by Joan Morgan

August 1997

Ashgabat, capital of Turkmenistan, is the country's largest city and primary economic, industrial, administrative, and educational center. Ashgabat is also the gateway to business in Turkmenistan, a Central Asian country with huge reserves of natural gas and petroleum.

With a population of 407,000, Ashgabat is located in the southern part of Turkmenistan at the foot of the Kopet Dag mountain range in the Kara Kum desert. Although the capital is located in the Ahal Velayat (region), it has its own municipal government. Near Ashgabat is the Kara Kum Canal, the largest irrigation system in the world.

More than 50 factories are located in Ashgabat, which is one of Turkmenistan's major manufacturing centers. Local enterprises include dairy and meat processing plants, bakeries, a petroleum-industry equipment plant, glass works, spinning mills, and silk factories. It has several machine building and metal working enterprises and a cement plant. Carpets made in Ashgabat are internationally renowned, and a number of textile manufacturers are also located in the vicinity of Ashgabat.

Consumer Product Distribution
Most stores in Ashgabat offer only a limited selection of poor quality goods, and many carry no more than the most basic products. Nevertheless, Western goods are slowly penetrating the local economy and there is opportunity for distributors and retailers of U.S. consumer goods in Ashgabat. No customs duties are charged to import goods into Turkmenistan, but there are licensing requirements for alcohol, pharmaceuticals, meat and dairy products, beverages, and candy bars.

As the main center for international exhibitions in Turkmenistan, Ashgabat has two major upcoming exhibitions. The "International Food and Agricultural Industry" exhibition on November 25-28, 1997 is for companies with expertise in agribusiness, cattle breeding, fertilizer production, and other areas. The "Third Annual Oil and Gas Conference and Exhibition," scheduled for March 11-13, 1998, will be held in the Ashgabat Exhibition Center.

In order to make Ashgabat more accessible to the rest of the world, the Turkmenistan Government has invested in a modern airport in the city. Lufthansa now has two weekly flights to Ashgabat, including connecting service with United Airlines under a code-sharing agreement. Turkmen Airlines has flights from Ashgabat to London, Moscow, New Delhi, and Dubai, while Turkish Airlines connects Ashgabat to Europe via Turkey. The city is linked to neighboring countries by road and rail, although the distances are formidable.

Commercial real estate development, including hotels, business centers, restaurants, and casinos, is a growing part of Ashgabat's economy. Rental of office or manufacturing space is an important source of revenue for the city government. A tender for construction of new Central Bank and Defense Ministry buildings will soon be announced by the mayor's office.

U.S. Companies in Ashgabat
A number of small- and medium-size American companies are based in Ashgabat, including Barash Communications Technologies, Inc., a supplier of cellular communication and paging services; Ibberson International, Inc., which builds food processing plants; and International Business Services, Inc., a consulting firm that advises local and foreign companies. Larger U.S. firms also do business in Ashgabat. Culligan has provided equipment and technology for the city's municipal water treatment plant, ITT Industries is working on a water pumping project outside of Ashgabat, and Boeing has sold several planes to Turkmen Airlines. Case, Caterpillar, and John Deere all sell machinery and agricultural equipment through their Ashgabat-based offices. For more information on Ashgabat and Turkmenistan visit BISNIS Online at: www.iep.doc.gov/bisnis/country/cntasia.htm#turkmenistan.

Joan Morgan covers Turkmenistan for BISNIS.

This report is provided courtesy of the Business Information Service for the Newly Independent States (BISNIS)