Diversification and Industrialization in the Economic Development of Turkmenistan

Abstract In the early stages of its transition, Turkmenistan pursued a gradualist path. Diversification, industrialization, and market-based reforms led to very rapid economic growth particularly since the late 2000s. This article investigates the role of Turkmenistan's economic development policy in diversifying industries and promoting the manufacturing sector. The government has diversified the destinations for the natural gas exports. Although its agriculture had been characterized as cotton monoculture, the share of wheat has risen since the 1990s. The textile industry has led the manufacturing sector, and other industries are not well developed. The government has successfully attracted foreign direct investment. Turkmenistan's trade policy has contributed to supplying machines for manufactured products, although it might have been harmful to the early-stage development of the manufacturing sector. Turkmenistan, which is not a member of the WTO, may actively utilize its policy space to promote technology-intensive industries and must strengthen its level of human capital.