Serdar Berdimuhamedov and Turkmenistan’s Digital Transformation

On February 12, 2021, Serdar Berdimuhamedov was given a number of top positions by his father, Turkmenistan’s President Gurbanguly Berdimuhamedov. The appointments ushered in the penultimate stage of a hereditary power transition that has been underway for several years now. Serdar was appointed the head of the Supreme Control Chamber, a member of the State Security Council, and more importantly the post of deputy chairman of the Cabinet of Ministers (Gurbanguly Berdimuhamedov is the chairman), responsible for the implementation of the country’s digitalization policy and integration of innovative technologies in the economy, public governance and social spheres.

In the following months, Serdar enjoyed a further expansion of his political influence, becoming a chair of the Turkmen-Japanese as well as (and more importantly) the Turkmen-Russian and Turkmen-Chinese intergovernmental cooperation commissions, and the head of the Ashgabat-based International Association of Akhal-Teke Horse Breeding. Regarding the latter, President Berdimuhamedov’s obsession with Akhal-Teke horses is not a mere hobby but a state matter. It has been an important feature of Turkmenistan’s nation-building project, and also signifies his native tribe’s dominant position in the country’s sociopolitical system. Serdar’s appointments altogether make him the second-most powerful political figure in the country, in charge of strategically important domestic political projects and foreign policy initiatives, especially in light of the power transition scheme and the country’s ambitious digitalization endeavor.

Digitalization has been high on President Berdimuhamedov’s agenda since late 2018, when he adopted the Concept of the Development of Digital Economy in Turkmenistan for 2019-2025. In February 2021, the document was supplemented by the new State Program on the Development of the Digital Economy of Turkmenistan for 2021-2025. Berdimuhamedov senior presents digitalization as a matter of safeguarding national sovereignty. He has articulated its objectives as the modernization of state governance through rationalization of bureaucratic costs and improvement of the efficiency of state institutions and state-affiliated enterprises, as well as diversification of the country’s economic portfolio, currently overly dependent on hydrocarbons as the source of revenue. Given the protracted socioeconomic crisis that Turkmenistan has been experiencing for at least the past five years, which has significantly deteriorated living conditions for the population at large, it certainly appears as a timely and reasonable policy measure. When properly administered, digitalization does yield significant economic and social benefits for the public; however, in Turkmenistan’s case, digitalization is as opaque a business as any other matter of the state.

This is not to say that the country has not attained some progress in this policy area; the number of state bodies having their own websites is growing, and so is the number of financial institutions that provide online banking services. According to MasterCard, in 2020 the volume of non-cash transactions in Turkmenistan was 2.65 times higher than in the same period of 2019; the number of internet banking subscribers rose to 634,000 people, while the number of customers using mobile banking reached 28,400 in 2021. The country’s internet penetration rate is also on the rise, according to DataReportal. Between 2020 and 2021, the number of internet users in Turkmenistan increased by 459,000, bringing the country’s internet penetration rate to 33.2 percent.

Nevertheless, the current progress has been mainly perfunctory, reflecting the government’s prioritization of meeting easily-achievable quantifiable targets as indicators of progress, such as those above, with lesser consideration given to the issues of quality and functionality. State bureaucrats rush to launch websites and platforms to avoid a presidential reprimand, which results in many of these platforms having outdated information and limited functional capacity. They are of little use to the public and business community. To make matters worse, the government neglects the introduction of much-needed, far-reaching reforms aimed at eradicating the underlying problems, including the societal digital divide, the knowledge and skills gap, and the lack of a competitive business environment. For instance, although the government recently slashed the price for internet access from 150 manat ($42.6 at the official rate, roughly $5 at the black market rate) to 100 manat for 256 kbps connections, and from 350 manat to 200 manat for 2 mbps connections, these prices still remain unaffordable to the majority of the population, given the enormous loss in purchasing power due to the economic crisis.

The absence of meaningful progress is the result of not only low management capacity at the state institutions tasked with implementing the digitalization drive, but also of the different view of digitalization and its utility at the very top, which places the potential positive benefits for the general public at the bottom of policy priorities. For Berdimuhamedov senior, digitalization, apart from strengthening state institutions, is largely a political vanity project aimed at boosting his and Serdar’s image as modernizing and forward-looking technocrats, for both domestic and international audiences, in step with current global trends. In 2019, for instance, Akhal region, then under Serdar’s leadership, reportedly became the country’s first region to fully integrate e-document workflows in its public governance system. In October 2020, Serdar, then the minister of industry, presented his father with a number of electronic and household appliances, such as smart TVs and smartphones, which he claimed had been produced in Turkmenistan. In the capacity of deputy chairman, Serdar has put efforts into strengthening cooperation in high-tech fields with Russia and China, inviting them to participate in the country’s ambitious “smart city” project.

