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EBRD Board approves new strategy for Turkmenistan
The Board of Directors of the European Bank for Reconstruction and Development has adopted a new strategy for Turkmenistan in which it reiterates the serious concern of the Bank over the political situation and slow pace of its transition to a market economy. The two-year strategy, consistent with the last strategy, adopted in 2000, proposes three alternative scenarios as a response to Turkmenistan's development towards a market-based economy.
The new strategy and the text of a letter from EBRD President Jean Lemierre to the President of Turkmenistan are published on the EBRD Web site www.ebrd.com.
In the base case, with no noticeable progress on economic and political reforms, the EBRD will focus future investments on private-sector entities and undertake no new investments in the public sector. In the intermediate and regular scenarios, the EBRD would increase its involvement in Turkmenistan once the government had demonstrated its commitment to reform and transition.
With little current movement towards critical democratic and market reforms, the Bank's approach in Turkmenistan, as reflected in the base case scenario, will restrict itself to support for the private sector and dialogue with the government and with civil society on ways to improve the investment climate for private entrepreneurs.
The EBRD requires that its countries of operations apply the principles of multi-party democracy, pluralism and market economics. When Turkmenistan joined the Bank in 1992, it accepted this requirement, as laid down in Article 1 of the 1990 Agreement Establishing the Bank.
The EBRD has signed five projects to date in Turkmenistan with a total commitment of €199.2 million, including an SME Credit Line and loans to Gap Turkmen, Dragon Oil and TMS Wool Scouring in the private sector, and a public-sector loan for rehabilitation of the Caspian Sea port facilities.
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