statue was proposed in 2014, Berdimuhamedov reportedly said, “My main goal is to serve the people and the motherland. And so, I will listen to the opinion of the people and do as they choose.”

I wonder if the Turkmen people have been clamoring for golf courses.

In October, Berdimuhamedov announced that he wanted a golf course built in advance of the 2017 Asian Indoor and Martial Arts Games. The somewhat obscure Olympics-affiliated event has been the motivation behind massive construction projects in Ashgabat and renewed projects in Avaza. With events like 3-on-3 basketball, indoor football (soccer), a range of martial arts and wrestling games like taekwondo and kuresh, and more than 60 countries allegedly planning to participate, it’s simple to say the Games will be the biggest event ever hosted on Turkmen soil.

Golf is not one of the sports included, but Berdimuhamedov issued the order and the Ashgabat Golf Club is supposedly to be finished in April 2017.

Jack Nicklaus, a retired American golfer known as the Golden Bear, was hired to design and build the Turkmen golf courses. In comments to the AP, Nicklaus said, “I don’t really know why the president wanted golf.”

He went on to say, “[Berdimuhamedov] has about 2,500 ex-pats who live in Ashgabat who wanted golf, and he knows that golf is an Olympic sport and he’s got the Asian Games next year. He wanted the golf course done before that.”

The AP report did not say how much the golf courses would cost. A safe assumption is many millions.

Referring to the time, a few years ago, when Berdimuhamedov ordered the building of ice rinks in the desert country, which has yet to even participate in a Winter Olympic Games, Nicklaus praised the autocrat: “Every time he brought something in, it’s not just the capital. He said, ‘I want all my provinces to benefit.’ He brought horses in, he brought hockey in. And he’s doing the same thing with golf... He takes it to all his people.” (For the record, Berdimuhamedov did not bring horses to Turkmenistan; they’ve been there since time immemorial).

Avaza, which now reportedly has 33 five-star hotels, will get a golf course as well.

But Turkmen don’t golf and foreigners don’t visit Turkmenistan. Nicklaus told AP that last year Ashgabat issued fewer than 1,000 tourist visas. That number should skyrocket in 2017 due to the Asian Games.

Berdimuhamedov is proverbially tap dancing as the Titanic sinks; or more accurately, golfing while the Turkmen economy tanks.

According to Ronald Watson (a pseudonym), writing for Exeter’s Central Asian Studies Network recently, Ashgabat is quite literally running out of cash.

By November 2016, the black market exchange rate for the country’s currency, the manat, was more than double the official rate. Watson linked the rise to the fact that in January 2016, the state foreign exchange bureaus stopped converting currency. By banning foreign exchange services, Ashgabat has put pressure on businesses that import goods – food, clothing, medicine – pressure that results in price hikes and shortages.

Turkmenistan’s gas reserves – estimated as the fourth largest in the world – should be a major source of revenue. Ashgabat denies the crash in oil and gas markets in 2014 impacted the state’s finances. However, a mission dispatched by the International Monetary Fund to Turkmenistan issued a statement after that said, “Turkmenistan continues to be impacted by an adverse external environment, similarly as the other Central Asian countries.” The statement went on to say that “it would be helpful” if Ashgabat explained its policies to citizens. Furthermore, “The expectations for persistently lower oil and natural gas prices imply the need for additional policy adjustment.”

China steadily overtook Russia as Turkmenistan’s main gas partner through the first decade of this century. In 2015, 60 percent of Turkmenistan’s gas exports were to China and 40 percent to Russia and Iran. That year, however, Russia halved what it imported from Turkmenistan and in early 2016 terminated Turkmen imports altogether.

China meanwhile isn’t exactly paying for the gas it imports. In 2009, China agreed to invest $8 billion over three years for the development of the South Yolotan-Osman gas field. Watson says, “The two countries agreed that Turkmenistan will repay its debt with gas.” The details of the exact arrangements between Beijing and Ashgabat have not been revealed, but most regional observers believe Turkmenistan is paying back China with gas, in addition to using the $8 billion loan investment to purchase Chinese technology and pay Chinese exports to install pipelines to China. Until the debt is paid down, Ashgabat isn’t getting any hard currency revenue from China.

But whatever funds Ashgabat has, it’s apparently enough to build golf courses.