This chapter discusses Turkmenistan's efforts to enhance trade facilitation, especially in connection with its World Trade Organisation (WTO) accession process. It outlines the progress made in identifying the TFIs and highlights areas for more extensive data collection. It subsequently provides the preliminary findings and performance comparison with peers. It concludes by providing recommendations centred on Turkmenistan’s need to prioritise reforms and co-operate with international partners, such as the International Trade Centre (ITC) and the WTO.
Trade Facilitation in Central Asia
6. Turkmenistan
Abstract
Preliminary TFI results provide a snapshot of some aspects of Turkmenistan’s trade facilitation performance
Turkmenistan has started to collaborate with the OECD to include its trade facilitation endeavours within the TFI repository. This attempt is timely, as Turkmenistan has an opportunity to address transport and logistics bottlenecks across the Caspian Sea and the north-south trade corridor due to its strategic location for pipelines, railways, roads, sea transport, and logistics infrastructure (EBRD, 2023[1]). This follows it having become a WTO candidate for accession in 2022, which signals the readiness of the authorities to accelerate reforms on trade in goods and services, as well as general business climate issues, to help diversify and grow its economy (UNECE, 2023[2]).
Developing the country’s TFI indicators is an ongoing process; there are not yet any full-fledged scores. As this is the first attempt to bring Turkmenistan into the OECD’s TFI coverage, at this stage it was possible to collect only around two-thirds of the measures across the 11 indicators (Table 6.1). All sub-indicators for the external border agency co-operation have been identified, and as have most for the areas of information availability, trade community involvement, and internal border agency co-operation. In contrast, information on documentation procedures, and governance and impartiality, is particularly scarce, and half or fewer of the indicators have been compiled for the areas of advance rulings, appeal procedures, fees and charges, and procedures.
Table 6.1. Turkmenistan’s TFI information collection as of September 2023
Legend: A - Information availability, B - Involvement of the trade community, C - Advance rulings, D - Appeal procedures, E - Fees and charges, F - Documents, G - Automation, H - Procedures, I - Internal border agency co-operation, J - External border agency co-operation, K - Governance and impartiality.
Source: OECD TFIs database.
Tentative results indicate that Turkmenistan still lags neighbours and income peers (Figure 6.1). Based on the information provided to date, Turkmenistan lags its Central Asian peers on the dimensions covered, except for its internal agency border co-operation. The difficulty in accessing the sub-elements constituting the OECD’s TFIs gives an insight into the state of trade facilitation within the country, as the scarcity of available information likely indicates that small and medium-sized enterprises (SMEs) may find it difficult to locate the relevant information and lack support to internationalise. It should be noted that most of the information in the report was collected before the launch of the new trade information portal (Box 6.1), the portal could help improve performance on this dimension.
Figure 6.1. Accessibility of information about trade facilitation in Turkmenistan
Note: 2 is the maximum score. Central Asia includes information for Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan. Provisional information only for Turkmenistan. Dimensions marked with * include less than half of the OECD TFI sub-indicators, while those marked with ** are not presented at all due to insufficient data.
Legend: A - Information availability, B - Involvement of the trade community, C - Advance rulings, D - Appeal procedures, E - Fees and charges, F - Documents, G - Automation, H - Procedures, I - Internal border agency co-operation, J - External border agency co-operation, K - Governance and impartiality.
Source: OECD TFIs database.
Box 6.1. Turkmenistan’s Portals and Single Window
Turkmenistan’s programmes to facilitate and digitalise trade are presented in strategic papers, including the Programme of Socio-Economic Development of Turkmenistan for 2019-25, the Concept of Development of the Digital Economy for 2019-25, the Programme for Customs System Development for 2017-21, and the Programme for the Development of Foreign Economic Activities for 2020-25.
Turkmenistan is developing its own Single Window platform through co-operation with the United Nations Development Programme (UNDP) following the 2020 signing of a Memorandum of Understanding (MoU) between UNDP, the United Nations Conference on Trade and Development (UNCTAD), and the Ministry of Foreign Affairs of Turkmenistan. Regular meetings are held on the Single Window’s development, including with the Ministry of Justice and the Transport and Communication Agency of the Cabinet of Ministers of Turkmenistan. The Single Window site launch is expected for the end of 2023.
Moreover, Turkmenistan launched the Trade Information Portal in April 2023, as well as a training portal for exporters, both funded by the European Union (EU) and implemented by the International Trade Centre (ITC) within the Ready4Trade Central Asia (R4TCA) project. The Information Portal provides users with an overview of the regulatory documents required by customs agencies as well as guides on how to fill them, the procedures for a dozen of products on export and import and the contact details of customs offices. The Training Portal is still under construction, though it aims to integrate courses developed by the ITC.
To reach its trade facilitation goals Turkmenistan should further concentrate on a number of reforms
If preliminary outcomes indicate Turkmenistan still performs below its potential on trade facilitation, its efforts to join the OECD TFIs reflect a commendable desire to improve its trade environment. Turkmenistan should therefore ensure full co-operation with the OECD and other international partners (e.g., ITC, WTO, UNECE, UNDP, UNCTAD) in identifying the TFI sub-elements for which publicly available data remains scarce. This would be a first step in identifying trade facilitation strengths and gaps and allow the government to start addressing the most urgent and important reforms. As it improves data availability, its performance can be tracked and compared over time to determine good practices and enable comparisons against peers. It will need to strive to ensure the implementation of future reforms, as preliminary results suggest that Turkmenistan is lagging on the operational implementation of trade facilitation reforms.