The other aspect of digital transformation that looks equally appealing to Berdimuhamedov is its potential of generating wealth for his extended family network. Digitalization requires the allocation of significant investments in developing the requisite ICT infrastructure and procurement of hardware and services. In Turkmenistan, such projects almost always have inflated costs for the purpose of siphoning off state funds and are carried out by companies connected to the president’s close relatives and confidants, as is the case with the companies building the Ashgabat-Turkmenabat highway at a cost of $2.3 billion.

Last, but not least, the digitalization drive seeks to enhance state surveillance capabilities and thus government control of the population. Ashgabat is particularly committed to improving these capabilities and strengthening cooperation with Russia and China in that pursuit. Though always a priority for Turkmen leadership, this area has gained utmost importance in light of rising Turkmen activism online in recent years. An increasing number of activists, both at home and abroad, have been posting content critical of the government, exposing mismanagement, the negligence of worsening socioeconomic conditions, and inadequate responses to emergency situations. The spread of the coronavirus pandemic in the country in 2020 and the fumbled response to a hurricane-like storm that hit the eastern province, inflicting severe damage, are two key examples. These developments fueled a wave of anti-government protests staged by Turkmen studying and living abroad, and even some smaller-scale protests inside the country.

To keep political discontent from gaining ground and jeopardizing the power status quo, the government has responded by establishing a network of “digital security departments” in almost every state and state-affiliated body; intensifying attacks on VPN applications and their users; intimidating activists and their families through a bundle of online and offline measures; improving the state’s capacity to keep the population in an “information vacuum”; and disrupting internet services, especially during emergency situations, to prevent seepage of information about the government’s mismanagement.

Realizing its limitations in technology and skills, Ashgabat has intensified cooperation with Russia to satisfy its growing requirements. The two countries signed an agreement on cooperation in information security back in 2019, sharing a vision of “sovereign internet,” which grants the state excessive oversight powers under the pretext of securing public order. Serdar, in the capacity of chair of the Turkmen-Russian commission, has arguably taken this partnership a step further. In his meetings with Russian officials, namely with Russia’s Prime Minister Mikhail Mishustin and the Deputy Chairman of Russia’s Security Council Dmitriy Medvedev, among others, cooperation in security and high tech fields received great attention. These fields were reflected as priorities in a new program on Russian-Turkmen intergovernmental economic cooperation for 2021-2023 that Serdar presented to his father in May, and which he approved and ordered Serdar to supervise.

Although cooperation with China in this area is currently less pronounced, it is likely to intensify in the years to come. Turkmenistan undoubtedly keeps a close eye on how such cooperation benefits the ruling regimes in neighboring countries. Chinese companies, namely Huawei, engaged in such projects have also been recurring guests in Ashgabat’s innovative technologies-focused exhibition Turkmentel.

At the time of writing of this article, Serdar Berdimuhamedov was relieved of his duties heading the Supreme Control Chamber and being a member of the State Security Council. He was, instead, appointed deputy chairman overseeing economy, banking, and liaising with international financial institutions. He additionally became Turkmenistan’s representative to the Economic Council of the Commonwealth of Independent States, and was put in charge of overseeing the Balkan region. These appointments do not necessarily mean that Serdar’s engagement with the country’s digitalization endeavor has come to a halt. With succession looming on the horizon and him retaining core positions for cooperation with Russia and China, with which partnership in high-tech issues will most likely continue to intensify, his engagement with this policy area may be taking a different turn but not ceasing. The extent to which he is genuinely interested in and committed to this policy area, if at all, is another question with no clear answer as of now.

Despite this, it is most likely that Serdar, just like his father, will continue to make it to the headlines of local newspapers with digitalization-related success stories. After all, if to take the state propaganda’s messaging at face value, digitalization projects suit him so well, the same way Alabay sheepdogs, Akhal-Teke horses, and most importantly, his father’s “throne” do.

This article is loosely based on the author’s article on Turkmenistan’s digitalization strategy written for the “Digital Silk Road in Central Asia: Present and Future” report prepared by Davis Center (Harvard University) and the Sustainable Kazakhstan Research Institute (Narxoz University).