Mercurial dictator Saparmurat Niyazov has a multi-billion-dollar slush fund, which he uses to maintain his personality cult in natural gas-rich Turkmenistan, according to a report issued April 24 by the watchdog group Global Witness. European Union nations, in particular Germany, are helping conceal the way Niyazov is using TurkmenistanÂ’s energy revenues, the report asserts.The Global Witness paper -- titled Funny Business in the Turkmen-Ukraine Gas Trade -- estimates that Turkmenistan earns more than $2 billion per year from natural gas exports, a large share of which goes to Western Europe via Russia and Ukraine. The report states that a significant portion of revenue never finds its way into state coffers. Instead, Niyazov parks much of the money in foreign bank accounts under his direct control. "A horrifying 75 percent of the stateÂ’s spending ... appears to take place off [the governmentÂ’s] budget," the report says. It goes on to cite "several credible estimates" in valuing NiyazovÂ’s slush fund at over $3 billion, "some $2 billion of which appears to reside in the Foreign Exchange Reserve Fund at Deutsche Bank in Germany."
The report states there is no effective way to track the Turkmen governmentÂ’s management practices. "Citizens have no information as to where that money [gas income] is going because revenues are managed in a completely opaque way," the report said. "It is clear that the money is not being spent on them: standards of health, education and living quality have plummeted since independence."
Niyazov appears to lavish a large share of the revenue on "an increasingly bizarre personality cult," the report suggests, adding that "his [NiyazovÂ’s] picture is everywhere in Turkmenistan: on public buildings, on packets of salt and tea, bottles of vodka and even floats eerily in the corner of television broadcasts."
The report characterized Turkmenistan as dysfunctional, and in imminent danger of becoming "a fully fledged failed state with massive unemployment, widespread heroin addiction and woeful educational and health care systems." The report goes on to criticize the Ruhnama -- the book of values supposedly authored by Niyazov – for claiming that country’s natural resources are "the people’s natural wealth." Such assertions sound "ever more hollow as time passes," the report states. "It is time for Europe, Ukraine and Russia to act."