TURKMENISTAN: 2008 FISCAL TRANSPARENCY REPORT

UNCLAS ASHGABAT 000308 SIPDIS SIPDIS STATE FOR SCA/CEN, EEB/IFD/OMA (SNOW AND FIGUEROA),AND SCA/RA LEO GALLAGHER E.O. 12958: N/A TAGS: PGOV EAID ECON PREL TX SUBJECT: TURKMENISTAN: 2008 FISCAL TRANSPARENCY REPORT REF: STATE 16737 ¶1. 1) Information on country whose central government receives foreign assistance from the United States: Turkmenistan. The death of former President-for-Life Saparmyrat Niyazov on December 21, 2006, offered a new opportunity to engage the Government of Turkmenistan on a number of issues, including fiscal and economic transparency. Under the former president, a system of non-transparent off-budget funds allowed the president and others to siphon off large amounts of hydrocarbon revenue for pet projects and personal gain. Although corruption and lack of transparency continue to be problems, the new president, Gurbanguly Berdimuhamedov, has announced a few positive changes, including decisions to eliminate the off-budget funds and establish a GAO-like Supreme Auditing Chamber. He also has expressed willingness to work with the international community to begin bringing Turkmenistan's regulations and practices into conformity with international standards. The U.S. Embassy and the international donor community are seeking to respond to these opportunities, but the scope of the changes needing to be made, the relatively short time that has passed since the current president's inauguration, and donor funding constraints have limited what can be done. 2) Relevant laws and regulations governing the public disclosure of revenues and expenditures in national budgets: Turkmenistan's law "On the Budgetary System" (1996) states that Turkmenistan's Parliament approves the annual state budget. The law does not require that the annual budget be published. 3) The adequacy of those laws and regulations, and the extent to which they are implemented and enforced: N/A 4) Those countries receiving such assistance where no such laws or regulations exist, and the extent to which such revenues and expenditures are publicly disclosed: Each year, the Government of Turkmenistan announces on government-controlled television, in the official government Russian-language newspaper, "Neytralniy Turkmenistan," and in Turkmen-language newspapers the passage of the annual state budget. The announcement only gives the amount of tax collected from each region and the federal city of Ashgabat, as well as the amount of money to be apportioned to each region and to Ashgabat from the state budget. 5) Programs and activities sponsored by the United States Government to promote accurate disclosure of revenues and expenditures in the national budgets of such countries, and the results of those programs and activities: The recently awarded USAID/BearingPoint project, Economic Reforms to Enhance Competitiveness (EREC, plans to do this type of work, and a team is coming to Turkmenistan in March 2008 to define potential partners and initial activities. However, during at least the first year, this project will be limited by available funds and Ministry of Finance counterpart interest. -- Is the host country's budget made public? As already mentioned, the passage of the state budget is announced, as well as the amount of revenue apportioned to each region and Ashgabat and the amount of tax collected from each region and Ashgabat. -- If so, through what medium (e.g., publication, internet)? Newspaper, television -- Are all revenues and expenditures included in the publicly-available budget? No -- If the revenues and expenditures are available in a publicly-available budget, how meaningful and accurate is the information? N/A -- If a country is weak on fiscal transparency, is it due to capacity or lack of will? Although lack of will has been a problem in the past, there are some indications that capacity problems increasingly are playing into the equation, as well. -- Are there any USG programs to strengthen the host country's capacity to develop sound fiscal policies and that support transparency and good governance? No, although the USAID/BearingPoint project, which is just getting off the ground, will offer some limited training in this area. The U.S. government may also provide an advisor from the Department of Treasury, if funding permits. -- Are other donor countries or multilateral institutions (e.g. the EU or World Bank) providing assistance in these areas? The World Bank is in the process of putting together a strategy paper for re-engagement in Turkmenistan, but, in reality, no significant action can be expected for several years, at best. -- Has the country volunteered for the IMF to report on the country's compliance with standards and codes covering fiscal transparency? Turkmenistan has not volunteered to let the IMF report on compliance with standards and codes covering fiscal transparency. HOAGLAND