ISTANBUL: The new international airport opened recently in Turkmenistan’s capital Ashgabat is an impressive work of architecture. It is of enormous size, having five floors in the main terminal with a total enclosed area of 162,000 square meters, and a unique design resembling a giant falcon spreading its wings. From an international logistics point of view, Ashgabat International Airport can be seen as a possible candidate for a new transit hub in Central Asia. From an international relations point of view, on the other hand, the airport marks a new milestone in Turkmenistan’s relations with Turkey, as the $2.3 billion project was undertaken and completed by a Turkish construction firm, and opened at a time when there is an increasing diplomatic and economic engagement between Turkey and the littoral states of the Caspian Sea.
Turkish construction companies are not newcomers to the Turkmen market. In addition to the new airport, they have completed several large-scaled projects for the Turkmen government, including the $5 billion Olympic village prepared for the 2017 Asian Indoor Games, the $1.3 billion sea port in Turkmenbashi at the shore of the Caspian, energy plants, textile factories, residential buildings, schools and hospitals, and agricultural facilities.
According to a recent report published by the Turkish Contractors’ Union (TMB), Turkish companies have so far completed 8,755 overseas projects with a total value of $325.4 billion, and while Russia is the largest market hosting 19.9% of all the Turks’ overseas projects, Turkmenistan comes second with 14.8%, which corresponds to 983 projects worth $48.1 billion. Libya and Iraq follow.
Given Turkey’s ongoing political troubles with Russia and the severely unstable conditions in the Middle East, Turkmenistan is expected to climb this ladder, and there are, in fact, early indicators to that end. The same TMB report shows that when only those projects completed after 2010 are taken into consideration, Turkmenistan leaves Russia behind as the leading market for Turkish contractors. It is the fastest growing market for the Turks now. Two other Caspian states, Kazakhstan and Azerbaijan, are also in the list.
Construction work abroad is a major cash earner (and also export booster and employment creator) for the Turkish economy. However, the two last years have seen business volumes declining at an annual basis; 12% down in 2014 and a further 19.6% down in 2015. Turkey needs to reverse this picture, which can only be possible by, first, preserving the existing business volumes in established markets like Russia and the Middle East, and second, by expanding in markets that offer relatively safer business environments, such as Turkmenistan, Kazakhstan, and Azerbaijan.
Turkey is stepping up its construction business in the Caspian region, and this trend runs parallel to the development of a diplomatic initiative, the tripartite dialogue mechanism between Turkey, Turkmenistan and Azerbaijan, launched in 2014. The main instrument of this initiative is the foreign ministers’ summit, and while political issues are also included in summit agendas, the tripartite dialogue is primarily focused on improving connectivity in the Caspian region through new land transportation routes and energy pipelines.
In the energy realm, the long proposed Trans-Caspian Gas Pipeline project, which is supposed to take Turkmen gas to the European markets through the Caspian Sea, Azerbaijan and Turkey, is back on the agenda. All the three countries see benefits in this project. With Russia having stopped buying Turkmen gas in December last year, Turkmenistan is now vulnerably dependent on the Chinese market, and needs to diversify its customer base.
Azerbaijan already supplies Turkey with its own gas from the Shahdeniz fields through the South Caucasus Pipeline connecting Baku with Erzurum in Turkey through Georgia. However, Azerbaijan’s objective for the long term is to reach the European markets via the proposed Trans-Anatolian Pipeline which will cross the Turkish territory, by also filling the pipes with Turkmen gas. Turkey, on the other hand, aims to position itself as an energy transit hub between the producers to its east and the consumers to its west. In this respect, carrying Caspian gas to Europe, in addition to Russian connections through the Black Sea, makes perfect sense for Ankara.