Moreover, improvements to operation practices should also cover areas such as risk management and cross-border regional co-operation. By facilitating both the conduct of business in the country and the cross-border transit, the enterprises will be able to contribute to the development of a diversified and inclusive economy. As Turkmenistan aims to become a transit and transport hub, the government could consider also spearheading the development of transit procedures in collaboration with neighbouring countries, such as Kazakhstan and Iran. For instance, the government announced its readiness in 2023 to launch an international transit corridor to Iran, Iraq and Türkiye as part of the major East-West international transport corridor, while it is part of the southern line of the Middle Corridor, connecting China, Central Asia, and Europe through its port of Turkmenbashi (Modern Diplomacy, 2023[7]). Turkmenistan is also part of the Lapis Lazuli Corridor between Afghanistan and Türkiye, and the North-South corridor between Russia, Iran, and India (The Jamestown Foundation, 2023[8]). Accordingly, the government should consider creating an electronic transit system to manage and control the movement of goods in transit with neighbouring countries, as four countries in Central America have done (Box 6.2).
Box 6.2. International Transit of Goods (TIM) initiative in Central America
A decade ago, transit of goods in Central America suffered from a lack of co-ordination of border agencies, cumbersome and slow Customs and administrative procedures, and limited use of information technologies. As regards shipments in transit, exporters had to clear customs at each side of countries’ bilateral borders and sequentially submit multiple paper documents to the various border agencies, including printed copies of international transit declarations, country-specific sanitary and phytosanitary (SPS) certificates, and migration arrival and departure cards. For instance, it was necessary to present 12 sets of documents at one border crossing between El Salvador and Honduras.
In response, and with the support of the Inter-American Development Bank, Central American countries adopted the Central American International Transit of Goods (TIM), an electronic transit system to manage and control the movement of goods in transit, partially based on the EU’s New Computerised Transit System. The TIM initiative was developed around three key pillars:
Process re-engineering – TIM harmonised multiple paper-based declarations into a unique and comprehensive electronic document (the single transport document, DUT) that gathered all data required by different border agencies (customs, SPS agencies, migration authorities).
Automation tools – TIM connected the intranet systems of all agencies in all countries participating in the project, thus enabling the management and tracking of the international transit process as well as risk analysis.
Border agency co-operation.
TIM was implemented gradually, with El Salvador being the first country to participate. El Salvador customs made the use of the TIM mandatory for selected routes with Guatemala, Honduras, and Nicaragua, as allowed by the TIM at regional level. In a second phase, the TIM was extended to cover exports to Nicaragua via additional border posts and to Costa Rica.
The changes made to the system transformed the operational framework, which now comprises a Single Window allowing for simultaneous interaction in the same location. In practice, this works due to a barcode on the DUT, which, when scanned, shows the relevant customs officials full and unified information.
The streamlining of customs clearance procedures has reduced the amount of time required to prepare documents and speeded up the checking process. The TIM has also facilitated information flows on each export transaction, thus ensuring better real-time control of shipments.
Source: OECD Trade Facilitation Indicators (TFIs) repository.
References
[1] EBRD (2023), Transition Report 2022-23 - Turkmenistan.
[7] Modern Diplomacy (2023), Outlook for Turkmenistan as Eurasia’s Transport Hub, https://moderndiplomacy.eu/2023/08/13/outlook-for-turkmenistan-as-eurasias-transport-hub/ (accessed on 21 September 2023).
[8] The Jamestown Foundation (2023), Revitalization of the Lapis Lazuli Corridor: From Afghanistan to Europe, https://jamestown.org/program/revitalization-of-the-lapis-lazuli-corridor-from-afghanistan-to-europe/ (accessed on 21 September 2023).
[5] Turkmenistan Altyn Asyr (2023), Trade Information Portal to be launched in Turkmenistan (В Туркменистане будет запущен Портал торговой информации), https://turkmenistan.gov.tm/ru/post/71082/v-turkmenistane-budet-zapushchen-portal-torgovoj-informacii (accessed on 19 September 2023).
[4] Turkmenistan Altyn Asyr (2023), Turkmenistan discussed the successful implementation of the Single Window for Export-Import Transactions system (В Туркменистане обсудили успешное внедрение системы «Единое окно для экспортно-импортных операций»), https://turkmenistan.gov.tm/ru/post/75008/v-turkmenistane-obsudili-uspeshnoe-vnedrenie-sistemy-edinoe-okno-dlya-eksportno-importnyh-operacij (accessed on 19 September 2023).
[6] Turkmenistan Trade Information Portal (2023), Turkmenistan Trade Information Portal, https://infotrade.gov.tm/?l=en (accessed on 19 September 2023).
[3] UNDP (2023), Single window for export-import operations - Turkmenistan, https://www.undp.org/turkmenistan/projects/single-window-export-import-operations (accessed on 19 September 2023).
[2] UNECE (2023), UNECE trains Turkmenistan’s government officials on regulatory and procedural trade measures as part of accession to WTO, https://unece.org/media/news/380043 (accessed on 15 September 2023).